Is it just me, or is the heat starting to go to everyone's head south of the equator?

In his bestseller The Power of Unfair Advantage, John Nesheim illustrates the boom-bust cycle of market phenomena as a "wave" consisting of six stages: displacement, euphoria, overtrading, mania, financial stress and finally, revulsion (during which no one gets funded). It's a good model, and one that those of us who experienced the tech bubble five years ago (who didn't?) will identify with. And before that, those that were invested in China in the late nineties will recognise. And if you were active at the time of the market crashes of the late eighties and even 1929, you'll recognise the stages of Nesheim's "wave model" too.

Those are just a few examples, so what is it about the nature of waves that keeps them coming back time and time again, only to eventually suck in a zealous camaraderie of supposedly informed market participants? Usually the problem in identifying an overly bullish market is in the fact that it takes on a form we don't recognise, so it's harder to see coming. But if there's a fairly standard pattern, shouldn't it be obvious?

I'm not sure about everyone else, but almost monthly on the front covers of the Business Monthly and daily in the financial presses at the moment I read more amazing news about the development of outsourcing to all these cheap, far-flung locations and how it is saving Western companies millions/billions of dollars a year on such 'overpriced' organizational components as IT and customer service at the same time as providing an entire platform/solution for economic development for these poor economies. In fact, one would be forgiven for thinking that some Western companies are contemplating 'outsourcing' the entire organization altogether (actually I think I saw something on that too) and that such reputable enterprises as AT&T and Bell Canada might soon re-brand as IT&T and Bell India.

Has everyone forgotten the days only half a decade ago when every company was going to become 'virtual' overnight and the internet was going to totally replace physical reality with such ground-breaking concepts as Pets.com (virtual pets and pet food!), Bamboo.com (virtual real estate agents!) and infamously ... Worldcom. (What was it exactly that they were going to do again other than make more millionaires than any other company around?)