Beast on Wall Street: How Stock Volatility Devours Our Wealth

by Robert A. Haugen

Book Overview

Shows how price-driven volatility explains many of the mysteries associated with stock price behavior. Covers the excess volatility problem of Shiller; the equity premium puzzle of Mehra and Prescot;... This description may be from another edition of this product.

• Format: Paperback
• Language: English
• ISBN: 0130800783
• ISBN13: 9780130800787
• Release Date: June 1998
• Publisher: Pearson
• Length: 160 Pages
• Weight: 0.48 lbs.
• Dimensions: 0.3" x 6.0" x 9.0"

Customer Reviews

Offers a convincing theoretical framework for market vol

Although it is a bit strange that he has a story in the middle of the book describing a future political scenario in the world of 24/7 markets, Haugen makes a compelling case for the creation of volatility via the market itself, and not exogenous forces. The reviews above seem to be missing the point a bit. You may feel a bit cheated if you expect all academic writing and come across the story. I think that's what happened above.Either way, CURSE THAT BRIGHTON BELLOW!

Haugen's volatility theory answers unanswered questions.

Whether or not Wall Street will give up its current trading practices in favor of instantaneous auctions, this theory answers a lot of questions. The theory explains why stock funds sell at discounts to their underlying securities. The theory suggests why corporate debt ratios have remained as high as they are -- debt isn't actively traded and is thus much less volatile and risky than is equity financing. It may also explain why volatility increases with the length of the trading period. It will also be interesting if the "Asian Crisis" turns out to be a phenomenon that was due as much to volatility magnified by extended, global, securities trading as to inadequate Asian infrastructure and economic policies. Edward B. Flowes, St. John's University

Excellent antidote to an overdose of efficient market theory

This book is an excellent antidote to the overdose of efficient markets theory taught in Finance over the past few years. Haugen combines rigorous academic research,- translated into english (which is in itself a significant accomplishment),- with a satirical look at where the world of efficient markets may yet take us. Every 'Informed Investor'; every 'Wall Street Guru' raised and educated in the era of Efficient Markets; every Investor who has money in Wall Street and is concerned about what all this volatility really means, should read this book. Every finance student should read this book too; but if you bring it to class make sure it's covered in a plain brown wrapper. Finance Professors should read it as well. I know that few will find it as hysterically funny and bitingly accurate as I did, but remember: Efficient Markets is a theory, not a religion, and it's a poor theory that can't bear to be questioned and, if appropriate, modified or turfed out.I'd like to sign my name but cannot. The Efficient Markets Police might find me, and I do not yet have tenure.