The Misbehavior of Markets

The Misbehavior of Markets

Review The Misbehavior of Markets: A Fractal View of Financial Turbulence



Benoit Mandelbrot, a man who is known as a mathematical genius and inventor of fractal geometry, shares to his readers what he has been researching on for more than two decades in his book “The (Mis)behavior of Markets.” Teamed up with Wall Street Journal editor, Richard L. Hudson, the duo overlaid fractal geometry atop the inner workings marked in the financial markets – resulting in an eye-opening and powerful perspective and patterns that may re-invent the tools and systems that modern markets use. One of the key takeaways from the “(Mis)behavior of Markets” is how market models keep changing and evolving over the years. It must be important for market investors and participants not to be excessively dependent on just a model.

About the Author

Benoit B. Mandelbrot is Sterling Professor of Mathematical Sciences at Yale University and a Fellow Emeritus at IBM’s Thomas J. Watson Laboratory. He is the inventor of fractal geometry, whose most famous example, the Mandelbrot Set, has been replicated on millions of posters, T-shirts, and record albums. He was a leading figure in James Gleick’s Chaos and has received the Wolf Prize in Physics, the Japan Prize in science and technology, and awards from the U.S. National Academy of Sciences, the IEEE, and numerous universities in the U.S. and abroad. 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. This 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.

Table of Contents

  • Abstract
  • Acknowledgements
    • Part I – The Old Way
      • Chapter I – Risk, Ruin, and Reward
      • Chapter II – By the Toss of a Coin or Flight of an Arrow?
      • Chapter III – Bachelier and His Legacy
      • Chapter IV – The House of Modern Finance
      • Chapter V – The Case Against the Modern Theory of Finance
    • Part II – The New Way
      • Chapter VI – Turbulent Markets: A Preview
      • Chapter VII – Studies in Roughness
        • Pictorial Essay: A Fractal Gallery
      • Chapter VIII – The Mystery of Cotton
      • Chapter IX – Long Memory, from the Nile to the Marketplace
      • Chapter X – Noah, Joseph, and Market Bubbles
      • Chapter XI – The Multifractal Nature of Trading Time
    • Part III – The Way Ahead
      • Chapter XII – Ten Heresies of Finance
      • Chapter XIII – In the Lab
  • Notes
  • Bibliography
  • Index