TIME editor-at-large and economics columnist Justin Fox describes the rise and fall of the world's most influential investing idea-the efficient markets theory-and its replacement with behavioral economics in a lively history of ideas.
Justin Fox's compelling narrative describes the rise and fall of the efficient market investing theory and the century-long making of the modern financial industry. He brings to life the people and ideas that forged modern finance and investing, from the formative days of Wall Street through the Great Depression and into the 21st century. It's a tale featuring professors who made and lost fortunes, battled fiercely over ideas, beat the house in blackjack, wrote bestselling books, and played major roles on the world stage. For anyone who wants to know how and why the experts make investment decisions, THE MYTH OF THE RATIONAL MARKET is an essential companion, a fascinating tour of the ideas behind the evolution and mystique of Wall Street.
The efficient market hypothesis-first debated in the 1930s and then developed by University of Chicago economists and popularized by a string of bestselling books-has been the maker and loser of fortunes, the driver of trillions of dollars, the inspiration for index funds, the guidepost for thousands of careers. The theory holds that the market is always right, that the decisions of millions of rational investors, all digging for information and trying to outsmart one another, will always provide the best judge of a stock's value.
Fox introduces the new wave of economists and scholars who no longer teach that investors are rational or that the markets are always right. Most would agree with Yaleprofessor Robert Shiller's view that efficient markets theory "represents one of the most remarkable errors in the history of economic thought." They've replaced efficient markets theory with behavioral economics, and among them are several winners of the Nobel Prize. The behaviorists tap pychological models of human behavior and their implications for investment decisions. They find that investors overreact, underreact, make irrational decisions on imperfect data. Through interviews with virtually every major thinker of modern finance, including ten Nobel laureates, Fox unveils the secrets and shortfalls of the investment ideas now driving the market in the 21st century.
THE MYTH OF THE RATIONAL MARKET will join Bernstein's Against the Gods, and Chancellor's Take the Hindmost, and Lowenstein's When Genius Failed as a landmark treatment of the history of American markets. As with James Gleick or Simon Winchester, Fox creates fascinating portrayals of the driven and brilliant thinkers who have created the world as we know it.
TIME editor-at-large and economics columnist Justin Fox describes the rise and fall of the world's most influential investing idea-the efficient markets theory-and its replacement with behavioral economics in a lively history of ideas.
Justin Fox's compelling narrative describes the rise and fall of the efficient market investing theory and the century-long making of the modern financial industry. He brings to life the people and ideas that forged modern finance and investing, from the formative days of Wall Street through the Great Depression and into the 21st century. It's a tale featuring professors who made and lost fortunes, battled fiercely over ideas, beat the house in blackjack, wrote bestselling books, and played major roles on the world stage. For anyone who wants to know how and why the experts make investment decisions, THE MYTH OF THE RATIONAL MARKET is an essential companion, a fascinating tour of the ideas behind the evolution and mystique of Wall Street.
The efficient market hypothesis-first debated in the 1930s and then developed by University of Chicago economists and popularized by a string of bestselling books-has been the maker and loser of fortunes, the driver of trillions of dollars, the inspiration for index funds, the guidepost for thousands of careers. The theory holds that the market is always right, that the decisions of millions of rational investors, all digging for information and trying to outsmart one another, will always provide the best judge of a stock's value.
Fox introduces the new wave of economists and scholars who no longer teach that investors are rational or that the markets are always right. Most would agree with Yaleprofessor Robert Shiller's view that efficient markets theory "represents one of the most remarkable errors in the history of economic thought." They've replaced efficient markets theory with behavioral economics, and among them are several winners of the Nobel Prize. The behaviorists tap pychological models of human behavior and their implications for investment decisions. They find that investors overreact, underreact, make irrational decisions on imperfect data. Through interviews with virtually every major thinker of modern finance, including ten Nobel laureates, Fox unveils the secrets and shortfalls of the investment ideas now driving the market in the 21st century.
THE MYTH OF THE RATIONAL MARKET will join Bernstein's Against the Gods, and Chancellor's Take the Hindmost, and Lowenstein's When Genius Failed as a landmark treatment of the history of American markets. As with James Gleick or Simon Winchester, Fox creates fascinating portrayals of the driven and brilliant thinkers who have created the world as we know it.
The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
400
The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
400Related collections and offers
Product Details
| ISBN-13: | 9780857193698 |
|---|---|
| Publisher: | Harriman House Publishing |
| Publication date: | 11/01/2013 |
| Pages: | 400 |
| Product dimensions: | 6.10(w) x 9.10(h) x 1.10(d) |