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The Nasdaq Crash of April 2000: Yet Another Example of Log-Periodicity in a Speculative Bubble Ending in a Crash

10 Pages Posted: 9 Jun 2000  

Anders Johansen

Riso National Laboratory - Wind Energy Department; University of Copenhagen, Niels Bohr. Inst.; University of California, Los Angeles (UCLA) - Institute of Geophysics and Planetary Physics

Didier Sornette

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC); Swiss Finance Institute

Abstract

The Nasdaq fell another (approximately) 10% on Friday the 14th of April 2000 signaling the end of a remarkable speculative high-tech bubble starting in spring 1997. The closing of the Nasdaq at 3321 corresponds to a total loss of over 35% since its all-time high of 5133 on the 10th 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, these two speculative bubbles, as well as others, both nicely fit into the quantitative frame-work proposed by the authors in a series of recent papers.

JEL Classification: C44

Suggested Citation

Johansen, Anders and Sornette, Didier, The Nasdaq Crash of April 2000: Yet Another Example of Log-Periodicity in a Speculative Bubble Ending in a Crash. Available at SSRN: https://ssrn.com/abstract=224145 or http://dx.doi.org/10.2139/ssrn.224145

Anders Johansen

Riso National Laboratory - Wind Energy Department ( email )

Frederiksborgvej 399 Build. 118
P.O. 49
DK-4000 Roskilde
Denmark
+45 4677 5004 (Phone)
+45 4677 5083 (Fax)

HOME PAGE: http://www.risoe.dk/vea/staff/andj/

University of Copenhagen, Niels Bohr. Inst. ( email )

Blegdamsvej 17
DK-2100 Copenhagen
Denmark

University of California, Los Angeles (UCLA) - Institute of Geophysics and Planetary Physics ( email )

Box 951567
Los Angeles, CA 90095-1567
United States
(310) 825 0961 (Phone)
(310) 206 3051 (Fax)

Didier Sornette (Contact Author)

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC) ( email )

Scheuchzerstrasse 7
Zurich, ZURICH CH-8092
Switzerland
41446328917 (Phone)
41446321914 (Fax)

HOME PAGE: http://www.er.ethz.ch/

Swiss Finance Institute ( email )

c/o University of Geneve
40, Bd du Pont-d'Arve
1211 Geneva, CH-6900
Switzerland

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