What is an irrational enthusiasm?

irrational enthusiasm is a term that many financiers immediately recognize. These two words used in relation to the DOT.com sector Alan Greenspan had an immediate worldwide effect on investment in this industry during a 1996 dinner. Since then, the term has been associated with the need to carefully monitor the descriptive language, especially when speaking from the position of authority. In themselves, people now use irrational enthusiasm as a description of investors who overestimate markets, against rational meaning, and thus make the risk of loss of investment.

In 1996, Alan Greenspan was chairman of Washington Federal Reserve, a position held in 1987-2006, and his term of office referred to investors to overcome specific markets, especially the DOT.com sector. He and others did not realize that a description that was buried in the middle of speech could have a deep effect. Of course, the speech was broadcast, so it was easily accessible throughout the world. This effect was not just because of the description of Greenspan, but SkuThe fact that it was accuracy, and the bubble dot.com, which occurred a few years later, is often considered to observe Greenspan's observation.

The immediate effect was very noticeable. The day after Greenspan described the investment in this sector as irrational enthusiasm, stock markets dropped by several percentage points around the world. In London, Tokyo, Hong Kong, Frankfurt and the USA, there was a four percentage decrease in investment. While the markets recovered within a few days, all economists learned how easy it was to influence the market in just a few words. Greenspan, however, was justified in its description, as evidenced by the later almost complete collapse of the DOT.com industry.

In addition to the term, which is known as a lesson of the interview with the state of the market, it is now also known that a descriptive investment on a market that is not justifiable. Another example of irrational enthusiasm occurred with investment on TRHU with housing and accompanying financial industries supported them. The investments culminated significantly over what was rationally justified, which led to deep effects when the market collapsed. Many times, when investors speculate without justification, they can create bubbles with an increased investment that eventually burst, with serious consequences.

Irrational enthusiasm is also the name of the book from 2005 Robert J. Shiller, Professor of Economics at Yale University. This sentence remains well known as the catch words that evoke a warning story of the effects of an expert opinion on investing. In addition, it remains a description of speculation without rational assessment.