The Misbehavior of Markets

A Fractal View of Financial Turbulence

A groundbreaking mathematician presents a new model for understanding financial markets.

Benoit B. Mandelbrot, one of the century's most influential mathematicians, is world-famous for making mathematical sense of a fact everybody knows but that geometers from Euclid on down had never assimilated: Clouds are not round, mountains are not cones, coastlines are not smooth. To these classic lines we can now add another example: Markets are not the safe bet your broker may claim.

In his first book for a general audience, Mandelbrot, with co-author Richard L. Hudson, shows how the dominant way of thinking about the behavior of markets-a set of mathematical assumptions a century old and still learned by every MBA and financier in the world-simply does not work. As he did for the physical world in his classic The Fractal Geometry of Nature , Mandelbrot here uses fractal geometry to propose a new, more accurate way of describing market behavior. The complex gyrations of IBM's stock price and the dollar-euro exchange rate can now be reduced to straightforward formulae that yield a far better model of how risky they are.

With his fractal tools, Mandelbrot has gotten to the bottom of how financial markets really work, and in doing so, he describes the volatile, dangerous (and strangely beautiful) properties that financial experts have never before accounted for. The result is no less than the foundation for a new science of finance.

One of the best books i’ve ever read on markets

This book should be required reading for anyone interested in investing, markets, or finance. Basic familiarity with options and mathematics is extremely helpful and understanding this book, but it is overall quite approachable.

amazing work

great book for all players in the financial world, esp money managers. unique insight into risks and risk management

Fantastic

Much better than The Black Swan, by a student of Mandelbrot, because Mandelbrot explains fractal geometry instead of trashing the Gaussian for 90% of the chapters then hinting at fractal geometry instead the last three

very fascinating, but hard to apply

definitely got me thinking but not very clear takeaways to apply to trading/investing for the average investor

Enjoyable Story

Mandelbrot tells a good story about how his revolutionary ideas undermine conventional wisdom. More than likely your retirement plans are built on an unstable foundation, based on his ideas. I think he is right, I just don’t know how to take this information and improve my situation.

The audio quality is good except where it isn’t there are a handful of places where they recorded over corrections that were done poorly.

The PDF is poor quality, some pages are illegible. Inexcusable for what I paid for the book.