Download or read book The Disposition Effect in Boom and Bust Markets written by Sabine Bernard and published by . This book was released on 2018 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: The disposition effect is one of the most explored biases in behavioral finance, yet most papers investigating the disposition effect use data that only cover boom periods and assume that the disposition effect is constant over time. We use individual investor trading data that comprise several boom and bust periods (2001-2015) and show that the disposition effect is not constant over time. Instead, the disposition effect moves countercyclical with the market, i.e., is elevated in bust periods and reduced in boom periods. We find that this phenomenon is mainly driven by the amplified frequency of gain realizations in bust periods. Investors are, in relative terms, 25 percent more likely to realize winner assets in bust than in boom periods. Our study encourages further investigations into the effect of macroeconomic cycles on investors' trading behavior.
Download or read book The Disposition Effect in Boom and Bust Markets written by Sabine Bernard and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Mastering The Market Cycle written by Howard Marks and published by HarperCollins. This book was released on 2018-10-02 with total page 339 pages. Available in PDF, EPUB and Kindle. Book excerpt: A NEW YORK TIMES, WALL STREET JOURNAL, AND USA TODAY BESTSELLER The legendary investor shows how to identify and master the cycles that govern the markets. We all know markets rise and fall, but when should you pull out, and when should you stay in? The answer is never black or white, but is best reached through a keen understanding of the reasons behind the rhythm of cycles. Confidence about where we are in a cycle comes when you learn the patterns of ups and downs that influence not just economics, markets, and companies, but also human psychology and the investing behaviors that result. If you study past cycles, understand their origins and remain alert for the next one, you will become keenly attuned to the investment environment as it changes. You’ll be aware and prepared while others get blindsided by unexpected events or fall victim to emotions like fear and greed. By following Marks’s insights—drawn in part from his iconic memos over the years to Oaktree’s clients—you can master these recurring patterns to have the opportunity to improve your results.
Download or read book Moods and Markets written by Peter Atwater and published by FT Press. This book was released on 2013 with total page 205 pages. Available in PDF, EPUB and Kindle. Book excerpt: "With foreword by Robert R. Prechter"--Cover. - "Minyanville"--Cover
Download or read book Irrational Markets and the Illusion of Prosperity written by Don DeVitto and published by Routledge. This book was released on 2013-10-31 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt: Irrational exuberance - the now-famous utterance of Alan Greenspan, referred to the seemingly unending upward spiral of the stock market. Of course, as every investor knows, the stock market plummeted after this comment was made, only to recover and exceed every known record over the next year. Nothing, it appears, could keep this market down: not inflationary pressures, concerns over the Asian economic crisis, lack of earnings in many companies, nor elevated stock prices. Nothing, it seems, could stop investors in their passion for bidding up prices of stocks, especially technology and telecommunications. But beware: Irrational Markets warns that Americans are living in an economic dreamland, and that the long bull market and low unemployment levels have only masked a disturbing economic reality - in short, we're in for a rude awakening. Based on extensive research, this provocative book is sobering reading for any current or would be investor.
Download or read book The Era of Uncertainty written by Francois Trahan and published by John Wiley & Sons. This book was released on 2011-07-13 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt: Macroeconomic Investment Strategies for an Era of Economic Uncertainty “Over the years, François’ insightful analyses of the business cycle has led to market calls that have both benefitted investors on the upside and (more important to many) protected them from losses on the downside. François’ incredible track record in successfully interpreting the trends that can be found in leading indicators and other macroeconomic data have also led to his well deserved reputation as an expert in sector rotation - providing investors on both the long and short side of the market opportunities to profit from his ideas. In my opinion, his most important and influential macro prediction to date was his call in the middle of the last decade when he predicted that the worst housing crisis in American history would soon be upon us, and that it would have far-ranging implications for both the global economy and world financial markets.”
Download or read book Bull written by Maggie Mahar and published by Harper Collins. This book was released on 2009-10-13 with total page 896 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 1982, the Dow hovered below 1000. Then, the market rose and rapidly gained speed until it peaked above 11,000. Noted journalist and financial reporter Maggie Mahar has written the first book on the remarkable bull market that began in 1982 and ended just in the early 2000s. For almost two decades, a colorful cast of characters such as Abby Joseph Cohen, Mary Meeker, Henry Blodget, and Alan Greenspan came to dominate the market news. This inside look at that 17-year cycle of growth, built upon interviews and unparalleled access to the most important analysts, market observers, and fund managers who eagerly tell the tales of excesses, presents the period with a historical perspective and explains what really happened and why.
