TY  - JOUR
AU  - Cochrane,John H.
TI  - Stocks as Money: Convenience Yield and the Tech-Stock Bubble
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8987
PY  - 2002
Y2  - June 2002
UR  - http://www.nber.org/papers/w8987
L1  - http://www.nber.org/papers/w8987.pdf
N1  - Author contact info:
John H. Cochrane
Booth School of Business
University of Chicago
5807 S. Woodlawn
Chicago, IL  60637
Tel: 773/702-3059
Fax: 773/702-0458
E-Mail: john.cochrane@chicagobooth.edu
AB  - What caused the rise and fall of tech stocks?  I  argue that a mechanism much like the transactions demand for money drove many stock prices above the 'fundamental value' they would have had in a frictionless market. I start with the Palm/3Com microcosm and then look at tech stocks in general. High prices are associated with high volume, high volatility, low supply of shares, wide dispersion of opinion, and restrictions on long-term short selling. I review competing theories, and only the convenience yield view makes all these connections.
ER  -