I know the temptation to identify a bubble early is hard to resist. Pundits use it to buff their prognosticating cred.
The problem is in the nature of financial bubbles. Between July 17, 1995 and March 12, 2000 the Nasdaq ran from 1005 to 5048, 4043 points. 2910 of those points were booked in the last fifteen months of the run, the Nas closed above 2100 for the first time ever on December 12, '98.
Leaving the party just five quarters early would have left 72% of the potential gains on the table.
That's the math of parabolic moves.
From The Atlantic:
These are boom times for wind power. T. Boone Pickens, the wildcatter turned oil baron, is building the world’s biggest wind farm, in the dry scrub of the Texas Panhandle—a $10 billion bet on wind’s future. Twenty-eight states have set ambitious mandates for renewable energy, with wind power shouldering most of the load; many compel electric utilities to get at least 20 percent of their supply from wind and other renewable sources between 2015 and 2025.
Those requirements, along with a generous federal subsidy (20 percent of wind energy’s costs), have fostered a turbine-building frenzy. Overall capacity grew by 45 percent last year alone. Several wind-power companies have been snapped up in recent years in a string of multibillion-dollar deals. In May, Jim Cramer talked up wind stocks on Mad Money while assembling a model turbine in the studio.
And why not? Wind power seems to promise zero emissions and an endless supply of cheap power.
Still, it’s hard to ignore the parallels to the recent ethanol boom, which was also fueled by mandates and subsidies, and which is now viewed almost universally as a disaster. Wind power is unlikely to cause a global food crisis. But heedless investment in it may provoke blowback of a different sort.
Though wind advocates say that we can reliably and economically use wind for 20 percent of our power needs, the experience of Texas, which leads the nation in wind power—2.9 percent of its electricity comes from wind—highlights two big problems: transmission and variability...MORE