BOB DOLL: Here Are The 3 Signs Of A Stock Market Bubble

Earlier today, Nuveen’s Bob Doll explained how he came to his 10 predictions for the markets in 2014.

Regarding stocks, he thinks it should be another up-year for the market.

“On the back of very strong equity market performance in 2013, it is hard to conclude that equities haven’t “stolen” some 2014 returns,” he said. “Accordingly, while we think equities will experience further upside in 2014, we expect gains to be less ebullient and more volatile. With the significant rise in valuation (P/E ratios) in 2013, we expect that market gains will depend more on earnings growth than further multiple expansion.”

We asked Doll what he thought about those who have been warning of a stock market bubble that’s doomed to crash.

He said he doesn’t see a bubble. He continued by identifying and addressing what he considered to be the three signs of a bubble:

This may not be satisfying to those who follow the many other indicators that reflect frothy markets.

It’s worth noting that Doll fully expects a market correction of around 10%, something he says would be quite normal.

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