Market crashes are inevitable from "summary" of Why Stock Markets Crash by Didier Sornette
Market crashes are inevitable. This might sound like a bold statement, but history has shown us time and time again that this is indeed the case. The notion that markets are efficient and can accurately reflect all available information is flawed. Instead, markets are complex systems that are prone to sudden, unpredictable movements. In my research, I have found that market crashes are not random events, but rather the result of specific processes that occur within the system. These processes can be understood and modeled using concepts from the field of critical phenomena. Just like a sandpile that grows grain by grain until it reaches a critical point and collapses, financial markets can accumulate imbalances until they reach a tipping point and crash. One of the key factors that contribute t...
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