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Abstract

Main theory on efficient financial markets assumes that the price of an asset is always related to its fundamental value and any misalignment is driven by noise and so it is unpredictable (Fama, 1965). Literature demonstrates that irrational behaviour characterizes almost all the markets and random price dynamics in the financial market could be used in order to construct profitable investment strategies (i.a. De Long et al., 1990). The current financial crisis shows that market prices do not deviate from a theoretical equilibrium in a random manner and there is a two-way reflexive connection between perception and reality which can give rise to initially self-reinforcing but eventually self-defeating boom-bust processes, or bubbles (Soros, 2008; Carretta et al., 2011).

Keywords

Real Estate Investment Strategy Public Debt Real Estate Market Mortgage Default 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Alessandro Carretta and Gianluca Mattarocci 2013

Authors and Affiliations

  • Alessandro Carretta
  • Gianluca Mattarocci

There are no affiliations available

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