Behavioral economics and the cyclically changing situation on the securities markets?

By analogy, the question may be asked how behavioral economics can be used to study investor behavior in capital markets, including securities markets? How is it that in these markets every several or a dozen or so years, there is a high re-evaluation of the valuation of financial instruments, assets, including company shares? What is the issue of the effect of the sheep's rush, which to some extent is often inspired by the appropriately constructed, liberalized offer of products and services of financial institutions? Besides, how does it fit into the issue of the cyclical cyclical nature of economic processes, ie the volatility of economic growth of entire national economies in the long-term perspective? In addition, the issue of the various state intervention instruments applied by national governments is also important, some of which also act on consumer behavior of small investors and shareholders.

In view of the above, I would like to ask you: Behavioral economics and the cyclically changing situation on the securities markets?

Please, answer, comments. I invite you to the discussion

Following answers.

Is the situation on the stock exchange markets really correlated with the macroeconomics of the entire economy?

In the long-term period, this correlation is significant. On the other hand, however, the importance of state intervention implemented through monetary policy pursued by the central banking and through the budgetary policy pursued by the ministerial bodies appointed for this purpose within the state administration is growing. The central banks in many countries, including the Federal Reserve Bank and the European Central Bank after the outbreak of the global financial crisis in the autumn of 2008, have applied particularly significant interventionist monetary policy. I researched this issue and published scientific publications on this topic.

In view of the above, I would like to ask you: Is the situation on the stock exchange markets really correlated with the macroeconomics of the entire economy?

Please, answer, comments. I invite you to the discussion

Will artificial intelligence combined with the analysis of data collected in Big Data database systems be used in automated forecasting of valuations of securities and other assets on capital markets?

In the background of the plot of the film "Transcendence" from 2014, directed by Wally Pfister, the topic of analysis is analyzed by a computerized system combining artificial intelligence with human consciousness loaded into a computerized system of artificial intelligence connected to Internet resources and using the resources on its own.

This independence also means access to various databases, including internal Big Data database databases belonging to certain corporations, including listed companies that are issuers of securities.

The artificial intelligence connected to the Internet, according to a specific strategy, also independently conducts transactions on the market of valuable securities.

In addition, it establishes statrtsets offering innovative technologies, which in a short time become large capital companies characterized by a high capitalization of exchange quotations of shares of these companies listed on stock exchanges.

The above-presented film "Transcendence" presented above picture of integration of artificial intelligence, human consciousness and Internet resources is a picture of typical science fiction.

However, on the other hand, the function of this image is also to inspire to discuss the potential possibilities of integration of the above-mentioned elements into one system of autonomous and working in the Internet resources artificial intelligence, in addition also containing some human feelings.

The above image from the movie "Transcendence" became an inspiration to formulate the following question below.

The mentioned motif from the movie "Transcendence" looks impressive and convincing in this film mainly because it has a full spectrum of innovation.

The use of new, innovative instruments for forecasting specific economic categories usually works until these innovative instruments continue to be innovative, ie until they are disseminated to the majority of participants in specific markets.

In view of the above, I am asking you to answer the following question: Will artificial intelligence combined with the analysis of data collected in the Big Data database systems be used in automated forecasting of valuations of securities and other assets on capital markets?

Please, answer, comments. I invite you to the discussion.

Unethical business practices and insider trading transactions on Stock Exchange

Unethical business practices operate in different countries to varying degrees and participate in economic processes.

For many entities, market participants, business partners and consumers, they generate additional costs.

They can also be a source of gray economy growth, including avoiding paying taxes.

Thus, there are social costs for individual entities and financial for the entire economy.

on the capital markets, one of unethical business practices is, for example, insider trading, ie the use of confidential information by decision-makers with access to confidential information used to conduct transactions to purchase or sell financial instruments, including securities or other securities or other capital markets.

In individual countries, there are various instruments to combat the use of unethical business practices, the shadow economy, etc.

The effectiveness of individual normative solutions, the scale of restrictions applied, and the business mentality of market participants, entrepreneurs and businessmen are different.

Another mentality is related to the level of awareness regarding corporate social responsibility.

In individual countries, social campaigns are carried out suggesting the legitimacy of developing concepts based on corporate social responsibility.

In view of the above, please answer the following question: Is unethical business practices a negative external effect of non-ideal market structures or imperfection of the social market economy?

Please, answer, comments. I invite you to the discussion.

Can current globalization processes increase the systemic risk of global economic and financial crises and the future of a spectacular stock market crash in the future?

