Book: "Why Stock Markets Crash"

Discussion in 'Educational Resources' started by Tycoon, Jan 17, 2003.

  1. Tycoon


    A new book called "Why Stock Markets Crash" was the subject of a fascinating article by Jon Markman at MSN.

    Has anyone read this book? Did it help you in your trading? Or is it full of arcane formulas and therefore beyond the ken of most readers?

  2. Tycoon,

    I read it. He analyzed all kinds of previous market bubbles using log-periodic curve fitting, e.g., the Formula on Page 232. Much of the technical literature has already covered other methods of fitting such as linear regression and n-order polynomials, but he seems to have covered the fractal dimension of blowoff tops and bottoms pretty well. I suppose one could argue the validity of analyzing past bubbles after mining for the best input variables and then fitting a curve, but at the very least one could try to model intraday short squeezes or similar behavior.

  3. Your last question: yes, it is full of arcane formulae but if you have a modeling package such as Mathematica or Matlab, it shouldn't be too difficult for experimentation. You may want to dig into his research here: