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So a crash is a market being wrong?

• rsynnott 9y ago
  To a large extent, yes, often. See the dot-com bubble, for instance.
• nerfhammer 9y ago
  A crash is a market realizing it had been wrong about something, yes. Or, a "crash" as defined a dramatic plunge rather than a downturn over time is usually some kind of feedback loop where prices falling creates expectations that prices will drop even further and so on, often if the market is mostly driven by greater-fool-theory herd behavior.