Mark Schindler is the author of Rumors in Financial Markets: Insights into Behavioral Finance, (Wiley) which provides insights into how rumours evolve, spread, are traded on, and provides explanations as to why volatility rockets ...and amongst others why herding behaviour occurs for apparently no good reason.
He shares his take on and analyses why markets have behaved the way they did over the last few weeks...
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Q1 - So Mark, from your perspective as author, how would you interpret the roller coaster ride global financial markets have been on over the last few weeks?
Q2 - Did you actually see this coming? If it was proverbially "baked into the cake"... what would you say was the tipping point ...or was it a combination of factors/events?
Q3 - Are there certain distinct patterns that evolve before such market mayhem occurs that investors should follow and look out for on their radar screens?
Q4 - How much of this can be/would you attribute to human emotions, and how much to the fact that markets are highly interconnected, highly efficient + the existence of overcrowded trades (esp. high frequency - systematic traders)...etc.
Q5 - Are human beings simply incapable of learning from the past?
Q6 - Thoughts on how best investors should be positioned to capture opportunities in turbulent times and how they could contain downside risk...