“Is this a bubble or a recovery?” It is a question often asked, but it is one that threatens to distract investors, consumers and governments.

A bubble involves a rapid and unfounded rise in prices. Buying assets in such circumstances requires investors to rely on the “greater fool” argument, to believe, mistakenly, that they will make money on the up and get out before the burst.

Irrational exuberance is not evident today. It is rational to have revalued companies upwards by 50 per cent from those frozen post-Lehman days as the world recognised that they were not going out of business, and it is rational to expect further uprating of equity valuations. We are living a rational bubble. Beware, then, of writing it off. That way lies missed opportunity.