“We take a restrictive definition of bubble. The asset has:
(1) to be valued beyond the reasonable bounds of fundamentals and
(2) could correct rapidly.
This leaves us with only five candidates.
(1) Risk free rates: Treasuries, bunds, gilts and JGBs
(2) Credit, particularly in Europe
(3) Real estate in Asia
(4) EM stock markets: Specifically: Indonesia, the Philippines and Thailand.
We would also add Mexico on the grounds that it is expensive, illiquid and
of 28 stocks that UBS covers in the region only 5 have Buy ratings.
(5) Australian banks”