Download or read book Identifying Stock Market Bubbles written by Azar Karimov and published by Springer. This book was released on 2017-09-29 with total page 143 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book introduces readers to a new approach to identifying stock market bubbles by using the illiquidity premium, a parameter derived by employing conic finance theory. Further, it shows how to develop the closed form formulas of the bid and ask prices of European options by using Black-Scholes and Kou models. By using the derived formulas and sliding windows technique, the book explains how to numerically calculate illiquidity premiums. The methods introduced here will enable readers interested in risk management, portfolio optimization and hedging in real-time to identify when asset prices are in a bubble state and when that bubble bursts. Moreover, the techniques discussed will allow them to accurately recognize periods of exuberance and panic, and to measure how different strategies work during these phases with respect to calmer periods of market behavior. A brief history of financial bubbles and an outlook on future developments serve to round out the coverage.
Download or read book Bubbleology written by Kevin A. Hassett and published by Random House Digital, Inc.. This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: There are only two types of stocks: those safe from bubbles and those that are not. This is a fact of investing many discovered as they saw their fabulous gains whittled away by the extreme calamity of the Internet sector. But what about the future? Is there a way for investors to capture the enormous potential for profit that exists at the frontier of the economy, the place where innovation and genius operate, without placing their fortunes in jeopardy? Is there a way to evaluate price increases--and declines--and identify whether they are happening for good or bad reasons? Bubbleology makes it possible to separate the winners from the losers. It is a brilliant, practical, and original analysis of the stock market that bashes the conventional wisdom about bubbles, showing that such famous examples as Tulipomania were not, in fact, bubbles at all. Bubbleology shows that the traditional way of evaluating risk--equating it with volatility--is inherently flawed and incomplete. If a stock fluctuates a lot in price it is regarded as risky. If the price is stable, then it is not. What this simplistic way of thinking leaves out is the simple fact that companies trying something completely new that may fundamentally alter the economic landscape are operating at the frontier. The stock of such a company swims in a sea of ambiguity, its circumstances uncertain, since there is little to provide guidance about the future. But when nobody knows for sure what will happen, pundits tell us again about Tulipomania, the South Seas Bubble, and now the debacle of the Internet to scare investors away from potentially enormous profits. To realize those profits, however, investors have tounderstand the role that uncertainty and ambiguity--the absence of reliable information about future events--play in the modern stock market. Those who equate ambiguity with bubbles will miss the great opportunities of the future. Bubbleology provides a new way to observe what is really going on in the market, enabling you to understand whether a stock or a sector is suspicious--whether it is in a bubble and therefore something to be avoided. Finding bubbles requires knowing where to look and what to look for. Bubbleology will help you avoid both streaming into speculative manias and shying away from perfectly good business opportunities. It tells you why you need to avoid both pontificating pundits and overconfident stock analysts. With this unique and forward-thinking book, you can inspect suspicious stocks, accurately discern risk, and diagnose a blossoming bubble before it vanishes along with your money.
Download or read book Anatomy Of Stock Market Bubbles written by György Komáromi and published by ICFAI Books. This book was released on 2006-11-14 with total page 129 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book presents one of the most controversial happenings in economics stock market bubbles. The author discusses this topic threadbare and provides a critical analysis of related literature from different economic schools. This book also presents analy
Download or read book Boom and Bust written by William Quinn and published by Cambridge University Press. This book was released on 2020-08-06 with total page 297 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why do stock and housing markets sometimes experience amazing booms followed by massive busts and why is this happening more and more frequently? In order to answer these questions, William Quinn and John D. Turner take us on a riveting ride through the history of financial bubbles, visiting, among other places, Paris and London in 1720, Latin America in the 1820s, Melbourne in the 1880s, New York in the 1920s, Tokyo in the 1980s, Silicon Valley in the 1990s and Shanghai in the 2000s. As they do so, they help us understand why bubbles happen, and why some have catastrophic economic, social and political consequences whilst others have actually benefited society. They reveal that bubbles start when investors and speculators react to new technology or political initiatives, showing that our ability to predict future bubbles will ultimately come down to being able to predict these sparks.
