Finance Center: Financial Services and Financial Institutions: Value Creation in Theory and Practice 1e

Beast on Wall Street
(order desk copy)			Robert A. Haugen, University of California, Irvine The focus of this text, which is the second in a series of three, is on dispelling the notion that market volatility is "understandable." Haugen also looks at the effect that the constant updating provided by television and other sources has on the market as part of the series' goal to get to the bottom of what the principal drivers are behind stock prices.


	Shows how price-driven volatility explains many of the mysteries associated with stock price behavior, i.e., The excess volatility problem of Shiller. The equity premium puzzle of Mehra and Prescot. Why professionals have a difficult time beating the market. The private information hypothesis of French and Roll. The low power of economic variables in explaining stock returns. The behavior of closed-end investment company discounts. Makes a case for the fact that price-driven volatility is (a) the largest component of stock volatility and (b) that it is unstable. Price-driven volatility creates a permanent drag on economic activity. Moreover, dramatic increases in this component of volatility may result in major disruptions in economic activity. This likely happened in 1930 and may be happening in Asian markets now. Though easy to read, can still be used at the Ph.D. level.
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	PART I: THE SEVEN MYSTERIES OF THE STOCK MARKET 1. Stock Prices Are Too Volatile 2. Stock Volatility is Too Unstable 3. Noise in the Market - Silence on the Street 4. The Silence After the Closing Bell 5. Going Global Extends the Length of Your Trading Day and the Risk of Your Stock 6. The Case of Vanishing Volatility 7. Stocks Selling Cheap - Strange Behavior of Closed-End Investment Companies PART II: NINETEEN-THIRTY Fat Cats. The Eastern Express. Bullets. What's This Truman Loomin'? Premonition of Doom. Tower of Power. Operation Poison Pill. Bad Fellow Bellow. Epilogue. PART III: SOLUTIONS Synthesis. Implications. Final Words.
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	None.
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