At OTC we believe in tailoring our courses to meet each client’s specific requirements.  The illustrative course outline below gives an indication of the type of course content that we’ve been asked to deliver. For more information call us on +44 20 7700 3330 or email info@ockendontraining.com

Strategy & Leadership Finance & Commerce Investment Banking

The economics of the market cycle

What is covered?

The aim of the course is to enhance participants’ knowledge of why markets can experience asset price bubbles followed by severe downturns. The day analyses contrasting views on what drives markets ranging from orthodox economics to the recent development of behavioural finance.  Participants will identify common features of major asset price bubbles, with emphasis on seeking to understand these ideas though the lens of real world examples.

Who will benefit?

Anyone with an interest in the cyclical nature of markets and behavioural finance.  No prior knowledge will be assumed, but a basic understanding of economics would be beneficial.  

Course content

The orthodox theory of markets

• Risk and reward
• What is intrinsic value?
• The theory of rational expectations
• The efficient market hypothesis revisited
• Implications for investment and trading decisions
• Advantages and disadvantages of this framework
• Can stand economic axioms hold up to real world scrutiny?

Introduction to behavioural finance

• The psychology of bias and how it effects decision making
• Framing of analysis and some common mistakes
• Allais paradox and the difficulty of optimising with incomplete information or in built preferences
• Criticisms of behavioural finance

The business cycle and market dynamics

• How the business cycle works and the interrelationship with markets
• Bulls and Bears: a brief overview of the main post war trends in the equity and bond markets
• The impact of the macroeconomic environment on market trends: focus on interest rates and exchange rates
• The importance of liquidity
• The impact of money supply growth and easy credit
• The role of regulators and central banks: what are their powers?

Asset price bubbles

• What is an asset price bubble?
• The stages of a typical bubble: how common are these in different markets
• Cause of asset price bubbles: greater fool theory, excess liquidity theory et al
• The role of market myths which drive excess demand
• Over view of some of the main stock market bubbles: common themes and time frames
• The dot.com bubble: a revisit of the 1920s
• The commodities super cycle
• The credit crunch: origins and impact
• Predicting the future: is it possible to anticipate a bubble