Other Sellers on Amazon
+ $3.99 shipping
+ $3.99 shipping
The Misbehavior of Markets: A Fractal View of Financial Turbulence Paperback – Illustrated, March 7, 2006
|New from||Used from|
Books with Buzz
Discover the latest buzz-worthy books, from mysteries and romance to humor and nonfiction. Explore more
Enter your mobile number or email address below and we'll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer - no Kindle device required.
To get the free app, enter your mobile phone number.
Frequently bought together
“The deepest and most realistic finance book ever published.”
About the Author
His books include Fractals: Form, Chance and Dimension, which was later expanded into the classic The Fractal Geometry of Nature, which has sold more than 200,000 copies. The Misbehavior of Markets is his first book for lay readers on finance, a subject he has studied since the 1960s. He lives in Scarsdale, New York.
Richard L. Hudson was the managing editor of the Wall Street Journal's European edition for six years, and a Journal reporter and editor for twenty-five years. He is a 1978 graduate of Harvard University and a 1991 Knight Fellow of MIT. He lives in Brussels, Belgium.
- Publisher : Basic Books; Annotated edition (March 7, 2006)
- Language: : English
- Paperback : 368 pages
- ISBN-10 : 0465043577
- ISBN-13 : 978-0465043576
- Item Weight : 13.9 ounces
- Dimensions : 6 x 1 x 9.25 inches
- Best Sellers Rank: #29,185 in Books (See Top 100 in Books)
- Customer Reviews:
Top reviews from the United States
There was a problem filtering reviews right now. Please try again later.
"Misbehavior" is more of an introduction to fractal finance than a textbook about how to implement Mandelbrot's ideas into trading systems. Nevertheless, it provides a foundation and introduction to new methods that many may find useful, with enough detail to begin incorporating same into quantitative models. Other works by Mandelbrot go much deeper into the "how to" side of fractal finance.
Benoît (pronounced "ben-wah") Mandelbrot writes in a clear, conversational style. The text avoids mathematical formulas, using instead a combination of written descriptions and entertaining analogies to explain. Chapter notes in an appendix present the mathematical formulas behind his descriptions, along with further (clear, simple) explanations.
The book divides into three parts: The Old Way, The New Way, and The Way Ahead. The first part describes the history leading up to modern finance as still taught in most business schools. It describes contributions by key figures such as Louis Bachelier, Paul Samuelson, William Sharpe, Harry Markowitz, Myron Scholes, and Fischer Black. I found this summary quite interesting, a valuable lesson history. Although we learned MPT (modern portfolio theory) in my MBA finance classes, it's background and potential shortfalls were not addressed.
The second part steps back to examine the nature of markets (turbulent, not Gaussian), identify contradictions between observation and modern theory (extreme events way more common than predicted), and then develop a better, multi-fractal (i.e. scalable) view of finance. Here Mandelbrot excels. Illustrations ("cartoons") help get points across while entertaining analogies (e.g. "Noah, Joseph, and Market Bubbles") and a true story of engineering genius (H.E. Hurst's analysis of Nile River floods) lead to insight into market trends useful to trend-followers.
The third part looks to the future. It summarizes the previous material in "Ten Heresies of Finance" and points the way for future research.
Overall, I loved this book. Obviously, Nassim Nicholas Taleb did too ("...the first book in economics that spoke directly to me.") It contains valuable information for every investor, professional or amateur, experienced or novice. Rather than something for advanced-level traders, I think it is the first book for anyone interested in investing or trading. It will open your eyes like no other, and inject a dose of realism and humility about money and markets that otherwise might cost a lot more than this book's price.
Mandelbrot's descriptions of what really happens will take a little time to process. Some of the ideas are contrary to what we've been told and what gets taught in Econ 101. The bell curve is not the norm, but the exception. Wild fluctuations are the real norm. If the market is well-behaved at one moment, it won't be for long. But within the seeming chaos are some reliable truths if we're willing to look. This is the future. And while it won't spell out a new way to "beat the market" (hate that expression) it might save you from the grief of chasing some holy grails that don't exist but are well advertised.
Also, he writes beautifully. You could read it just for the fun of watching a great mind.
and geography and biologic systems - the application to finance is actually less important, in real life, once you take out games that investment firms might use with Fractal modelling
The book is interesting largely in how science is done and how ideas get across in academia and
to understand M's life and works. For that it is a 5 star book
Not so interesting for someone looking to think about their own portfolio of stocks / bonds / real estate
If you've read "The Black Swan" than the material in this book is not new - and between the two books
I think "The Black Swan" is a more interesting and useful book - I don't think this book will change your individual investment strategy once you learn about "fat tails" - and if you've read Malkiel's book plus maybe "The Black Swan" and Andrew Tobias's book you're done learning what an individual needs to know about investing
My key takeaway from this book is that market participants' tools underassess risk and thus market participants should be wary of becoming model-dependent.
Additionally, supporting research and proofs are in the appendix or on the book's designated website for the more curious readers.
Top reviews from other countries
Meldebrot initially states that technical analysis of prices and ‘charting’ is redundent as the technique is basically useseless (which I agree with) then proceeds to back up all his ideas with charts himself which is exactly the technique he dismisses initially. If your theories and arguments don’t hold in logic, since they need ficticious charts to back them up, do they actually hold in practice?
The financial knowledge is basic and nothing of any actual use really gets discussed.
While I expect most of the typing was done by RL Hudson, there is enough personal history and (at times) unadulterated bitterness to convince me that Mandelbrot played a strong hand in the writing of the book. He is honest about the controversy and mistrust of his pet theories, but also presents strong arguments of how and why they can be applied (wasting no time on modesty).
Overall, I'd recommend this book for outsiders interested in economics theory. Mandelbrot stresses that this is no investment guide and will not make you rich, but it's an enjoyable insight and if you own or would like to own any Mandelbrot set merchandise, this is probably the book for you.
The way Mandelbrot describes fractal modelling it seems a promising basis for all sorts of further research. Very interesting concluding chapter on practical applications of his theory and its derivatives ('In the Lab').
As another reviewer says, this is essentially a 'single point' book, with the point being made repeatedly and in a number of ways. For me, however, that did not detract: the point has sufficient depth to warrant the analysis and exploration undertaken.