The Mis Behavior of 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 assi

  • Title: The (Mis)Behavior of Markets
  • Author: Benoît B. Mandelbrot Richard L. Hudson
  • ISBN: 9780465043552
  • Page: 267
  • Format: Hardcover
  • 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 brBenoit 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, 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.

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      267 Benoît B. Mandelbrot Richard L. Hudson
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    About “Benoît B. Mandelbrot Richard L. Hudson

    1. Benoît B. Mandelbrot Richard L. Hudson says:

      Beno t B Mandelbrot was a French mathematician, best known as the father of fractal geometry He was Sterling Professor of Mathematical Sciences, Emeritus at Yale University IBM Fellow Emeritus at the Thomas J Watson Research Center and Battelle Fellow at the Pacific Northwest National Laboratory He was born in Poland, but his family moved to France when he was a child he was a dual French and American citizen and was educated in France.

    2 thoughts on “The (Mis)Behavior of Markets

    1. I first heard about the efficient market theory in Law School. I remember thinking at the time what obvious bullshit it was. But it was academia, and it was pretty harmless bullshit, so let the economists play whatever games they want. What difference did it make?The theory goes that the markets already consolidate all the information available to them, so that price already incorporates all the information available to the market. From there, we get the random walk theory -- that prices will mo [...]

    2. Benoit Mandelbrot is the inventor of the mathematical concept of fractals. His earlier book The Fractal Geometry of Nature was a truly groundbreaking book about fractals and how they are seen in nature. In The Misbehavior of Markets he turns his attention to the application of fractal concepts to markets. Mandelbrot shows that price fluctuations:1) are not independent from one time period to the next2) appear to be the same, regardless of the time scale involved (hours/days/months/years)3) do no [...]

    3. A very accessible book by the inventor of Fractals, Benoit B. Mandelbrot.Read this book, you will not look at the world the same way again.

    4. This book lays lots of groundwork before it finally gets to the point. I would recommend a reader read the first chapter of part III (10 Heresies of Finance) at the start to give yourself a grounding then read the rest of the book. It might help to know where he's going during part I and part II. All in all, some interesting beginnings of theories and comparisons. There is almost no math involved. But if you're scared of math, this is a great glimpse into fractals and it starts to show glimpses [...]

    5. In these turbulent economy we seem to be victims of the financial markets. Benoit Mandelbrot, famous mathematician and inventor of fractal geometry, joined forces with Richard Hudson, to write a book about financial theory. “The (Mis)behavior of Markets” falls in the popular science genre. It is low on formulas, instead you can find lots of historical anecdotes and opinions.1. Risk, Ruin and RewardWe start with a brief history of finance. The author asks us to play a game. Out of 4 charts we [...]

    6. I read this several years ago, and I enjoyed it very much. I wish I could find my copy, but I loaned it to a former student, and never saw it again.

    7. Like most good books about the markets, Benoît Mandelbrot's The mis Behavior of Markets is not really about trading or making money (although, if it helps you better understand risk, it could save you money--which is essentially the same as making money). In fact, one could almost say the book is about fractal processes, using the markets as a case study. In this way, it is reminiscent of Nassim Nicholas Taleb's Fooled by Randomness, which uses the markets largely as a basis to investigate logi [...]

    8. The (Mis)Behavior of Markets by Mandelbrot and Hudson is a pretty good book about a fascinating topic. Mandelbrot's thesis is that many common beliefs underpinning market modeling software are fundamentally incorrect, and that in using them we are exposing ourselves to massively more risk than we expect. This book was published in 2004.To describe Mandelbrot as prescient in characterizing the inadequacy of market modeling is to understate the situation. Using very little serious math and very fe [...]

    9. The reason for it garnering a 5 star rating is not due to it's literary merit. This is not a novel, but a scientific book written for the layman. I loved it for the way that (when I had finished reading certain chapters) it helped me to visualize nature as an expression of a fractal/chaos set (known as a Mandelbrot set). Whereas before, whenever I went for a walk and looked up into the sky I would just see chaotic assemblies of clouds and leaf growth, now I am seeing some of the haunting images [...]

