—SPECULATION AND MANIAS
In December of 1996, with the Dow Jones Industrial Average at about 6,000, Fed Chairman Alan Greenspan used the term "irrational exuberance" to describe the American public's apparent infatuation with the stock market. In spite of this clear warning from the most powerful financial official in the world, many Americans continued to pour their savings into the most overvalued stock market of this century. By late 1998, the market had advanced another 50 percent, surpassing 9,000 on the Dow. No less that Warren Buffet and George Soros, arguably the two most successful and admired investors of this era, also have publicly aired their concerns about the market today. Still investors keep buying and the market keeps getting more expensive. Americans are indeed infatuated with the stock market.