Money and Finance
- Gmo's Q1 Letter
Free registration may be required. Link to: Looking for Bubbles and In Defense of Risk Aversion GMO's 1Q 2014 Letter includes two pieces on bubbles by Jeremy Grantham ("Looking for Bubbles, Part 1: A Statistical Approach") and Edward Chancellor ("Looking...
- The Extraordinary Popular Delusion Of Bubble Spotting - By Jason Zweig
Can you spot a bubble? Ever since 1841, when a Scottish journalist named Charles Mackay published the book known today as "Extraordinary Popular Delusions and the Madness of Crowds," the answer has seemed clear. If you watch carefully for signs of euphoria,...
- Look Out Below: Why Skyscrapers Are Classic Bubble Indicators
Thanks to Barry for passing this along.In China, five of the world’s ten largest buildings are now under construction. Look out below!, says Vikram Mansharamani, a financial services veteran and part-time academic who has developed a multidisciplinary...
- The Absolute Return Letter - April 2010: When The Facts Change
We are currently in what I like to call echo bubble territory. I assume that most of our readers are familiar with the DNA of an asset bubble (even if Greenspan isn’t). Echo bubbles are children of primary asset bubbles and are usually conceived when...
- Why We’ll Always Have More Money Than Sense - By Robert Shiller
When it comes to market bubbles and how they are created, very little, if anything, has changed. This is because human psychology has not changed. Massive bubbles are created when large numbers of people buy into "new era" stories that exaggerate how...
Money and Finance
How Many Fools Does It Take to Make a Bubble? – By Jason Zweig
Where do market "bubbles" come from? A team of neuroscientists and economists has produced the first scientific evidence for what prudent investors have long believed: Paying attention to what others are doing is the easiest way for traders to get carried away.
This new research can't prevent the mass contagions that lead to bubbles. But it might help you step back before you get swept up in the next one.
Economists have struggled and failed to explain why markets turn into manias. Some have denied bubbles exist; others have argued bubbles must somehow be "rational." Often, the argument is that bubbles are caused by "uninformed" traders, or "dumb money," while the "smart money" sits on the sidelines.
The latest findings suggest, however, that bubbles might be caused not by traders who lack information but by those who have too much.
- Gmo's Q1 Letter
Free registration may be required. Link to: Looking for Bubbles and In Defense of Risk Aversion GMO's 1Q 2014 Letter includes two pieces on bubbles by Jeremy Grantham ("Looking for Bubbles, Part 1: A Statistical Approach") and Edward Chancellor ("Looking...
- The Extraordinary Popular Delusion Of Bubble Spotting - By Jason Zweig
Can you spot a bubble? Ever since 1841, when a Scottish journalist named Charles Mackay published the book known today as "Extraordinary Popular Delusions and the Madness of Crowds," the answer has seemed clear. If you watch carefully for signs of euphoria,...
- Look Out Below: Why Skyscrapers Are Classic Bubble Indicators
Thanks to Barry for passing this along.In China, five of the world’s ten largest buildings are now under construction. Look out below!, says Vikram Mansharamani, a financial services veteran and part-time academic who has developed a multidisciplinary...
- The Absolute Return Letter - April 2010: When The Facts Change
We are currently in what I like to call echo bubble territory. I assume that most of our readers are familiar with the DNA of an asset bubble (even if Greenspan isn’t). Echo bubbles are children of primary asset bubbles and are usually conceived when...
- Why We’ll Always Have More Money Than Sense - By Robert Shiller
When it comes to market bubbles and how they are created, very little, if anything, has changed. This is because human psychology has not changed. Massive bubbles are created when large numbers of people buy into "new era" stories that exaggerate how...