    10. Financial markets have a very strange property. One would think they were entirely man-made, about as far removed as you could get from the laws that govern nature. Yet if you look closely enough at the kind of share price charts that you might see online or in newspapers - as Mandelbrot certainly has - you might be in for a surprise.A trader will tell you that it can be impossible to tell the difference between a daily, weekly or monthly price chart, if the axis labels are removed. This the ess [...]

    11. Part biographical popular science book consisting of Mandlebrot’s musing on his works and in particular how they relate to market behaviour. Although he is clearly opinionated and sure of his own correctness and insight and convinced of his contraryness, he is not as hectoring or smug as Taleb and also more prepared to admit that as of now he cannot turn his work to a definitive investment method beyond simple (but profound) insights into market behaviour. He stresses simplicity of models and [...]

    12. When I first encountered this book I did a slight doubletake, "wait, THE Benoit Mandelbrot?""Why is he writing about financial markets?" I wondered.I knew of Mandelbrot in mathematics, computer science, and natural sciences -- I had no idea how deep his obsession with economics was till I read this book.In a way, it's almost depressing, his biggest contributions were to fields he didn't seem to care about as much as economics (a field that in turn didn't seem to care about his work).Mandelbrot's [...]

    13. Mandelbrot's novel "The Misbehavior of Markets" is truly a hidden gem. The deeper into the book I went, the more it spoke directly to my darkest intuitions. I actually started to get the feeling that no one else has actually bothered to read the book cover to cover all of his wealth of knowledge felt as if it was almost becoming my little secret. Indeed even the jacket reviews are not very convincing. Paraphrasing the Financial Times "[a famous math guy wrote a book Math!!]" and the Sunday Teleg [...]

    14. This book tells us that standard financial theory is wrong, price changes are not independent of each other, changes are wilder than the theory assumes and changes are not continuous.The book is very interesting in parts, some of the explanations are very lucid, but in parts it is repetitive and some the layman explanations of don't make much sense. Overall I enjoyed the book and learned what's wrong with present theories of finance, but to go beyond that I need to learn the actual math used by [...]

    15. This is probably the most important and insightful book on the stock market that I've ever read. I had no idea the economists base their whole dogma on mathematics that hsa been proven to be wrong. Benoit, as always, looks at the world differently. Thats how he developed fractal geometry and how chaos theory evolved from that. When he took a look at cotton prices over 100 years he immediately realized that the data doesn't fit the current then nor now rules of evaluating risk. He has been writin [...]

    16. Benoit Mandelbrot's The (Mis) Behavior of Markets is a splendid read and very informative. As many reviewers have noted, Mandelbrot invented fractal geometry. He has also been on the cutting edge (some would say fringe, but he's thinking and questioning) in multiple disciplines, as his curiosity seem to know no bounds. Mandelbrot does a good job of describing the inadequacies of the efficient market hypothesis and CAPM and other sacrosanct theories in finance, and he offers for our consideration [...]

    17. This book has three characters in it:-Benoit Mandelbrot, author-The Market, the protagonist/antagonist/chorus as per Greek drama-Benoit Mandelbrot's egoMaybe it's a side effect of some incident as a child but the author has no reservations about promoting himself. Whole paragraphs are devoted to his "enlightened breakthroughs" and profound understanding of market mechanics. An understanding so deep he proposes no significant market model and merely a direction.He stands as the most cited author [...]

    18. I wish I could give this book four stars. But Mandelbrot's slightly tiring writing style prevents me from doing so. The main author obviously thinks remarkably highly of his own work (which is not a bad thing in itself--he is, after all, a revolutionary mathematician--but does he have to express it ad infinitum?), and deems himself an excellent judge of character of historical figures who he has never met. (Disclaimer: It's probably worth noting I have a very low tolerance for self-congratulatio [...]

