One of the things I teach in my history course about the history of financial fraud is that, interestingly, the fraud cycle tracks the financial cycle but with a lag. And the longer that you have a bull market, the more and more specious companies begin to float, to go public, to be aggressive with their earnings forecast, to be aggressive with their accounting, and that’s what we’re seeing in the United States right now.

We’re seeing more and more interesting stories where managements are really, in some cases, crossing the line into what’s acceptable behavior and, and are inflating their results. As a cycle goes on, investors’ sense of disbelief begins to erode. Their willingness to say, “Wait a minute, as markets go higher and higher, inevitably means, well I’m going to be left behind unless I chase this stuff.”

And that’s when things get the riskiest.

One of the things we’ve observed, and I know others have recently as well, is interestingly in technology, globally, that the most innovative and highest-return companies, including some of the highest-growth companies, have some of the lowest valuations.