The Alibaba Trade

A company known as Alibaba will IPO in the USA this Friday.  Trading Alibaba will be risky for a variety of reasons.  My guess is that even at a high valuation, there might be mania and the price will go up.  However, rather than guessing there might be a more “arbitrage-like” trade.  This is a copy of a letter I wrote to several friends of mine on May 9, 2014.   Some of it may apply...
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Flash Crashes and Market Design

  In my book, The Crisis of Crowding, I spoke about the crowding of market makers in the Flash Crash and the sudden disappearance of market liquidity.  This led to people buying Apple stock (Ticker:  AAPL) for $100,000 per share and selling Accenture (Ticker:  ACN) for 1 cent.  Many other trades occurred at ridiculous prices.  Since the writing of the book, there have been several other...
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Should you put your money in real estate?

The real estate market has picked up this year and in some cities, like San Francisco, there is a shortage of inventory and lots of people making frenzied bids on property.  This has led to higher home prices in most cities in 2012 and that trend has continued in 2013 (see Table 1). Many people are asking two questions.  First, should I go buy a house now?  Second, if I don’t want to...
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Dazzling Guest Speakers in Finance and Business at University of San Francisco in April

In April, the School of Management of the University of San Francisco will host three great speakers in finance and business.  If you are in the San Francisco community and would like to attend, please contact Margot Frey (mafrey@usfca.edu – 415-422-2084) or Andrew Heitman (aheitman@usfca.edu).  1.  April 16, 2013 5:30–7:00 p.m. Room 516 Agora Common Area Jeremy Howard CEO &...
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An Indicator of Bubbles in the Housing Market

The housing bubble of 2008 was created by a crowd rushing into the housing market.  Some have argued that there was no way to determine whether there was a bubble in housing, yet in the Crisis of Crowding, a few simple measures are shown that help indicate that the housing market had become relatively very expensive by 2007. The measure is very simple.  It considers mortgage rates, housing...
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A New Book Review on the Crisis of Crowding

http://www.cfala.org/i4a/pages/index.cfm?pageID=4052#Crisis
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