    19. Mandelbrot is the "father of fractal geometry." He's a mathematician who has spent much of his career looking at prices and markets. He argues pretty forcefully that any of the risk management techniques used by Wall Street are based on false assumptions and have been proven to fail time and again.Mandelbrot is Nassim Taleb's mentor. I've gotten to the point where I wonder if, as a Christian, I can still teach economic orthodoxy (much less finance classes like risk management) with a clear consc [...]

    20. Mandelbrot is one of the fathers of the theory of chaos. It is attractive intellectually but also by its possible applications. In medicine the lung for example is a fractal object. After the crisis of 2008, I wondered why one could not envisage occurred to them.I discovered that the last book of Mandelbrot was precisely devoted to this problem. Mandelbrot proposes to modify the econometric algorythmes used by the banks. Those would be responsible amplify the disorders.It is a difficult work. I [...]

    21. Benoît Mandelbrot is a legend but saying that his theories have been ignored by the finance theorists and modelers just ain't so. A good introduction for those who don't know much about the subject.

    22. A bit disappointing, but probably one of those books that is a victim of its own success. Perhaps when it was originally written, the views were considered more heretical than they are now. I would recommend that a close reader of taleb's anti-fragile and/or the black swan skip this book since taleb's works rehash the main thesis of Misbehavior (down to the self-aggrandizement, almost every time Fama is mentioned, Mandelbrot claims him as his doctoral student, and Mandelbrot spends a fair amount [...]

    23. Mandelbrot is fairly widely known for his eponymous fractal, but as it happens he is also a talented physicist and economist. I wasn’t expecting too much from this book, perhaps the stereotypical arrogant physicist trying to apply some theorem to make money on the markets. But it doesn’t seem that Mandelbrot went out of his way to apply fractals to finance, it’s just that he saw that fractals could explain the largest body of facts with the fewest number of assumptions, which is the genera [...]

    24. In sciences, the modelling of some new phenomenon usually starts from empirical data. First come the observations on how a phenomenon of the nature behaves and then begins the theorizing and fitting to the data.It seems that in the field of quantitative finance the usual logic of science has been reversed. According to Mandelbrot, the mathematical models that had been used for decades to model the markets do not correspond to the reality at all. Instead of small, almost smooth, and uncorrelated [...]

    25. Mandelbrot deserves credit for his contribution to mathematics, and fractal geometry in particular. However, applying the same approach to describe markets is a little bit of a stretch. In the same way that some argue over "psychological barriers" for broad market cap indices (S&P500 etc), Mandelbrot looks a little too hard for patterns that support his thesis.Of course, the practical realities of markets - for example, the naturally occurring volatility from market depth and trade sizing - [...]

    26. This would have earned a 5-stars if Mandelbrot was not so wordy with his stories and parables. While it is fine to have a few tales to help guide the readers metaphorically into more abstract concepts, most of the time it felt like a waste of space and brain-power as it divulges quite a bit from the original idea (which ironically, was supposed to reinforce the original idea). In short, this is a light introduction to the concept of fractal geometry in the financial markets. Mandelbrot is a forw [...]

    27. Although Mandelbrot has a point with regards to some of the issues with modern portfolio theory, this book does not provide the solution.The style of the book is similar to those by Taleb, who considers Mandelbrot his mentor. Like Taleb, Mandelbrot is full of himself and unfortunately the second author is in awe of Mandelbrot. The continued explanations why Mandelbrot is amazing and why he is right and everyone else is wrong get old fast.While Mandelbrot explains that work performed by others is [...]

    28. A very interesting book which content is much in line with the books of Nicholas Taleb ("Black Swan", etc.), that financial models are seriously biased by false assumptions and that we are actually very bad at predicting in finance/economy. Unlike Taleb, Mandelbrot describes the problems in a more scientific and calmer way which makes him much more likeable than the aggressive style of Taleb. I highly recommend this book!

    29. The simplicity with which Mandelbrot explains his concept is sublime. His fractal models encompass some of the "obvious" properties of financial markets which traditional models do not. This book has gotten me more interested in fractal theory.

    30. Excellent book -- candid review of "modern finance" -- sans the equations which can sometimes get in the way of coherent analysis and clear communication.

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