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Robinhoods and the Nasdaq whale: The makings of the 2020 big‐tech bubble
Author(s) -
Tokic Damir
Publication year - 2020
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.22473
Subject(s) - speculation , arbitrage , economic bubble , financial economics , hedge fund , bubble , monetary economics , economics , business , high frequency trading , hedge , stock (firearms) , price discovery , rational expectations , stock market , futures contract , algorithmic trading , finance , econometrics , computer science , mechanical engineering , ecology , paleontology , horse , parallel computing , biology , engineering
This article discusses the big‐tech bubble of 2020, which has all characteristics of the positive‐feedback trading model bubble. The rational speculation activity successfully attracted the positive feedback traders (or the retail army of novice investors), which overpowered the rational arbitrageurs (fundamentally driven hedge funds and market makers) and inflated the stock price valuations well beyond the fundamentals.