Pushing The Herd Off The Cliff Edge - 1755 Words

Introduction The idea of institutional herding has a striking implication for security price volatility. Estimations from the essay ‘Sending the Herd Off the Cliff Edge’suggests that the predominance of herding behavior may explain why the financial system in 1990s had been in crisis for 40 out of the 120 months or 33% of the time (Persaud, 2000). These concerns, along with the increasing stock market ownership of institution investor in comparison to individual investors, is often used as a basis for advocating for an increase in monitoring institutional trading in equity markets in hopes that it that would lead to a reduction in the dominance of institutional investors in the financial market. However such claims are not fully supported by empirical research in the literature. Two schools of thoughts emerge the first being that herding enhances pricing efficiency, and second ascertains that herding initiates short-term trend reversals. The emergence of two seemingly polar opposite beliefs is not as a result of lack of scholarly competence but rather due to the nature of complexity within the subject leading to conflicts in assumptions and methodology. Conflicts in assumptions and methodology often arise due to rational definitional irregularities on institutional herding. An example of such a definitional irregularity occurs when as Avery defined herd behavior asâ€Å"a trade by an informed agent which follows the trend in past trades even though that trend is counter to hisShow MoreRelatedCultural Clash Between Indian And English1447 Words   |  6 Pages they acquired new information about the world they inhabited. A few people — sailors, merchants, and aristocrats — took the risks of exploring beyond the limits of the world known to Europeans. Those risks could be deadly, but sometimes they paid off in new information, new opportunities, and eventually the discovery of a world entirely new to Eur opeans (Roark, The American Promise, page 26).† The new opportunities they were looking for was to practice their own religion, freedom, better pay,Read MoreAn Introduction to Intercultural Communication29172 Words   |  117 Pagessomeone elses shoes you come to see or appreciate their point of view. 3. Involve Involving others in your world and involving yourself in others empowers and educates. Dont build walls between people but learn from one another. 4. Avoid Herd Mentality Herd mentality refers to a closed and one dimensional approach. Such a way of thinking curbs creativity, innovation and advancement as people are restricted in how to think, approach and engage with people or challenges. Cultural competency canRead MoreInvestment and Economic Moats46074 Words   |  185 Pageswhich companies will beat earnings estimates each quarter, but you’ll face quite a lot of competition. You can buy strong stocks with bullish chart patterns or superfast growth, but you’ll run the risk that no buyers will emerge to take the shares off your hands at a higher price. You can buy dirt-cheap stocks with little regard for the quality of the underlying business, but you’ll have to balance the outsize returns in the stocks that bounce back with the losses in those that fade from existenceRead MoreIgbo Dictionary129408 Words   |  518 Pagesthe ship in which he was travelling with his wife was torpedoed off the coast of Ireland and the Archdeacon lost his life, and the MSS., together with his baggage, disappeared. Towards the end of August a fisherman found the box containing the MSS on the shore near Towyn, Wales, where it had been washed up. He found a letter inside with an address, to which he sent the MSS, and in this way they came into the hands of Mrs Dennis. The edge of the paper had been worn by the action of the water, but mostRead MoreMarketing Management130471 Words   |  522 Pagesconsumerism is on the high and the importance of marketing is known to people. An interaction between business and industry in a global perspective has become imperative because of the need to upgrade regional technologies and maintain the competitive edge in the international markets. Today s consumer is more demanding than ye ster-years . He is not content with the second best in technology and is reluctant to pay for a product or a service just because it comes from a particular region or a countryRead MoreLogical Reasoning189930 Words   |  760 Pagesdoesnt overstate his conclusion. He is careful to follow the principle: Dont draw a conclusion until youve gotten enough evidence; he doesn’t rush to judgment. Jones obeys another principle of logical reasoning: Stick to the subject. White goes off on a tangent, talking about alcoholism and whether Mayfield looked the judge and DA in the eye. The comment about the clerk being white is also irrelevant, and probably racist. On the other hand, all of Joness remarks are relevant. There is much