Over the past week, the stock market has been rising very strongly with minor corrections along the way, but overall it appears to be rising not based on fundamentals but on speculation ("Rio Tinto rumours feed frenzy", AFR, May 10). In particular, it was mentioned that "the market was really suggesting that something was going to happen". All it took was a rumour without substance to send the share market up as irrational investors began buying into the rumour. The wild fire was further fuelled by herd behaviour of other investors jumping into the stock in frenzy, afraid of missing the chance of a tidy profit if they have missed the opportunity. Other than the rumours of BHP and RIO merger, the stock market has also being fuelled by growth in other mining companies such as FMG and MMX whose share prices had been growing steadily fuelled mainly by strong resource prices in particular iron ore (trading at historical high levels) and rising global demand especially from China and India. It appears that the current bullish sentiment in resources industry is akin to the 1990s dot.com speculative bubble where there was swelling amount of investments into technology stocks, mining stocks appears to be extremely appetizing at the moment. The growing appetite of private equities has stimulated the market by their record number of acquisitions completed this year. In respond, investors are making large speculation on their next targets, fuelling the share market even more in the process. In the height of the dot.com boom, then Reserve Board Chairman Alan Greenspan used the words "irrational exuberance" to describe the market. With the bullish growth in the resource sector and the mounting appetite of private equity firms, could a dÃ©jÃ vu of the 1990s irrational exuberance appear to be rematerializing? If it is so, are we able to learn from past experience and protect ourselves from the terrible downfall?