Download or read book Investor Herding Behavior and Its Effect on Stock Market Boom Bust Cycles written by Haifa Hammami and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study, we test for the presence of investor herding behavior in the Tunisian stock market. Further, we explore the explanatory factors of the occurrence of the probability of stock market booms and busts by combining herding behavior of investors and economic and financial fundamentals. We find that investors exhibit different levels of herding behavior -- herding strongly exists in both booms and busts of stock market. Our results show that herding behavior contributes to an increase in the probability of stock market booms. In addition, the economic and financial fundamentals lead to the emergence of Tunisian stock market boom-bust cycles.
Download or read book Boombustology written by Vikram Mansharamani and published by Wiley. This book was released on 2011-03-08 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: A multi-disciplinary framework through which to spot financialbubbles before they burst. Based on a popular undergraduate seminar, entitled FinancialBooms & Busts, taught by the author at Yale University,Boombustology presents a multi-disciplinary framework foridentifying unsustainable booms and forthcoming busts. The magnitude of our recent financial crisis mandates a firmunderstanding of this phenomenon before the next crisis occurs.Boombustology provides an in-depth look at several majorbooms and busts and offers a solid framework for thinking aboutfuture occurrences. Examines why booms and busts are not random and can thereforebe identified Focuses upon various theoretical and disciplinary lenses usefulin the study of booms and busts Contains a framework for thinking about and identifyingforthcoming financial bubbles including several tell-taleindicators of a forthcoming bust. Illustrates the framework in action by evaluating China as apotential bubble in the making. If you want to make better decisions in today’s turbulentinvestment environment, understanding the dynamics of booms andbusts is the best place the start. Boombustology canhelp you achieve this elusive goal. Vikram Mansharamani is a Lecturer at Yale University and aglobal equity investor.
Download or read book Disposition Effect and Firm Size written by Elena Ranguelova and published by . This book was released on 2008 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economists and investment professionals have long been puzzled by the tendency of individual investors to sell the winners from their stock portfolio and to hold on to the losers. I analyze the daily trading records of 78,000 clients of a discount brokerage house over six years and document, surprisingly, that such behavior (known as the disposition effect) is concentrated primarily in large-cap stocks. Trades in stocks at the bottom 40 percent of the market capitalization distribution exhibit a reverse disposition effect: investors keep their winners and realize their losers. Moreover, the relationship between firm size and the disposition effect appears to be monotonic. The larger the market capitalization of the firm, the more likely people are to realize their gain and to hold on to their loss. This new evidence challenges the current view of the literature that the disposition effect is an implication of a prospect-theory type of individual preferences.I examine different potential explanations for the size dependence of the disposition effect, such as margin calls being triggered more often by the more volatile small stocks, different trading styles in small stocks and large stocks and different behavior with regard to small and large gains and losses. My findings are consistent with a view that individual beliefs rather than preferences are generating the disposition effect.
Download or read book The Long Good Buy written by Peter C. Oppenheimer and published by John Wiley & Sons. This book was released on 2020-06-15 with total page 311 pages. Available in PDF, EPUB and Kindle. Book excerpt: PRAISE FOR THE LONG GOOD BUY: "Oppenheimer offers brilliant insights, sage advice and entertaining anecdotes. Anyone wishing to understand how financial markets behave – and misbehave – should read this book now." Stephen D. King, economist and author of Grave New World: The End of Globalisation, the Return of History "Peter has always been one of the masters of dissecting financial markets performance into an understandable narrative, and in this book, he pulls together much of his great thinking and style from his career, and it should be useful for anyone trying to understand what drives markets, especially equities." Lord Jim O'Neill, Chair, Chatham House "A deeply insightful analysis of market cycles and their drivers that really does add to our practical understanding of what moves markets and long-term investment returns." Keith Skeoch, CEO, Standard Life Aberdeen "This book eloquently blends the author's vast experience with behavioural finance insights to document and understand financial booms and busts. The book should be basic reading for any student of finance." Elias Papaioannou, Professor of Economics, London Business School "This is an excellent book, capturing the insights of a leading market practitioner within the structured analytical framework he has developed over many years. It offers a lively and unique perspective on how markets work and where they are headed." Huw Pill, Senior Lecturer, Harvard Business School "The Long Good Buy is an excellent introduction to understanding the cycles, trends and crises in financial markets over the past 100 years. Its purpose is to help investors assess risk and the probabilities of different outcomes. It is lucidly written in a simple logical way, requires no mathematical expertise and draws on an amazing collection of historical data and research. For me it is the best and most comprehensive introduction to the subject that exists." Lord Brian Griffiths, Chairman - Centre for Enterprise, Markets and Ethics, Oxford
Download or read book What Drives the Disposition Effect written by Nicholas Barberis and published by . This book was released on 2006 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: One of the most striking portfolio puzzles is the "disposition effect": the tendency of individuals to sell stocks in their portfolios that have risen in value since purchase, rather than fallen in value. Perhaps the most prominent explanation for this puzzle is based on prospect theory. Despite its prominence, this explanation has received little formal scrutiny. We take up this task, and analyze the trading behavior of investors with prospect theory preferences. We find that, at least for the simplest implementation of prospect theory, the link between these preferences and the disposition effect is not as obvious as previously thought: in some cases, prospect theory does indeed predict a disposition effect, but in others, it predicts the opposite. We provide intuition for these results, and identify the conditions under which the disposition effect holds or fails. We also discuss the implications of our results for other disposition-type effects that have been documented in settings such as the housing market, futures trading, and executive stock options.
