An investment blog chronicling a slow-moving turtle’s attempt at gaining financial independence. Using these variables we can look at whether the date at which people were interviewed in 2008 is related to their answers to the P0 questions in previous interviews. Research at the Massachusetts Institute of Technology suggests that there is evidence the frequency of stock market crashes follows an inverse cubic power law 8 This and other studies such as Prof. Gone are the days (but coming back?) when the bank used purely savers’ money to then lend. Shorting the stock means that you are selling a stock in the hopes that that stock will go down, and when it does go down you can buy that stock and pocket the difference. The market is very worried about the banking industry in Europe and the European market at present.
The systems for tracking the market prices could not keep up with trading volume, and that may have contributed to panic selling on that day. Until then, enjoy the ride up, because there’s going to be nothing fun about the stock market when this thing begins to tank.
Finally, whether you believe in a market crash or not, the above are what experts are keeping a sternly eye on. I think there’s a better that 50/50 chance that the S&P 500 repeats the same kind of cliff dive it took in August 2015 and the beginning of 2016. Some people would have you believe that nobody can anticipate the next great economic downturn and that to try to do so is just an exercise in guesswork”. Our local market needed to fall to 2,950 on the Philippine Stock Exchange index.
Investors dumped shares on heavy volume after a market research firm in Germany, GfK, reportedly showed soft sales in Europe for iPhone 7. Apple shares ( AAPL ), which had climbed 6% since the company’s Sept. In the graphs showing the stock exchange values, this also seems to be the case because the unit shows a number of points. By December, the average expectations returned to where they were prior to the crash.
On top of these problems, Kezdi and Willis (2008) document that many HRS respondents do not give the same answer to the same probability question (say, P0) when it is asked twice within the survey twenty minutes apart. So while the novice investor dumps their stock and leaves the market once conditions become undecided or volatile, the savvy investor rubs their hands together in glee. As we see, there are many missing values in the HRS stock market expectation data.