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Some bubbles leave behind only a hangover as was the case with tulips and dot-coms but the railroad bubble and the Internet bubble left behind real assets like railroads and the Internet optical backbone to be enjoyed for years afterwards. I see the housing bubble as one that is not too worrisome because, again, the houses are for real, but unfortunately the housing bubble was accompanied by a credit bubble that leaves behind only the hangover like tulips and dot-coms.

Good points, Denny.

I had also thought this would be different since, unlike the Internet bubble, companies were profitable. Of course now it seems that some of those profits were not as solid as they seemed, and in many cases have vanished into thin air. Not only profits, but book value. Another strike against EPS (or P/E) as a guiding light for investing.
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