Download or read book Economic and Statistical Significance of Disposition Effect and Momentum in the US Stock Market written by Jungha Woo and published by . This book was released on 2014 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Disposition effect is the tendency of investors to ride losses and lock in gains. Capital gains overhang is a quantity used in prior literature to construct hypothesis tests for the existence of the disposition effect using publicly available stock market data. This quantity estimates the difference between the current price of a stock and the average price at which the currently held shares of the stock have been purchased by their current owners. Momentum effect is the tendency of the recent price trends to persist. We construct a number of trading strategies based on the capital gains overhang and momentum. We use the US stock market data to show that these strategies were consistently profitable during 1980-2013, and negatively correlated with the market. These conclusions hold even after eliminating small-cap and small-price stocks that may be difficult to trade, and after introducing a realistic trading cost for every transaction. We find a high empirical correlation between the strategies based on momentum and on the capital gains overhang, and argue that the former may be preferable for practitioners because of better performance and simpler implementation. These results also suggest that, rather than measuring the disposition effect, the capital gains overhang may simply be a proxy for momentum. Our findings would be of interest to portfolio managers, quantitative traders, researchers who analyze financial signals, as well as ordinary investors seeking to avoid common investor biases.
Download or read book Profiting in Bull Or Bear Markets written by George Dagnino and published by McGraw-Hill Companies. This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Business cycles create investment opportunities. Dagnino's guide shows how to interpret economic and financial data to identify business cycles, then take advantage of those cycles to minimize losses while achieving superior, more predictable returns. This is a blueprint for assembling the different factors needed for developing a sound, consistent investment strategy.
Download or read book Unexpected Returns written by Ed Easterling and published by . This book was released on 2005 with total page 302 pages. Available in PDF, EPUB and Kindle. Book excerpt: Before you read any how-to investment books or seek financial advice, read Unexpected Returns, the essential resource for investors and investment professionals who want to understand how and why the financial markets are not the same now as they were in the 1980s and 1990s. In addition to explaining the fundamentals, this book takes you on a graphic journey through the seasons of the market, tying together economics and finance to explain the stock market's cycles. Using comprehensive full-color charts and graphs, it offers an in-depth exploration of what has changed over the past five years - and what you can do about it to avoid disappointment with your investments. This unique combination of investment science and investment art will enable you to differentiate between irrational hope and a rational view of the current financial markets. Based on years of meticulous research, it provides the sensible conclusions that will drive your future investment choices and give you the confidence to rely on your investment outlook, whatever your financial strategy. Book jacket.
Download or read book Will Market Condition Influence the Disposition Effect written by 林建廷 and published by . This book was released on 2007 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Trouble with Prosperity written by James Grant and published by Crown. This book was released on 1996 with total page 378 pages. Available in PDF, EPUB and Kindle. Book excerpt: In Boom and Bust in the American Century, James Grant tells why the financial prosperity of the 1990s is destined to collapse. This is a book about cycles of optimism and pessimism, of bull markets and bear markets, and of orthodoxy and heresy. Boom and Bust in the American Century is sophisticated financial writing by a gifted author and analyst at the top of his form.
