Jump to ContentJump to Main Navigation
Why Stock Markets CrashCritical Events in Complex Financial Systems$
Users without a subscription are not able to see the full content.

Didier Sornette

Print publication date: 2017

Print ISBN-13: 9780691175959

Published to Princeton Scholarship Online: May 2018

DOI: 10.23943/princeton/9780691175959.001.0001

Show Summary Details
Page of

PRINTED FROM PRINCETON SCHOLARSHIP ONLINE (www.princeton.universitypressscholarship.com). (c) Copyright Princeton University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in PRSO for personal use.date: 16 September 2021

Prediction of Bubbles, Crashes, and Antibubbles

Prediction of Bubbles, Crashes, and Antibubbles

Chapter:
(p.320) Chapter 9 Prediction of Bubbles, Crashes, and Antibubbles
Source:
Why Stock Markets Crash
Author(s):

Didier Sornette

Publisher:
Princeton University Press
DOI:10.23943/princeton/9780691175959.003.0009

This chapter examines how to predict stock market crashes and other large market events as well as the limitations of forecasting, in particular in terms of the horizon of visibility and expected precision. Several case studies are presented in detail, with a careful count of successes and failures. After providing an overview of the nature of predictions, the chapter explains how to develop and interpret statistical tests of log-periodicity. It then considers the concept of an “antibubble,” using as an example the Japanese collapse from the beginning of 1990 to the present. It also describes the first guidelines for prediction, a hierarchy of prediction schemes that includes the simple power law, and the statistical significance of the forward predictions.

Keywords:   stock market crash, prediction, log-periodicity, antibubble, power law, forward prediction

Princeton Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us.