Yes. In my opinion, globalization is leading to the Integration of Business Cycles. In this way, globalization may deepen economic crises, including the global financial and debt crisis. An example was the global financial crisis, which appeared in mid-September 2008. At that time bankruptcy was announced by one of the largest investment banks in the world. As a result of unreliable credit risk management procedures, billions of USD of financial losses have been generated. It turned out that the unwritten rule no longer works, that "big can not fall". However, it is the emergence of ever larger international corporations and financial institutions that is one of the main determinants of the processes of economic globalization that have been progressing in recent years. these processes continue. Every few years, as a result of the merger of some of the largest financial institutions through mergers and acquisitions, more and more banks are formed. On the other hand, international operating industrial corporations move their factories from country to country, looking for cheaper workforce, and international trading and service corporations set up subsidiaries and sales outlets in other countries. Capital links grow transnational and thus systemic risk grows, whose sources can be related to the progressing economic globalization.

Please reply. I invite you to the discussion

Can the genesis of global economic crises be combined with technological revolutions?

In addition to many economic and financial sources in the field of unreliable risk management procedures, re-evaluation of assets on capital markets, long-term too low interest rates by central banks, granting loans to entities without creditworthiness, etc., according to non-classical theories, other sources of crises economic.

One of these non-classical theories is combining deep economic crises with technological revolutions, the secondary effect of which is over-investing in technological projects and re-evaluating the assets that these projects relate to.

In view of the above, I am asking you: Can the genesis of global economic crises be combined with technological revolutions?

Please, answer, comments. I invite you to the discussion.

Is the importance of the psychology of financial markets and behavioral economics in the securities markets falling after the global financial crisis?

Are the investors operating in securities markets more cautious in making investment decisions after the global financial crisis, or are they more thoroughly analyzing the investment risk of investing in capital markets?

Has any of you conducted research aimed at identifying possible changes in the significance of the psychology of financial markets and behavioral economics in the capital markets, including securities markets after the global financial crisis of 2008?

If research shows that the importance of the psychology of financial markets and behavioral economics on the capital markets is decreasing, what is it mainly determined?

Is this the result of post-crisis higher awareness of investment risk among investors, or also changes in the structure of dominant segments of investors operating on capital markets, or is it also the result of the increase in the number of transactions conducted by computerized transaction systems?

Please reply. I invite you to the discussion

Дариуш, Вы поставили так много в целом правильных вопросов. Поэтому ограничусь пока темой Искусственного интеллекта:

Нет, искусственный интеллект не поможет. Он является скорее инструментом технического анализа, а поставленные Вами вопросы лежат в области фундаментального анализа рынков. В этой сфере наличие данных всегда будут ограниченными, неполными или нерепрезентативными, что будет снижать эффективность применения технологий на базе искусственного интеллекта.

К сожалению фильм "Превосходство" не смотрел и не могу комментировать то, что в фильме показано.

Dear Prof. Prokopowicz,

We have experimentally i.e. after the Fund-Bank led globalisation and liberalisation regime was ushered in India by the govt. by opening up financial markets and making the rupee convertible studied India's BombayStock Exchange and the new National Stock Exchange which allow for online trading and also the Banking Sector and we have been able to derive a meanfield of stock market price fluctuations and also banking sector price (interest) fluctuations utilising the String Theory toy model of Mathematical Physics and have found that Laws of learning and conservation of information-energy linear momentum in the Einstein Rikki Tensor sense is being obeyed by the data which also gives rise to Shannon Entropy. Therefore this Mathematical String Theory Econophysics and Quantiative Finance test of the Electronic Stock Market Field in spacextime of internetworks is we think a very fundAmental and pathbreaking discovery of our research. This will teach us a lot about the Quantum Field Theory of low dimensional econophysical systems equilibrium including its management-engineering and of other similar cybernetic systems which have both learning as and essential part of their factors as also industry because they are "sustainable" systems. There are other things we have discovered like the Higgs-Mallick Quantum Mechanics of String Theory and the RHMHMINFSC (Internetwork Fine Structure Constant which is the solution to Millenium Prize Yang Mills Mass Gap and existence problem and all the Millenium Prize Maths. problems if we may say so) and draws upon the spectral mechanism of Stellar Redshift in AGN by Sullivan, Kolokythos, Raychaudhury, Vrtilek & Kantharia (2012) and hence our String Econophysics can take various relativistic forms which opens up huge research potentials. Grapevine has it that we may be getting the Nobel Physics Prize in 2019, if all goes well i.e. and uncertainty does not hit us, but we have also derived the Dynamics of String Theory using Stock Market experiments. I hope I have answered your question appropriately.

Soumitra K. Mallick (CA),

for Soumitra K. Mallick, Somak Raychaudhury, Sandipan Mallick,

RHMHM School,

USA, Japan, India

and our respective institutional affiliations.

Dear Friends and Colleagues of RG

In the context of the above issues, the following question is valid: Are stock exchanges still so-called a "barometer" of the macroeconomic condition of contemporary economies?

Is the correlation between the economic situation, the valuation of securities on stock exchange markets and the macroeconomic condition of the national economies and the economic and financial situation of economic entities operating in modern economies still strong? However, does this correlation decrease?

Please reply

Best wishes