Odd Lots Citi's Dirk Willer on How You Know When the Bubble Is Over
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Nov 15, 2025 
Dirk Willer, Global Head of Macro Strategy at Citigroup and a macro research expert, discusses the current bubble in the stock market, pinpointing its onset in May and offering precise indicators for timing. He delves into the similarities between today's market and the dot-com bubble while explaining his unique approach to trading during bubbles. Willer also addresses gold's impressive rise and its connections to central bank actions and retail enthusiasm, alongside lessons from emerging markets that are increasingly relevant to U.S. dynamics.
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Dot‑Com Era Analyst Absurdities
- Dirk recalls absurd analyst pitches from the dot-com era, like claims pets would need phones.
- He uses these memories to show how extreme narratives fueled price mania in 2000.
Fed Cut-Into-Bubble Thesis Was Key
- The market's recent rally leaned on the thesis that the Fed would cut into a bubble, an uncommon historical scenario.
- Doubts about timely Fed easing remove a key plank of bullish narratives and increase wobbliness.
Precise Bubble Definition And Consequence
- Citi defines a bubble as assets >2 standard deviations above the long-term real trend using rolling windows.
- Once in bubble territory you should buy but expect to give back most in-bubble gains eventually.
