Introduction

William T. Ziemba, Sebastien Lleo and Mikhail Zhitlukhin

Chapter 1 in Stock Market Crashes:Predictable and Unpredictable and What to do About Them, 2017, pp 1-10 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Trying to predict stock market declines or crashes is important to all investors and especially to speculative investors and hedge funds. Avoiding them or dealing with them greatly improves portfolio performance. But it is hard to predict these declines. Moreover, to quote Peter Lynch:Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselvesFinancial bubbles and crashes are certainly not new, and the most dramatic ones tend to leave a lasting memory. "The South Sea Bubble, a Scene in 'Change Alley in 1720'," reproduced in Figure 1.1, was painted by Edward Matthew Ward in 1847, nearly 130 years after the events but only a couple of years after another famous stock market bubble: Railway Mania…

Keywords: Stock Market Crashes; Brexit; Trump; Financial Bubbles (search for similar items in EconPapers)
JEL-codes: F30 (search for similar items in EconPapers)
Date: 2017
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