If market performance is seen poor for longer period of time, again and again market gets crashed, and too volatile, will it make any sense to analyze investors' behavioral biases such kind of market? What do you think?
Yes. It is an especially delicious meal for the speculator.
https://www.investopedia.com/terms/s/speculator.asp
Digestion problems of markets do definitely imply investment behavior biases.
https://books.google.de/books?id=nOKrAgAAQBAJ&pg=PA348&lpg=PA348&dq=stagnant+capital+market+good+for+speculators&source=bl&ots=RFZtDEc3BL&sig=ACfU3U36Zn7wmxj2j7p2Dk8N1hqFFX-fsQ&hl=de&sa=X&ved=2ahUKEwiKq_fJrpLoAhXcQhUIHUjjD1MQ6AEwAHoECAcQAQ#v=onepage&q=stagnant%20capital%20market%20good%20for%20speculators&f=false
(p.347/348 are information rich, concerning your query; chapter17.2 on Tugan-Baranovsky).
Key citation from that source: The foundations of craziness are laid ( p.348); agitation becomes feverish; credit is stretched to ultimate limits.
Yes, and also the conscious biases that underlie the behavioral biases.
Dear Mr. Molla!
May I argue analysing the biases of investors is an essential measure in searching for a tool, to persuade these investors to invest more into the markets:
1) Syed Aliya ZaheraandRohit Bansal (2017). " Do investors exhibit behavioral biases in investment decision making? A systematic review" Qualitative Research in Financial Markets 10(5):00-00, Available at:
Article Do investors exhibit behavioral biases in investment decisio...
2) Melissa Lin (2020). "Why Investors Are Irrational, According to Behavioral Finance" Copyright 2010 - 2020 Toptal, LLC., Available at:
https://www.toptal.com/finance/financial-analysts/investor-psychology-behavioral-biases
3) CFA Institute (2020). "Behavioral Finance and Investment Processes" © 2020 CFA Institute. Available at: https://www.cfainstitute.org/en/membership/professional-development/refresher-readings/2020/behavioral-finance-investment-processes
Yours sincerely, Bulcsu Szekely
If the market is flattish and does not move, whether we use time series or behavioural theories, there is no variation and statistically, it is variation that gives us the result. I will extend the analysis to encompass a longer time period to get the result. Also, not all variables are flattish, there will be some that move in an economy, which I will include in my analysis. This will provide the variation that i need in my analysis. Or change the methodology of analysis.
I would suggest changing the methodology. if it does not change then increase the sample as suggested by Chung. a prolonged flat market could tell a different story
At first, What is your definition of " Poor Performance" for markets, performance meaning High and low index or Efficiency of the market? But I think for new or emerging markets it is normally suffering from behavioral biases.
Dear respected Chung Tin Fah then I want to add to you that variations or fluctuations is acceptable to the investors or researchers in terms of making investment decision or conducting research but to what extent and how long. Suppose a market losses immensely everyday by its index points in a consistent manner and in a sudden it goes up by some points then will it make meaningful results on collected data from investors on behavioral biases form that particular kind of market for the researchers?
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