Bubblemeter – way of predicting bubbles

According to this guy, bubbles are predictable ex ante. His speech smelt a bit :), but hey, maybe he has found the way. The good thing is, that his research is free and can be found here. His tool for measuring bubbles is free as well, here. So I have checked. First I went into a recent history and according to this indicator, Nikkei 225 should have been puking from March 2013 till the begining of June. The puke finally came on the 22May. Here is the chart:

So if you look at this indicator now, the highest chance of PUKE is signaling the MDAX (Frankfurt Index). Definitely something to keep an eye on. Here is the comparison to S&P, DAX and FTSE:

As you can see, the exponentional move has to stop at some point. The only question is when. Of course there is no holy grail and even this indicator has flaws but if it helps you filter only the opportunities which are worth your time, why not to use it.

Take a look.

lechiffre