High valuations and crazed speculative bets from inexperienced day traders – is the current market a "real McCoy" bubble, as veteran money manager and bubble expert Jeremy Grantham recently remarked?

No. Bubbles are characterised by euphoria, but that’s nowhere to be seen. Yes, the day traders are doing “crazy stuff”, as Grantham put it, but most retail investors are cautious.

Cautious

There have been twice as many bears as bulls in the last two American Association of Individual Investors (AAII) weekly polls. This month's Bank of America monthly fund manager survey suggests professional investors remain cautious.

Similarly, cash held in money market funds hit record levels in May and there have been “almost no outflows” yet, as Deutsche Bank’s Binky Chadha commented in a recent note. Yes, stocks look expensive and markets extended, but sentiment is muted and there’s a mountain of cash on the sidelines – hardly characteristic of a bubble.