The discussion topic for the first assessment is Sir Isaac Newton's quote: "I can calculate the motion of heavenly bodies, but not the madness of people." This quote was his response to the collapse of South Sea Bubble in 1720, in which he lost 20,000 (equivalent to approximately 5milion in 2022). His remarks suggest that investors be irrational during the bubble period when they are more likely to follow each other ('herding'). But over the time, a few months to possibly many years, the psychology factors are subtracted out and stock prices come to reflect the value of the company in relation to economic fundamentals.

1. what is your personal views as to the stock market bubble?

Specifically, your views should be developed based on a short history of stock markets, including the unfolding of bubble-crisis ('boom-bust') cycle in the recent time.

 2. What about the experience the investors' experience and behaviour prior to, during and post a bubble?

select a bubble period in the past three decades to demonstrate your viewpoints.

Answer rating: 100% (QA)

Stock Market Bubbles A Dance Between Rationality and Herd Mentality Sir Isaac Newtons quote captures the essence of stock market bubbles a phenomenon ... View the full answer