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.

  • Apple
  • Android
  • Windows Phone
  • Android

To get the free app, enter your mobile phone number.

  • List Price: $27.99
  • Save: $7.31 (26%)
FREE Shipping on orders with at least $25 of books.
Only 5 left in stock (more on the way).
Ships from and sold by Amazon.com. Gift-wrap available.
The Myth of the Rational ... has been added to your Cart
FREE Shipping on orders over $25.
Condition: Used: Good
Comment: Item is in good condition. May include some wear and creases on the cover. Fast shipping. Free delivery confirmation with every order.
Have one to sell? Sell on Amazon
Flip to back Flip to front
Listen Playing... Paused   You're listening to a sample of the Audible audio edition.
Learn more
See all 3 images

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street Hardcover – June 9, 2009

4.0 out of 5 stars 110 customer reviews

See all 16 formats and editions Hide other formats and editions
Price
New from Used from
Kindle
"Please retry"
Hardcover
"Please retry"
$20.68
$4.95 $0.01

Excel2016ForDummiesVideo
Excel 2016 For Dummies Video Training
Discover what Excel can do for you with self-paced video lessons from For Dummies. Learn more.
$20.68 FREE Shipping on orders with at least $25 of books. Only 5 left in stock (more on the way). Ships from and sold by Amazon.com. Gift-wrap available.
click to open popover

Frequently Bought Together

  • The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
  • +
  • When Genius Failed: The Rise and Fall of Long-Term Capital Management
Total price: $30.23
Buy the selected items together

Special Offers and Product Promotions


Editorial Reviews

From Publishers Weekly

Starred Review. At the core of the current financial crisis has been the widely held assumption that markets behave rationally. Fox, Time magazine editor-at-large, isn't the first to bring scrutiny—or censure—to the conceit, but his analysis is singularly compelling, and the rare business history that reads like a thriller. Fox leads us on a chronological journey of modern economic theory, featuring the cast of scholars who constructed the 20th- and 21st-century financial landscape, from Irving Fisher to such post-WWII figures as Milton Friedman, Harry Markowitz, Franco Modigliani and Merton Miller, Jack Treynor and William Sharpe. Fox offers a behind-the-scenes glimpse at academia's finest, complete with amusing anecdotes about the players and their theories, and illustrates how our economic behaviors and markets have been shaped by a gradually refined theory holding that the stock market prices are both random and perfectly rational. A must-read for anyone interested in the markets, our economy or government, this dense but spellbinding work brings modern finance and economics to life. (July)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review

“Do we really need yet another book about the financial crisis? Yes, we do — because this one is different. Fox’s book is not an idle exercise in intellectual history, which makes it a must-read for anyone who wants to understand the mess we’re in.” (Paul Krugman, New York Times Book Review)

“Justin Fox is a truly insightful fellow who can see things with his own eyes—a rare, very rare attribute.” (Nassim Nicholas Taleb, author of The Black Swan)

“A fascinating historical narrative.” (Roger Lowenstein, The Washington Post)

“This wise and witty book is must reading for anyone who wonders what makes financial markets tick. Even those who have wrestled with this question for years will be glad to have read Fox’s compelling history.” (Peter Bernstein, author of Against the Gods: The Remarkable Story of Risk)

“His analysis is singularly compelling, and the rare business history that reads like a thriller... A must-read for anyone interested in the markets, our economy or government, this dense but spellbinding work brings modern finance and economics to life.” (Publishers Weekly (starred review))

“A lucid, lively and learned account.” (Barron's)

“Fox makes business history thrilling.” (St. Louis Post-Dispatch)

“Impressively broad and richly researched.” (Financial Times)

“...a rich history of the world’s most seductive investing idea...the book chronicles the rise of rational market theory over the decades and captures the sizzle and pop of the intellectual debate ...” (Bloomberg)

“Good wonky fun.” (Barry Ritholz, The Big Picture blog)

“An intellectual tour-de-force...” (The Economist)

“Superbly accurate and readable... Clearly the result of many years of research and reading,... it is a model of what the popularization of social science can be, but too rarely is, and it will continue to be read when the current crisis is many years behind us.” (American Scientist)

“A tough, tasty steak of a book.” (Dan Neil, Los Angeles Times)

“A thoughtful, often fascinating, always illuminating history of the idea of market rationality.” (Cory Doctorow, boingboing.net)
NO_CONTENT_IN_FEATURE

The latest book club pick from Oprah
"The Underground Railroad" by Colson Whitehead is a magnificent novel chronicling a young slave's adventures as she makes a desperate bid for freedom in the antebellum South. See more

Product Details

  • Hardcover: 400 pages
  • Publisher: HarperBusiness (June 9, 2009)
  • Language: English
  • ISBN-10: 0060598999
  • ISBN-13: 978-0060598990
  • Product Dimensions: 6 x 1.2 x 9 inches
  • Shipping Weight: 1.2 pounds (View shipping rates and policies)
  • Average Customer Review: 4.0 out of 5 stars  See all reviews (110 customer reviews)
  • Amazon Best Sellers Rank: #578,812 in Books (See Top 100 in Books)

