IDEAS home Printed from https://ideas.repec.org/a/eme/qrfmpp/v8y2016i3p205-217.html
   My bibliography  Save this article

Following momentum and avoiding the “Minsky Moment” evidence from investors on the Financial Instability Hypothesis

Author

Listed:
  • Scott Pirie
  • Ronald King To Chan

Abstract

Purpose - This study aims to find out how institutional investors use momentum in making investment decisions, and whether their actions are consistent with the Financial Instability Hypothesis of Hyman Minsky. Design/methodology/approach - The study discusses the findings of interviews with 25 professional investors from the Hong Kong offices of five global financial institutions. All of the participants have several years of practical experience in global and regional markets. Findings - Nearly all the managers interviewed said they use momentum in making investment decisions, and they do this in ways that are consistent with the Financial Instability Hypothesis, in which markets alternate between stable and unstable states. The participants are aware they may contribute to this, but they cannot avoid doing it because of short-term constraints in the present financial system. Originality/value - This study adds to our knowledge of how professional investors use momentum in their investment strategies. It complements findings of quantitative studies that show momentum strategies have been profitable in many market settings. It also adds evidence that supports the Financial Instability Hypothesis.

Suggested Citation

  • Scott Pirie & Ronald King To Chan, 2016. "Following momentum and avoiding the “Minsky Moment” evidence from investors on the Financial Instability Hypothesis," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 8(3), pages 205-217, August.
    • Handle: RePEc:eme:qrfmpp:v:8:y:2016:i:3:p:205-217
    DOI: 10.1108/QRFM-08-2015-0034
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/QRFM-08-2015-0034/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/QRFM-08-2015-0034/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/QRFM-08-2015-0034?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pirie, Scott & Chan, Ronald King To, 2018. "A two-stage study of momentum investing in Asia: A case of cognitive dissonance?," Research in International Business and Finance, Elsevier, vol. 44(C), pages 340-349.
    2. KORKMAZ, Özge, 2017. "Is Minsky’S Instability Hypothesis Acceptable For The Relation Between Borrowing Rate And Profitability?," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 21(1), pages 6-27.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:qrfmpp:v:8:y:2016:i:3:p:205-217. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.