Tesla, bitcoin, growth stocks? When will the next stock market bubble burst

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When a stock or sector of the market is trading well above its intrinsic value, investors may call it a “bubble”.

“We urge caution, the utmost caution. Be very afraid of the valuations of these growing companies,” Peter Chiappinelli, portfolio strategist at GMO Asset Allocation, told CNBC.

Market bubbles are investment phenomena that can occur when valuations are driven by exuberant behavior and they can burn investors.

The past 12 months have seen several bubbles burst. Take even stocks like GameStop and AMC, as well as dogecoin.

And there may still be imminent bubbles to burst.

“One by one, we’ve ticked off all the conditions the glorious bubble needs. And in terms of crazy behavior, it’s been crazier, by a substantial margin, than 1929 and 2000,” Jeremy Grantham, co-founder and leader GMO’s investment strategist, told CNBC’s “Closing Bell”.

Some investors believe that Tesla and Bitcoin are also bubbles that will burst soon.

“You’re here [added] almost [$]200 billion market cap in a week… when you see that kind of euphoria, especially names, it could be potential examples of bubbles that are about to burst, ”said Jason Snipe, Founder and Chief Investment Officer of Odyssey Capital Advisors. CNBC.

There are still areas in the market worth investing in that aren’t trading above intrinsic value, according to investors who spoke to CNBC.

“How do you make money in a growth bubble?… Clearly not all stocks are in a bubble. There are pockets that are very unloved, under-researched and under-held,” Chiappinelli said.

Watch the video above to learn more about the next bubble that may burst and where investors can find safety.

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