Powayseller, your overconfidence is highlighted by this comment:
“… who believes this asset bubble will not revert to its mean is clearly delusional”
While you are arguing about whether or not the bubble will revert to the mean, the real question is “What is the mean?”
Mean of what? What variable will revert to the mean? The growth, the price, the median, a ratio? Not every measurable variable can revert to the mean. And do you take the mean between for the last 100 years? the last 10 years? The 4 years before 2004? the 3 years before 2001?
Will it revert to the mean in a month or in 50 years? Will it revert to the 50 year mean in a year? or the 10 year mean in 50 years?
Here you are certain that your analysis is correct, when it isn’t. And, when you are called on it, you argue the wrong point.
I have had classes where we spent a week or two learning when regression to the mean analysis is just plain useless.
There are many, many ways to use it incorrectly, and you have found one of them.
Yes, the bubble will revert to the mean.
A truly meaningless point.