He kind of did. He expects the market to become a bubble. Bubbles always crash.
What is a bubble? Here's my definition: A bubble is an asset going up because it's been going up. It works like this: Something (the stock market, say) looks good because of fundamentals: because earnings are up, or because interest rates are down, or whatever. People take note: Hey, the stock market looks good. So people buy stocks, so stocks go up. Then more people take note: Hey, the stock market's going up. So more people buy stocks, because they want to own stuff that's going up. So stocks go up more. So more people buy stocks. That's the start of a bubble.
But it doesn't get truly dangerous until people are buying stocks with borrowed money. Then a drop means that people sell in a panic, because they can't take a loss, so the price drops more, so more people sell in a panic, and so on. And the people that lose money, lost (at least in part) borrowed money, which means that it can ruin not just the borrower, but also the lender.
Now: Are stocks currently in this territory? My impression is no, not yet, but I don't know for sure. Is there a good measure of how much borrowed money is invested in the stock market?
What is a bubble? Here's my definition: A bubble is an asset going up because it's been going up. It works like this: Something (the stock market, say) looks good because of fundamentals: because earnings are up, or because interest rates are down, or whatever. People take note: Hey, the stock market looks good. So people buy stocks, so stocks go up. Then more people take note: Hey, the stock market's going up. So more people buy stocks, because they want to own stuff that's going up. So stocks go up more. So more people buy stocks. That's the start of a bubble.
But it doesn't get truly dangerous until people are buying stocks with borrowed money. Then a drop means that people sell in a panic, because they can't take a loss, so the price drops more, so more people sell in a panic, and so on. And the people that lose money, lost (at least in part) borrowed money, which means that it can ruin not just the borrower, but also the lender.
Now: Are stocks currently in this territory? My impression is no, not yet, but I don't know for sure. Is there a good measure of how much borrowed money is invested in the stock market?