Definition of Fads: Fads are the conjecture that market prices for securities take long swings away from their fundamental values and tend to return to them.

In a time series of data this suggests that "the market price differs from the fundamental price by a highly serially correlated fad.". This formulation attributed to Shiller(1981, 1994), Summers (1986) and Poterba and Summers (1988) by Bollerslev and Hodrick (1992) p. 13. (Econterms)

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