What is a bubble?

Bubbles are typically associated with dramatic asset price increases followed by a collapse. Bubbles arise if the price exceeds the asset's fundamental value. This can occur if investors hold the asset because they believe that they can sell it at a higher price to some other investor even though the asset's price exceeds its fundamental value. - Markus Brunnermaier at Princeton

In short, a market bubble is a time when public enthusiasm and greed over profiting from the stock market greatly exceeds its true value. Thus the "price" of investments goes up well beyond what it is worth. If we assume that total investment (GDI) grows at the same rate as the economy (GDP), total investment should never much exceed total gdp. If it does, either GDP should catch up, or the value of investments will go down.