The Last Three Stock Market Crashes. Can Boom and Bust Be Predicted?

Seminar paper from the year 2014 in the subject Business economics - Investment and Finance grade: 15 (20) University of St Andrews (School of Management) course: Corporate Financial Management language: English abstract: Stock market crashes had occurred in the financial market since the very beginning and in every generation (Sornette 2003a). Greed hubris and systemic fluctuations have given us the Tulip Mania the South Sea bubble the land booms in the 1920s and 1980s the U.S. stock market and great crash in 1929 the October 1987 crash to name just a few of the hundreds of ready examples (Sornette 2003a p. 7.). This essay will compare and contrast the last three major stock market crashes in 1987 2000 and 2007. To do this the essay will pay special emphasis on the causes of the three crashes. From there the essay will draw out the similarities and differences and will answer the question if boom and bust can be predicted.