|Definition||A high volume price decline in a market characterized by seller panic that may suddenly occur after a long period of decline.|
|Related Concepts||InvestingGreed And FearEconomic Problems|
top » economics » investment » capitulation
What is Capitulation?
John Spacey, July 02, 2016
Capitulation is a term for irrational panic selling that may occur towards the end of collapse in market prices. Most market declines may be orderly. Capitualation is associated with chaotic declines that end with investors completely abandoning a company, industry or market at any price. Some investors will look for signs of captitulation in a distressed asset or security before buying into a decline. Capitualation is characterized by a sharp fall in price, high volume and the popular view that an investment has become completely hopeless. In many cases, prices will sharply rebound after a capitulation as a result of low prices driven by an irrational level of fear. Generally speaking, capitulation is difficult to identity but becomes clear in retrospect.
ThinkingThis is the complete list of articles we have written about thinking.
If you enjoyed this page, please consider bookmarking Simplicable.
Alpha vs Beta
The difference between two common investment measurements.
Regression Toward The Mean
An overview of Regression Toward The Mean.
Efficient Market HypothesisAn overview of the Efficient Market Hypothesis.
An overview of animal spirits, a theory of investing.
Financial MarketsA definition of financial market with examples.
A definition of Mr. Market, an investing theory.
A definition of organic growth with examples.
The common types of concept company.
Information CostsA definition of information costs with examples.
The definition of channel check with examples.
Economic TheoriesA list of economic theories that are particularly useful for business.
The tendency for people at high risk to buy insurance.
A list of economic positions or capabilities that allow you to outperform in a particular industry.
Knowledge WorkA definition of knowledge work with examples.
ProductionA definition of production with examples.
An overview of post-scarcity.
Economic InfrastructureThe common types of economic infrastructure.
The common types of business competition.
InefficiencyThe common types of inefficiency.
An overview of supply with common examples.
TrendingThe most popular articles on Simplicable in the past day.
New ArticlesRecent posts or updates on Simplicable. Site Map
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.