Download or read book Boombustology written by Vikram Mansharamani and published by John Wiley & Sons. This book was released on 2011-02-08 with total page 287 pages. Available in PDF, EPUB and Kindle. Book excerpt: A multi-disciplinary framework through which to spot financial bubbles before they burst. Based on a popular undergraduate seminar, entitled Financial Booms & Busts, taught by the author at Yale University, Boombustology presents a multi-disciplinary framework for identifying unsustainable booms and forthcoming busts. The magnitude of our recent financial crisis mandates a firm understanding of this phenomenon before the next crisis occurs. Boombustology provides an in-depth look at several major booms and busts and offers a solid framework for thinking about future occurrences. Examines why booms and busts are not random and can therefore be identified Focuses upon various theoretical and disciplinary lenses useful in the study of booms and busts Contains a framework for thinking about and identifying forthcoming financial bubbles including several tell-tale indicators of a forthcoming bust. Illustrates the framework in action by evaluating China as a potential bubble in the making. If you want to make better decisions in today’s turbulent investment environment, understanding the dynamics of booms and busts is the best place the start. Boombustology can help you achieve this elusive goal. Vikram Mansharamani is a Lecturer at Yale University and a global equity investor.
Download or read book The Stock Market Bubbles Volatility and Chaos written by G.P. Dwyer and published by Springer Science & Business Media. This book was released on 2013-03-09 with total page 206 pages. Available in PDF, EPUB and Kindle. Book excerpt: Gerald P. Dwyer, Jr. and R. W. Hafer The articles and commentaries included in this volume were presented at the Federal Reserve Bank of St. Louis' thirteenth annual economic policy conference, held on October 21-22, 1988. The conference focused on the behavior of asset market prices, a topic of increasing interest to both the popular press and to academic journals as the bull market of the 1980s continued. The events that transpired during October, 1987, both in the United States and abroad, provide an informative setting to test alter native theories. In assembling the papers presented during this conference, we asked the authors to explore the issue of asset pricing and financial market behavior from several vantages. Was the crash evidence of the bursting of a speculative bubble? Do we know enough about the work ings of asset markets to hazard an intelligent guess why they dropped so dramatically in such a brief time? Do we know enough to propose regulatory changes that will prevent any such occurrence in the future, or do we want to even if we can? We think that the articles and commentaries contained in this volume provide significant insight to inform and to answer such questions. The article by Behzad Diba surveys existing theoretical and empirical research on rational bubbles in asset prices.
Download or read book Detecting Stock Market Bubbles written by Austin F. Murphy and published by . This book was released on 2016 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: To this day, economists argue about the existence of stock market bubbles. The literature review for this paper observes the analysis of four reputable bubble tests in an attempt to provide ample qualitative proof for the existence of bubbles. The first obstacle for creating an effective bubble detection test is the difficulty of estimating true fundamental values for equities. Without adequate estimations for the fundamental values of equities, the deviation between actual price and fundamental price is impossible to observe or estimate. Additionally, these tests are reliant on strong underlying assumptions, which tend to cloud results. This thesis applies a price-to-earnings ratio test adapted from a thesis written by Bram Weites and Malte von Maravic (2010). The model utilizes a relationship between the risk and price-to-earnings ratios of equities to econometrically test for bubbles. The test has an advantage over previous bubble literature because it does not require the estimation of the fundamental values of equities. A rolling regression is applied to the econometric model, and four bubbles are detected. The Dot-com bubble is detected with complete confidence, and three other bubbles are detected with slightly less confidence.
Download or read book Bubbleology written by Kevin Hassett and published by Currency. This book was released on 2002-07-23 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt: There are only two types of stocks: those safe from bubbles and those that are not. This is a fact of investing many discovered as they saw their fabulous gains whittled away by the extreme calamity of the Internet sector. But what about the future? Is there a way for investors to capture the enormous potential for profit that exists at the frontier of the economy, the place where innovation and genius operate, without placing their fortunes in jeopardy? Is there a way to evaluate price increases—and declines—and identify whether they are happening for good or bad reasons? Bubbleology makes it possible to separate the winners from the losers. It is a brilliant, practical, and original analysis of the stock market that bashes the conventional wisdom about bubbles, showing that such famous examples as Tulipomania were not, in fact, bubbles at all. Bubbleology shows that the traditional way of evaluating risk—equating it with volatility—is inherently flawed and incomplete. If a stock fluctuates a lot in price it is regarded as risky. If the price is stable, then it is not. What this simplistic way of thinking leaves out is the simple fact that companies trying something completely new that may fundamentally alter the economic landscape are operating at the frontier. The stock of such a company swims in a sea of ambiguity, its circumstances uncertain, since there is little to provide guidance about the future. But when nobody knows for sure what will happen, pundits tell us again about Tulipomania, the South Seas Bubble, and now the debacle of the Internet to scare investors away from potentially enormous profits. To realize those profits, however, investors have to understand the role that uncertainty and ambiguity—the absence of reliable information about future events—play in the modern stock market. Those who equate ambiguity with bubbles will miss the great opportunities of the future. Bubbleology provides a new way to observe what is really going on in the market, enabling you to understand whether a stock or a sector is suspicious—whether it is in a bubble and therefore something to be avoided. Finding bubbles requires knowing where to look and what to look for. Bubbleology will help you avoid both streaming into speculative manias and shying away from perfectly good business opportunities. It tells you why you need to avoid both pontificating pundits and overconfident stock analysts. With this unique and forward-thinking book, you can inspect suspicious stocks, accurately discern risk, and diagnose a blossoming bubble before it vanishes along with your money.
