Is irrational exuberance a good book?
Irrational Exuberance is more than ever a cogent, chilling, and astonishingly far-seeing analytical work that no one with any money in any market anywhere can afford not to read–and heed. Book recommendations, author interviews, editors’ picks, and more.
When did Greenspan say irrational exuberance?
1996
The term was popularized by former Fed chair Alan Greenspan in a 1996 speech addressing the burgeoning internet bubble in the stock market. Irrational exuberance has become synonymous with the creation of inflated asset prices associated with bubbles, which ultimately pop and can lead to market panic.
Who coined the term irrational exuberance?
Nobel laureate economist Robert Shiller, who may have coined the term, cemented its renown with the publication in 2000 of his now-classic book, “Irrational Exuberance.”
When was irrational exuberance written?
2000
Irrational Exuberance is a March 2000 book written by American economist Robert J. Shiller, a Yale University professor and 2013 Nobel Prize winner.
What was Alan Greenspan the Federal Reserve chairman referring to when he called irrational exuberance?
“Irrational exuberance” is the phrase used by the then-Federal Reserve Board chairman, Alan Greenspan, in a speech given at the American Enterprise Institute during the dot-com bubble of the 1990s. The phrase was interpreted as a warning that the stock market might be overvalued.
What is an example of irrational exuberance?
Examples of Irrational exuberance US house prices boomed in mid 2000s. In 2003-05, the growth in sub-prime mortgage lending was based on irrational exbuerance. The period leading up to stock market crash in 1929. Credit bubble and credit crisis of the 2000s.
What are asset bubbles?
An asset bubble occurs when the price of an asset, such as stocks, bonds, real estate, or commodities, rises at a rapid pace without underlying fundamentals, such as equally fast-rising demand, to justify the price spike.
What are irrational markets?
When markets are irrational, you can either do something or you can do nothing. When the market is irrational on the downside, you can buy or do nothing. When the market is irrational on the upside, you can sell or do nothing. For most people, especially long-term investors, doing nothing is best.
Do supporters of behavioral finance believe in the efficient market?
The accepted view is that markets operate efficiently and stock prices instantly reflect all available information. While efficient market theory remains prominent in financial economics, proponents of behavioral finance believe numerous biases, including irrational and rational behavior, drive investor’s decisions.
What is irrational exuberance by Shiller about?
The third edition of Irrational Exuberance by Shiller analyses and explains the influence of structural, cultural, and psychological factors in the creation of bubbles. The book reads as the mix of an academic economic research paper and a popular non-fiction book, and contains an abundance of useful references to prior research.
Is “irrational exuberance” worth reading?
That indeed came to pass, with consequences that the 2009 preface to this edition deals with. Irrational Exuberance is more than ever a cogent, chilling, and astonishingly far-seeing analytical work that no one with any money in any market anywhere can afford not to read–and heed.
What is irrational exuberance in investing?
Irrational exuberance refers to extreme behavior enthusiasm, often compared to the stock market and investor behavior. Typically, it means that investors are excited and driving up stock prices regardless of the fundamentals that would support those increases.
Was Shiller right about the dot-com bubble?
Shiller wrote the book Irrational Exuberance right before the bubble burst of the 2000 dot-com bubble. As we now know, this was at the height of the market bubble, but Shiller was ahead of the curve, as no one was writing about the bubble bursting at the time.