The Nasdaq fell another ≈ 10% on Friday the 14’th of April 2000 signaling the end of a remarkable speculative high-tech bubble starting in spring 1997. The closing of the Nasdaq at 3321 corresponds to a total loss of over 35% since its all-time high of 5133 on the 10’th of March 2000. Similarities to the speculative bubble preceding the infamous crash of October 1929 are quite striking: The bel...

A general theory of innovation and progress in human society is outlined, based on the combat between two opposite forces (conservatism/inertia and speculative herding “bubble” behavior). We contend that human affairs are characterized by ubiquitous “bubbles”, which involve huge risks which would not otherwise be taken using standard cost/benefit analysis. Bubbles result from self-reinforcing p...

Recent studies show that individual investors tend to speculate on stock markets and hold shares with a lottery-like return. For this speculation of people have a significant impact on stock returns, individual investors must trade the same shares with the same time. The purpose of this study was to investigate the effect of the speculative bubble on the stock returns of companies in Iran. Foll...

Statistical analysis of financial data most focused on testing the validity of Brownian motion (Bm). Analysis performed on several time series have shown deviation from the Bm hypothesis, that is at the base of the evaluation of many financial derivatives. We inquiry in the behavior of measures of performance based on maximum drawdown movements (MDD), testing their stability when the underlying...

Entrepreneurs are exposed to large uninsured risks, which may discourage them from creating productive assets. This generate asset shortages and stimulate speculative demand for bubbles. study introduces entrepreneurial risks into a textbook growth model with infinitely-lived agents. In the model, entrepreneurs face no credit constraints. If degree of is in middle range, bubbles likely emerge. ...