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Speculative Behavior in the Stock Markets: Evidence from the United States and Japan

Author

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  • Robert J. Shiller
  • Fumiko Kon-Ya
  • Yoshiro Tsutsui

Abstract

There have been enormous differences of opinion between U.S. and Japanese institutional investors about the outlook for stock prices, differences across the two countries in average one-year-ahead forecasts for the Japanese stock market as great as twenty percentage points. In the past two years most Japanese and U.S. institutional investors have had expectations for a reversal of trends in the stock market, and advised an investing strategy that depended on getting out of (or in to) the market before an anticipated market turnaround. These results, obtained from a number of questionnaire surveys in 1989 and 1990, help explain the relative lack of portfolio diversification across countries and show the short-term nature of speculative behavior.

Suggested Citation

  • Robert J. Shiller & Fumiko Kon-Ya & Yoshiro Tsutsui, 1991. "Speculative Behavior in the Stock Markets: Evidence from the United States and Japan," NBER Working Papers 3613, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3613
    Note: ME
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    Cited by:

    1. Glassman, Debra A. & Riddick, Leigh A., 2001. "What causes home asset bias and how should it be measured?," Journal of Empirical Finance, Elsevier, vol. 8(1), pages 35-54, March.
    2. Sujoy Mukerji & Jean-Marc Tallon, 2001. "Ambiguity Aversion and Incompleteness of Financial Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(4), pages 883-904.
    3. French, Kenneth R & Poterba, James M, 1991. "Investor Diversification and International Equity Markets," American Economic Review, American Economic Association, vol. 81(2), pages 222-226, May.
    4. Stephan Schulmeister, 2000. "Technical Analysis and Exchange Rate Dynamics," WIFO Studies, WIFO, number 25857, February.
    5. Simon van Norden & Huntley Schaller, 2002. "Fads or bubbles?," Empirical Economics, Springer, vol. 27(2), pages 335-362.
    6. Kang, Jun-Koo & Stulz, Rene M., 1997. "Why is there a home bias? An analysis of foreign portfolio equity ownership in Japan," Journal of Financial Economics, Elsevier, vol. 46(1), pages 3-28, October.
    7. Sengupta, Atri & Deb, Soumya Guha & Mittal, Shashank, 2021. "The underlying motivational process behind portfolio diversification choice decisions of individual investors: An experimental design," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    8. Glassman, Debra A. & Riddick, Leigh A., 2006. "Market timing by global fund managers," Journal of International Money and Finance, Elsevier, vol. 25(7), pages 1029-1050, November.

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