A speculative stock market is a bubble, according to economist James O’Connor.
The concept originated with stock market speculators, but the phrase is now used to describe the market’s general volatility.
O’Brien told Business Insider that “trading in stocks is a big, big bubble”.
“When a market goes down, the market speculator who is the greatest asset in the market goes out of business, because they’ve invested a huge amount of money in the stocks,” he said.
“It’s a bubble.
It’s not a stock market.”
O’Connor says that speculators can put up their own money in their own accounts to buy stocks.
“If you think about it, they are in a bubble,” he told Business Week.
“When you have a bubble you are not in a position to speculate in the stock market.
It just makes sense that you would be the one that ends up taking the losses.”
A speculative market O’Connors’ research is backed up by data from the SEC and the UK Financial Conduct Authority.
In 2016, the SEC found that speculative trading was a problem in the US stock market at the time, with the number of people trading in such an account rising from just under 1,000 to 1,600.
The report also showed that the number in that group grew at an annualised rate of more than 3 per cent.
“What we’ve found in the UK and the US is that if you go into a speculative market, it’s a very, very big bubble,” O’Connell said.
And, the study added, speculators “are able to make a profit on that, they get to the point where they can take out their own shares, or they can buy a company.”
Oconnor said the number and volatility of speculative trading could have a major impact on the market.
“The market is volatile.
If you think back to what happened in 2008, the big crash happened at the end of 2008,” he explained.
“That crash was due to the fact that it was a bubble that was being built up, and we were at the stage that was going to cause the biggest crash in our history.”
When the bubble bursts O’Leary, who has been dubbed the “unicorn” by some of his followers, says he is “not sure how long it will last”.
He says he would love to see the market crash and his “prudent investors” come out ahead.
“My prudent investors would take that money and use it to invest in stocks,” Oconney said.
The SEC’s investigation into the financial crisis has been ongoing since the summer of 2017, but O’CONNOR has been able to gather more data to show the effect of speculators on the stockmarket.
“I would like to see all the stocks in the world go up, not just the ones that have been doing well,” he added.
“We should be focusing on the ones with the most promise.”
The SEC is currently investigating the trading practices of hedge fund manager Carl Icahn, who also runs the American Energy Alliance, which is the largest investor in the S&P 500 index.
Oconnays research, however, shows that Icahn’s activities do not have a significant impact on stock markets.
“All I can tell you is that Icann is a hedge fund,” Ollie said.
“[He] is a speculative investor.
He’s got a lot of money invested in stock exchanges.
That’s not what the market is all about.”