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בשנת 1720, גילה המדען המהולל, סר אייזיק ניוטון, דבר או שניים על כללי גרביטציה כלכליים והתנפצות בועות. בשיאה של בועת הים-הדרומי, השקיע המדען הגאון הון לא קטן בשוק ההון האנגלי, במחשבה שידענותו הכלכלית שקולה לזו המדעית. בשלב מסויים ניוטון אף השיג רווח נאה של 5,000 פאונד. אבל המדען טעה. בסופה של הבועה, ירדו מחשבונו לטמיון 20,000 פאונד. ניוטון סבל בדיוק כמו משקיעים אחרים בני זמננו.

למרות שבועות נראות, באופן מטעה, קצרות תוחלת, תוחלתן ארוכה וגרורותיהן רחבות - אלו כוללות תקופות מיתון ארוכות והתערבות ממשלתית שבדר"כ רק מרעה את המצב.

התנפצות הבועות במהלך 400 השנים האחרונות - בועת הים-הדרומי באנגליה, בועת מיסיסיפי הצרפתית, בועת הצבעוניים ההולנדית, קריסת השוק האמריקאי ב-1929 וצניחת הניקיי היפני ב-1990 - העבירו את האומות למיתון עמוק שנמשך לכל הפחות עשור שנים ובמקרה של בועת הים-הדרומי, חצי מאה שנים.

בועת הים הדרומי היתה כה דרמטית עד שהפרלמנט האנגלי חוקק את "חוק הבועה", שאסר על חברות להנפיק ניירות-ערך. החוק עמד תקף במשך 100 שנים, עד שבוטל בשנת 1882. בועת מיסיסיפי הצרפתית (שהולידה את המושג "מיליונר") הובילה לכך שהצרפתים לא יכלו להדפיס כסף במשך 80 שנה. והמדיניות המצמצמת הקשוחה שהוביל הבנק הפדרלי האמריקאי החדש לאחר הקריסה בשוק האמריקאי ב-1929, העמיקה והאריכה את "השפל הגדול".

הלקח החשוב שניתן ללמוד מכל הבועות, לרבות האחרונה, הוא לקח עתיק יומין. אין שום דבר חדש תחת השמש. אופי האדם ממשיך להיות כפי שהיה מאז ומעולם. אנשים תמיד חשו שהמצאות חדשות שינו בצורה כלשהי את "המשוואה" לפיה השוק פועל. תחושה זו היתה תמיד שגויה.

"dot.con" - תחקיר תוכנית פרונטליין (וידאו באנגלית), המספר את סיפור בועת האינטרנט בשלהי שנות ה-90 של המאה הקודמת והתנפצותה בשנת 2000.

[Kindleberger] "Mundus vult decipi - ergo decapitur: The world wants to be deceived, let it therefore be deceived".
[Greenspan] "Human nature lies at the heart of the problem, and I don't know what monetary policy we can implement to alter human nature".
[Shiller] "...speculative bubble: a situation in which temporarily high prices are sustained largely by investors' enthusiasm rather than by consistent estimation of real value"
Bubbles, Human Judgment, and Expert Opinion, SHILLER, 2001
Dr. Robert J. Shiller"Research in psychology and behavioral finance is surveyed for evidence to what extent experts such as professional investment managers or endowment trustees may behave in such a way as to help perpetuate speculative bubbles in financial markets. This paper discusses scholarly psychological literature on the representativeness heuristic, overconfidence, attentional anomalies, self-esteem, conformity pressures, salience and justification for insights into weaknesses in expert opinion. The role of the prudent person standard and the news media in influencing experts is considered. The relevance of the literature on testing of the efficient markets theory is discussed."
Riding the South Sea Bubble, TEMIN and VOTH, 2003
"The efficient markets hypothesis implies that, in the presence of rational investors, bubbles cannot develop. We analyze the trading behavior of a sophisticated investor, a London goldsmith bank, during the South Sea bubble in 1720. The bank believed the stock to be overvalued, yet found it profitable not to attack the bubble. Detailed examination of daily transactions in the London stock market shows that "riding the bubble" was a highly profitable strategy. These findings lend support to recent theoretical work arguing that predictable investor sentiment may prevent rational investors from attacking a bubble".
Regime Switching as a Test for Exchange Rate Bubbles, Van NORDEN
"This paper develops a new test for speculative bubbles, which is applied to data for the Japanese yen, the German mark and the Canadian dollar exchange rates from 1977 to 1991. The test assumes that bubbles display a particular kind of regime-switching behaviour, which is shown to imply coefficient restrictions on a simple switching-regression model of exchange rate innovations. Test results are sensitive to the specification of exchange rate fundamentals and other factors. Evidence most consistent with the bubble hypothesis is found using an overshooting model of the Canadian dollar and a PPP model of the Japanese yen".
"Thermometers" of Speculative Frenzy, ROEHNER and SORNETTE, 2000
"We show that during the build-up phase of a bubble, there is a growing interest in the public for the commodity in question, whether it consists in stocks, diamonds or coins. That interest can be estimated through different indicators: increase in the number of books published on the topic, increase in the subscriptions to specialized journals. Moreover, the well-known empirical rule according to which the volume of sales is growing during a bull market finds a natural interpretation in this framework: sales increases in fact reveal and pinpoint the progress of the bubble's diffusion throughout society. We also present a simple model of rational expectation which maps exactly onto the Ising model on a random graph. The indicators are then interpreted as "thermometers", measuring the balance between idiosyncratic information (noise temperature) and imitation (coupling) strength. In this context, bubbles are interpreted as low or critical temperature phases, where the imitation strength carries market prices up essentially independently of fundamentals. Contrary to the naive conception of a bubble and a crash as times of disorder, on the contrary, we show that bubbles and crashes are times where the concensus is too strong!"
Fads or Bubbles?, SCHALLER and van NORDEN, 1997
"This paper tests between fads and bubbles using a new empirical strategy (based on switching-regression econometrics) for distinguishing between competing asset-pricing models. By extending the Blanchard and Watson (1982) model, we show how stochastic bubbles can lead to regime-switching in stock market returns. By incorporating statedependent heteroscedasticity into the Cutler, Poterba, and Summers (1991) fads model, we show that it can also lead to regime-switching. Two main features of the bubbles model distinguish it from the fads model. First, the bubbles model implies that returns are drawn from two distinct regimes. Second, the bubbles model implies that deviations from fundamental price will help predict regime switches. Using U.S. data for 1926-89, we find evidence that is consistent with the fads model even when we allow for variation in expected dividend growth rates and expected discount rates. However, the restrictions that the fads model implies for a more general switching model are rejected. The rejections point in the direction of the bubbles model, although not all the implications of the bubbles model are supported by the data."
Rational Finite Bubbles, ALLEN and GORTON, 1991.
"It is shown that a finitely-lived security can trade above its fundamental".
Crashes at Critical Points, Johansen, Ledoit and Sornette, 1998
Running with the devil-the advent of a cynical bubble, Montier, 2003
"Not all bubbles are born equal. To us, the current market environment is largely a greater fool market. Because such markets lack fundamental support, they are liable to precipitous declines. This is exacerbated when everyone seems to be watching the same indicator (earnings optimism). As Keynes noted "when disillusion falls upon an overoptimistic and over-bought market, it should fall with sudden and catastrophic force"."