Physics – Condensed Matter – Statistical Mechanics
Scientific paper
2000-04-17
European Physical Journal B 17, 319-328 (2000).
Physics
Condensed Matter
Statistical Mechanics
15 pages including 7 figures. Accepted in Eur. Phys. J. The revised version contains significant parametric and non-parametric
Scientific paper
10.1007/s100510070147
The Nasdaq Composite fell another $\approx 10 %$ on Friday the 14'th of April 2000 signaling the end of a remarkable speculative high-tech bubble starting in spring 1997. The closing of the Nasdaq Composite at 3321 corresponds to a total loss of over 35% since its all-time high of 5133 on the 10'th of March 2000. Similarities to the speculative bubble preceding the infamous crash of October 1929 are quite striking: the belief in what was coined a ``New Economy'' both in 1929 and presently made share-prices of companies with three digits price-earning ratios soar. Furthermore, we show that the largest draw downs of the Nasdaq are outliers with a confidence level better than 99% and that these two speculative bubbles, as well as others, both nicely fit into the quantitative framework proposed by the authors in a series of recent papers.
Johansen Anders
Sornette Didier
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