No. of Recommendations: 20
There is obviously considerable debate currently around the question - are we in a speculative bubble? Relevant to all of us and certainly relevant to Berkshire and its cash pile and chronic lack of opportunities.
The consensus appears to be:
1. We don’t really know.
2. There are some pockets of potential speculation and fragility.
3. Interest rates are coming down and the music keeps playing for now.
I was wondering about the scale of the various areas of the financial system we hear so much about. How significant would the shockwaves be, if some of these things fell over. Here are some stats from you know where…
For scale perspective the global public equity market shows massive geographic concentration, with the United States leading overwhelmingly at a market capitalization of $58.9 trillion, representing 48.6% of the global total. This dwarfs all other tracked regions. China is the next largest market area with a capitalization of $15.6 trillion (12.6%), followed by Japan at $6.3 trillion (5.0%). The United Kingdom and Germany hold smaller but significant roles, with market capitalizations of $3.3 trillion (2.6%) and $2.1 trillion, respectively.
Private Credit Market -
The regulation lite Private Credit market has undergone exponential expansion, reaching a global valuation between $2.3 trillion and $2.5 trillion in 2025. This asset class has grown roughly 8 times in 15 years, starting from a base of approximately $300 billion in 2010.
ETF Market -
The ETF market has also experienced sustained, rapid growth over the last decade, reaching $17.85 trillion in 2025. This growth trajectory accelerated dramatically, moving from $2 trillion in 2013 to $5 trillion by 2018, and then surpassing $11 trillion in 2023 before achieving its latest peak.
Options Market -
The Options market demonstrates a remarkable increase in trading volume. The number of contracts traded has expanded more than 5 times in 15 years, rising from approximately 2.5 billion contracts in 2010 to between 13 billion and 14 billion contracts in 2025.
Cryptocurrency Market -
The total market capitalization for all cryptocurrencies stands at approximately $4.03 trillion. Within this ecosystem, Bitcoin's market capitalization is estimated to be between $2.2 trillion and $2.3 trillion USD. Furthermore, the total value of crypto held by tracked public "treasury companies" is around US$140 billion, spread across approximately 14 companies.
Individual Stocks -
Focusing on individual technology giants, Nvidia currently holds a massive market capitalization of $4.2 trillion (PE 52x), slightly exceeding the entire crypto market. Tesla also maintains a significant valuation at $1.5 trillion (PE 163).
Mag 7 -
The current market capitalisation of the Mag 7 is $21 Trillion.
Company
TTM P/E Ratio
Nvidia (NVDA)
52.47
Microsoft (MSFT)
38.91
Alphabet (GOOGL)
19.70
Amazon (AMZN)
36.30
Apple (AAPL)
32.95
Meta (META)
28.58
Tesla (TSLA)
162.71
I don’t know if this list of ‘asset classes to worry about’ is correct or complete, or how much risk they pose to investors. But It will be interesting to see how it all plays out. There certainly seems to be plenty of games to play in this casino. I just have an awful feeling about it all. Maybe that just comes with getting older.
