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Hidden Collective Factors in Speculative Trading

Roehner, B.M.

posted on 01 January 2001

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Besides analyzing stock markets, the book considers a wide
range of speculative markets for various items such as real
estate, commodities , postage-stamps, antiquarian books.
In particular, it highlights the following regularities:(i) During
a speculative episode, the price of expensive items increases
more than the price of less expensive items. This is referred
to as price multiplier effect.(ii) Price peaks for stocks and
most commodities on average follow a well-defined pattern
that we call the sharp peak - flat through pattern; in
contrast real estate price peaks follow a flat peak
pattern.(iii) The stocks whose prices experience the
strongest increase during a bull market, better resist during
the subsequent bear market, an effect referred to as the
resilience pattern. Such regularities pave the way for a
mathematical theory of speculation. Being mainly empirical,
the book is easy to read and does not require technical
prerequisites in finance, economics or mathematics.





Contents

  • Prologue:
    • Introduction.
    • "Practical" versus
      "solvable" questions;
    • A crucial step: finding regularities;
    • Basic features of our approach;
    • Presentation of the book;
    • Overall view of speculative markets.
    • Overview of
      speculative markets;
    • Comparative perspective;

  • Hidden collective determinants:
    • Rational?
    • Hidden
      preconceptions:
    • long-term perspective;
    • Hidden
      preconceptions in economics rationality:
    • medium-term
      perspective;
    • Application to speculative trading;
    • Joint
      crashes.
    • Is speculation in diamonds related to speculation
      in cobalt?;
    • Are property bubbles in Tokyo and Paris
      related?;
    • Interdependence between different speculative
      markets;
    • Conclusion; Contagion of speculative frenzy.
    • Social contagion;
    • Volume of trade as an indicator of the
      extension of speculation;
    • Why can a bull market not last
      forever?;

  • Regularities in speculative episodes:
    • Peak
      amplitude: the price multiplier effect.
    • A case in point:
      property speculation in Britain;
    • Generalization of the price
      multiplier effect;
    • Implications and significance of the price
      multiplier effect;
    • Application of the price multiplier effect to
      stocks;
    • Peak shape: the sharp peak - flat trough pattern.-
      Describing speculative peaks;
    • Is there a pattern for stock
      price peaks?;
    • Stock market bubbles.- A case in point: 1929;
    • Comparative analysis;

  • Epilogue.









2001. XVI, 229 pp. 80 figs., 44 tabs. Hardcover
ISBN: 3-540-41294-8

Title: Hidden Collective Factors in Speculative Trading

Author: Roehner, B.M., University of Paris VII, Paris, France

Published: Springer-Verlag Berlin/Heidelberg 2001

Springer Price: DM 98,-