Download or read book Detecting and Measuring Financial Market Bubbles written by Rad Fariba and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Reviewing the history of financial bubbles indicates that there is no unique definition of the financial bubbles. Given the importance of understanding financial bubbles, the focus of this research is to define and detect bubbles in financial markets. The identification of bubbles is conducted by using stock prices from the internet bubble in the late 1990s. This study defines a bubble based on if the current stock price increases by more than 100% and then decreases by at least 50%. Bubbles were found in 30 of the 40 internet companies studied. The first approach using mostly 10 and 40 day moving averages indicated that most bubbles occurred in less than 150 days from beginning to end. The second approach was to measure the size of the bubble and results showed that most of the bubbles were smaller in size. For the third approach, measuring asymmetry of bubbles, results showed that stocks fall faster than they rise. These insights may be valuable to assist investors and policymakers with their decision making.
Download or read book Asset Price Bubbles written by William Curt Hunter and published by MIT Press. This book was released on 2005 with total page 650 pages. Available in PDF, EPUB and Kindle. Book excerpt: A study of asset price bubbles and the implications for preventing financial instability.
Download or read book Bursting the Bubble Rationality in a Seemingly Irrational Market written by David F. DeRosa and published by CFA Institute Research Foundation. This book was released on 2021-04-02 with total page 206 pages. Available in PDF, EPUB and Kindle. Book excerpt: The presence of speculative bubbles in capital markets (an important area of interest in financial history) is widely accepted across many circles. Talk of them is pervasive in the media and especially in the popular financial press. Bubbles are thought to be found primarily in the stock market, which is our main interest, although bubbles are said to occur in other markets. Bubbles go hand in hand with the notion that markets can be irrational. The academic community has a great interest in bubbles, and it has produced scholarly literature that is voluminous. For some economists, doing bubble research is like joining the vanguard of a Kuhnian paradigm shift in economic thinking. Not so fast. If bubbles did exist, they would pose a serious challenge to neoclassical finance. Bubbles would contradict the ideas that markets are rational or work in an informationally efficient manner. That’s what makes the topic of bubbles interesting. This book reviews and evaluates the academic literature as well as some popular investment books on the possible existence of speculative bubbles in the stock market. The main question is whether there is convincing empirical evidence that bubbles exist. A second question is whether the theoretical concepts that have been advanced for bubbles make them plausible. The reader will discover that I am skeptical that bubbles actually exist. But I do not think I or anyone else will ever be able to conclusively prove that there has never been a bubble. From studying the literature and from reading history, I find that many famous purported bubbles reflect inaccurate history or mistakes in analysis or simply cannot be shown to have existed. In other instances, bubbles might have existed. But in each of those cases, there are credible rational explanations. And good evidence exists for the idea that even if bubbles do exist, they are not of great importance to understanding the stock market.
Download or read book Weighted Approximations in Probability and Statistics written by Miklos Csorgo and published by . This book was released on with total page 458 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Speculation Trading and Bubbles written by José A. Scheinkman and published by Columbia University Press. This book was released on 2014-07-08 with total page 137 pages. Available in PDF, EPUB and Kindle. Book excerpt: As long as there have been financial markets, there have been bubbles—those moments in which asset prices inflate far beyond their intrinsic value, often with ruinous results. Yet economists are slow to agree on the underlying forces behind these events. In this book José A. Scheinkman offers new insight into the mystery of bubbles. Noting some general characteristics of bubbles—such as the rise in trading volume and the coincidence between increases in supply and bubble implosions—Scheinkman offers a model, based on differences in beliefs among investors, that explains these observations. Other top economists also offer their own thoughts on the issue: Sanford J. Grossman and Patrick Bolton expand on Scheinkman's discussion by looking at factors that contribute to bubbles—such as excessive leverage, overconfidence, mania, and panic in speculative markets—and Kenneth J. Arrow and Joseph E. Stiglitz contextualize Scheinkman's findings.
