There's a dreadful sense of deja vu about the global stock market frenzy amid the economic gloom, and a genuine fear that a massive crash similar to 1929 is looming.
The unabated rise of new-economy stocks looks eerily similar to the dot-com bubble of 2000 while the recent rapid rise of A shares mirrors what happened back in 2015.
This is, of course, the best time to make money. Consider Tesla, which is trading at more than US$1,000 and has risen by more than 200 percent this year, and could still rise by more than 10 percent in a week.
It's the same scenario in Hong Kong, and it's not just new-economy stocks - even state-owned enterprises worth billions have risen crazily this month with some stocks surging over 10 percent in a single day.
But if you look at 1929 you will find the crazy rally ended in tragedy.
Admittedly, there's no market voice advising investors to be careful and when disaster strikes, there will only be words of comfort.
When markets began to rally at the end of March, they were propelled by liquidity from the central banks. But now, with the market continuing to rise, retail investors can't resist entering as well.
However, the crazy rally could be in its end-of-time moment because now's the best time for major shareholders and institutional investors to cash out.
You may ask, what factor would be the "main culprit" if the bubble were to burst? But there was no factor that triggered the crashes of 1929, 2000, 2015 and 2017 as the potential crisis had already appeared.
In 2000, most of the stocks did not have a real profit model while in 2015, China's economy came under downward pressure forcing the People's Bank of China to cut interest rates and required reserve ratios to support the economy.
And in early 2017, cracks had appeared in the American mortgage market with HSBC's US operations issuing a profit warning in November 2016 over charge-offs problems such as mortgage loans.
This tells us that when potential crises appeared, they were usually ignored by the markets and instead, there were even a puzzling wave of crazy rallies.
Of course, there could be many reasons for wild rallies, such as governments and central banks introducing unnecessary policies over fears of an economic recession, resulting in excessive liquidity and market bubbles.
Also, it is very difficult to estimate how long a bubble will last.
In 2000, the tech bubble burst after a year but in 2015, the A-share upsurge lasted only four months. So it is a bit difficult to know when the Nasdaq will peak or whether the Shanghai Composite Index will pierce 5,000 in the second half of the year.
As long as you remind yourself daily that investing in stocks at present is highly risky business and also remember Euripides' famous words that "those whom God wishes to destroy, he first makes mad," then go ahead and continue to participate.
But if you believe you are investing rather than gambling, the consequences will be severe.
Andrew Wong is chairman and CEO of Anli Securities
