Top 15 Didier Sornette Quotes

The phenomena and underlying mechanisms discussed in this book may thus become even more relevant to a larger and larger portion of human activity. Understand their origin, and be prepared for subtle but significant precursors!

The incentives that people need to work and to find meaning in their lives should be found beyond material wealth and power.

The problem is not that this optimistic view is wrong. By economic accounting, the optimistic view is mostly right.

Faster-than-exponential growth also occurs in computing power, as measured by the evolution of the number of MIPS per $1,000 of computer from 1900 to 1997. Thus the so-called Moore's law is incorrect, since it implies only an exponential growth. This faster than exponential acceleration has been argued to lead to a transition to a new era, around 2030, corresponding to the epoch when we will have the technological means to create superhuman intelligence.

Finally, empirical data suggests that assets are sold much more slowly during retirement years than when they are accumulated during working years.

In order to have a continuing influence, the stock market has to continue rising at an accelerating pace faster than exponential. Only a faster-than-exponential stock market growth makes private investors feel richer.

Indeed, the frequency of crashes in the Monte Carlo simulations was much smaller than the frequency of crashes in the real data: if one of the most frequently used benchmarks of the industry is incapable of reproducing the observed frequency of crashes, this indeed means that there is something to explain that may require new concepts and methods.

By one estimate, 90% of international transactions were accounted for by trade before 1970, and only 10% by capital flows. Today, despite a vast increase in global trade, that ratio has been reversed, with 90% of transactions accounted for by financial flows not directly related to trade in goods and services.

The same basic ingredients are found repeatably: fueled by initially well founded economic fundamentals, investors develop a self-fulfilling enthusiasm by an imitative process or crowd behavior that leads to an unsustainable accelerating overvaluation.

The acceleration of the number of traders buying into the market in the inflating bubble captures the oft-quoted observation that bubbles are times when the "greater fool theory" applies.

The price of a stock is strongly influenced by the behavior of the traders in a nontrivial way.

One trader's move in the market can be interpreted by another trader as relevant additional information due to the uncertainty he faces.

A bubble that goes up is just one that could have crashed but did not.

The assumption of perfectly rational, maximizing behavior won out until recently in the art of modeling, not because it often reflects reality, but because it was useful.

Perhaps the most profound synthesis of physical sciences came from the realization that everything could be understood from "conservation laws" and symmetry principals.