https://doi.org/10.1007/s100510070147
The Nasdaq crash of April 2000: Yet another example of log-periodicity in a speculative bubble ending in a crash
1
Institute of Geophysics and
Planetary Physics, 3845 Slichter Hall, Box 951567, University of California, Los Angeles, California 90095-1567, USA
2
Department of Earth and Space Science, University of California, Los Angeles, California 90095, USA
3
Laboratoire de Physique de la Matière CondenséeCNRS-UMR 6622
and
Université de Nice-Sophia Antipolis, BP 71, Parc
Valrose, 06108 Nice Cedex 2, France
Received:
3
May
2000
Published online: 15 September 2000
The Nasdaq Composite fell another 
% on Friday the
14'th of April
2000 signaling the end of a remarkable speculative high-tech bubble
starting in
spring 1997. The closing of the Nasdaq Composite at 3321 corresponds to a
total loss of
over 35% since its all-time high of 5133 on the 10'th of March 2000.
Similarities to the speculative bubble preceding the infamous crash of
October 1929 are quite striking: the belief in what was coined a "New
Economy"
both in 1929 and presently made share-prices of companies with three digits
price-earning ratios soar. Furthermore, we show that the largest draw downs
of the Nasdaq are outliers with a confidence level better than 99% and that
these two speculative bubbles,
as well as others, both nicely fit into the quantitative framework proposed
by the authors in a series of recent papers.
PACS: 01.75.+m – Science and society / 02.50.-r – Probability theory, stochastic processes, and statistics / 89.90.+n – Other topics of general interest to physicists
© EDP Sciences, Società Italiana di Fisica, Springer-Verlag, 2000