Customer Reviews

Top Customer Reviews

Format: Hardcover Verified Purchase
A few years ago business and economics journalist Justin Fox went to the University of Chicago to talk to Efficient Markets guru Eugene Fama and behavioral economist Richard Thaler. He then went back to New York and wrote an article entitled "Is the Market Rational?" The headline for the article read "No, say the experts. But neither are you---so don't go thinking you can outsmart it." Out of this encounter came this pretty mammoth, extremely informative, and lively written narrative of modern financial economics. If you read this book and take its arguments seriously, you can avoid the major pitfalls that doom some investors to penury. On the other hand, if you think you can beat the market through personal testosterone and shrewdness, don't bother buying the book. Save your money. You'll be on the bread line soon enough.

Saying that people are irrational and the market is irrational is of course now all the rage. But, if you think you can romp your way to financial security by taming your animal spirits and feeding off the market's irrationality, I assure you, and Justin Fox assures you, that such is not the case. "While behaviorists and other critics have poked a lot of holes in the edifice of rational market finance, they haven't been willing to abandon that edifice." (p. 301). The reason is that the edifice is usually correct, although it can experience spectacular failures. The problem is that we don't know when it will experience these failures. We do know, or at least I strongly believe, that the failures are due to herd behavior of investors, which undermines the applicability of the normal statistical distribution, the mainstay of traditional financial theory.

The theory that financial markets are rational is called the Efficient Markets theory. It has two parts.
Read more ›
3 Comments 133 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback.
Sorry, we failed to record your vote. Please try again
Report abuse
Format: Hardcover Verified Purchase
Overall, Fox has written a very good book which covers a remarkable amount of material in only 322 pages. The problem is that this book, if properly done, should run around 600+ pages. Granted, Fox is a journalist, not an academic, so his audience might not have an appetite for a book that takes a month to read, but the topic is interesting and important enough to warrant a more detailed discussion.

Fox's book is organized primarily by ideas and then chronologically. This can lead to jarring jumps between time periods within chapters and the reader suspects that important topics are being missed. The twelve-page epilogue for example begins in 1833 and is in the 1960's by the turn of the page.

The mathematics discussed in the book is not terribly complicated but the reader is given no formulas, no graphs, no applications of the quantitative theories. Yes, everyone knows what normal distribution looks like but the power laws discussed deserve a chart. Mandelbrot's fractal theories need a diagram. Fox would also support his argument more strongly if he included the formulas which were eventually altered by the behavioralists. Without these, the reader is forced to blindly trust what Fox is telling him.

Despite these minor criticisms, the book is definitely worth reading. I am guessing that the title attracts many readers who hope financial-economics moves beyond the Chicago School efficient-markets framework. If this is what readers want, I recommend Beinhocker's "The Origin of Wealth." If you want a quick tour of academic financial thought, read Fox.
1 Comment 105 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback.
Sorry, we failed to record your vote. Please try again
Report abuse
Format: Hardcover Verified Purchase
I was intrigued when my Finance professor assigned The Myth of the Rational Market (TMRM) to our class as a supplement to the textbook. I'm something of a history buff and thought it might make for interesting reading. I was disappointed. The book has a bit of an identity crisis. It's likely a little too light for serious students of the subject, yet a little too technical for entertaining reading. Just as I would get familiar with (and interested in) a subject, Fox would move on to a new person. It became a little frustrating and I don't think I could recommend it to the casual reader. TMRM became the book I made myself read at least a little of each week, and that is unusual.

This isn't to say there weren't entertaining and educational parts. Justin Fox does a nice job in bringing the complex topics of efficient market theory, option-pricing models and CAPMs down to a layman's level. His research is impeccable and he highlights all the major players; Black, Fisher, Friedman, Keynes, Modigliani and Buffett, as well as a large cast of supporting players. Fox does a much better job, in my opinion however, with more "modern" economic figures than with the "founding fathers". His discussion of Mac McQuown's work at Wells Fargo to develop index-based mutual funds helped shed light for me on modern banking methods, and I now understand Michael Milken and the concept of junk bonds much better than before.

In both the "Early Days" section and the "Rise of the Rational Market" section, I felt like I was trying to drink from Niagara Falls with the deluge of names, places and theories. Without some kind of a personal reference to dates and eras, I felt all of the information simply washed over me.
Read more ›
Comment 58 people found this helpful. Was this review helpful to you? Yes No Sending feedback...
Thank you for your feedback.
Sorry, we failed to record your vote. Please try again
Report abuse

Most Recent Customer Reviews

Set up an Amazon Giveaway

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
Amazon Giveaway allows you to run promotional giveaways in order to create buzz, reward your audience, and attract new followers and customers. Learn more about Amazon Giveaway
This item: The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street