Download or read book Booms Bubbles and Bust in the US Stock Market written by David Western and published by Routledge. This book was released on 2020-10-07 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt: An extremely user-friendly overview of the inner workings of the US stock market. Things have changed a great deal since the heady days of the 1980s and we are now entering an era of profound uncertainty, with most analysts predicting trouble ahead. Indeed, the alarming decline of the NASDAQ shows no sign of abating and the fear is that traditional industries will be the next to bite the dust. September 11th has only added to the gloomy mood. This book examines the current conditions before looking back to the events of the past century - The Great Depression, the 1970s oil crisis, the party-for-the-rich atmosphere of the 1980s and the emergence of the new economy.
Download or read book Asset Pricing Under Asymmetric Information written by Markus Konrad Brunnermeier and published by Oxford University Press, USA. This book was released on 2001 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: The role of information is central to the academic debate on finance. This book provides a detailed, current survey of theoretical research into the effect on stock prices of the distribution of information, comparing and contrasting major models. It examines theoretical models that explain bubbles, technical analysis, and herding behavior. It also provides rational explanations for stock market crashes. Analyzing the implications of asymmetries in information is crucial in this area. This book provides a useful survey for graduate students.
Download or read book Narrative Economics written by Robert J. Shiller and published by Princeton University Press. This book was released on 2020-09-01 with total page 408 pages. Available in PDF, EPUB and Kindle. Book excerpt: From Nobel Prize–winning economist and New York Times bestselling author Robert Shiller, a groundbreaking account of how stories help drive economic events—and why financial panics can spread like epidemic viruses Stories people tell—about financial confidence or panic, housing booms, or Bitcoin—can go viral and powerfully affect economies, but such narratives have traditionally been ignored in economics and finance because they seem anecdotal and unscientific. In this groundbreaking book, Robert Shiller explains why we ignore these stories at our peril—and how we can begin to take them seriously. Using a rich array of examples and data, Shiller argues that studying popular stories that influence individual and collective economic behavior—what he calls "narrative economics"—may vastly improve our ability to predict, prepare for, and lessen the damage of financial crises and other major economic events. The result is nothing less than a new way to think about the economy, economic change, and economics. In a new preface, Shiller reflects on some of the challenges facing narrative economics, discusses the connection between disease epidemics and economic epidemics, and suggests why epidemiology may hold lessons for fighting economic contagions.
Download or read book Riding the Wave written by T Vijayan Babu and published by Independently Published. This book was released on 2024-05-24 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In "Riding the Waves," readers embark on a captivating journey through the turbulent waters of financial market bubbles. From the tulip mania of the 17th century to the dot-com boom of the late 20th century, this book delves deep into the history, dynamics, and consequences of speculative frenzies that have shaped the course of financial history. With meticulous research and engaging storytelling, the book explores the psychological, economic, and technological forces driving the formation and bursting of bubbles. Readers will discover the fascinating interplay between human behavior, market sentiment, and institutional factors that fuel speculative excesses and irrational exuberance. Drawing on insights from behavioral finance, macroeconomics, and financial regulation, "Riding the Waves" offers practical lessons and actionable strategies for investors, policymakers, and regulators to identify, assess, and mitigate the risks of speculative bubbles. Through case studies, analyses, and expert interviews, readers gain a comprehensive understanding of the warning signs, triggers, and implications of bubble dynamics in various asset classes and market environments. Moreover, the book delves into emerging trends and sectors susceptible to bubble-like behavior, such as cryptocurrencies, decentralized finance (DeFi), and disruptive technologies. It examines the intersection of innovation, regulation, and market stability, providing readers with valuable insights into navigating the opportunities and risks of the evolving financial landscape. As a call to action, "Riding the Waves" challenges stakeholders to embrace prudent risk management, regulatory reform, and investor education initiatives to promote market integrity, resilience, and sustainability. By empowering readers with knowledge, awareness, and informed decision-making tools, the book aims to inspire a collective effort to build a more stable, inclusive, and responsible financial system for the future. "Riding the Waves" is a must-read for anyone seeking to understand the ebb and flow of financial markets, uncover the secrets of speculative bubbles, and chart a course towards financial success in an ever-changing world. Whether you're an investor, policymaker, regulator, or financial market enthusiast, this book offers valuable insights and practical guidance for navigating the highs and lows of the financial markets with confidence and resilience.
