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Binding: Hardcover
Dewey Decimal Number: 332.6401
EAN: 9780060598990
Edition: First Edition - First Printing
ISBN: 0060598999
Label: HarperBusiness
Manufacturer: HarperBusiness
Number Of Items: 1
Number Of Pages: 400
Publication Date: June 01, 2009
Publisher: HarperBusiness
Release Date: June 09, 2009
Studio: HarperBusiness
Features:- ISBN13: 9780060598990
- Condition: New
- Notes: BUY WITH CONFIDENCE, Over one million books sold! 98% Positive feedback. Compare our books, prices and service to the competition. 100% Satisfaction Guaranteed
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Editorial Review:
Product Description:
Chronicling the rise and fall of the efficient market theory and the century-long making of the modern financial industry, Justin Fox's The Myth of the Rational Market is as much an intellectual whodunit as a cultural history of the perils and possibilities of risk. The book 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 financial calamity of today. It's a tale that features 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. It's also a tale of Wall Street's evolution, the power of the market to generate wealth and wreak havoc, and free market capitalism's war with itself.
The efficient market hypothesis—long part of academic folklore but codified in the 1960s at the University of Chicago—has evolved into a powerful myth. It has been the maker and loser of fortunes, the driver of trillions of dollars, the inspiration for index funds and vast new derivatives markets, and the guidepost for thousands of careers. The theory holds that the market is always right, and that the decisions of millions of rational investors, all acting on information to outsmart one another, always provide the best judge of a stock's value. That myth is crumbling.
Celebrated journalist and columnist Fox introduces a new wave of economists and scholars who no longer teach that investors are rational or that the markets are always right. Many of them now agree with Yale professor Robert Shiller that the efficient markets theory “represents one of the most remarkable errors in the history of economic thought.” Today the theory has given way to counterintuitive hypotheses about human behavior, psychological models of decision making, and the irrationality of the markets. Investors overreact, underreact, and make irrational decisions based on imperfect data. In his landmark treatment of the history of the world's markets, Fox uncovers the new ideas that may come to drive the market in the century ahead.
Average Rating: 
Rating: -
The first 95% of this book represents one of the best summaries of leading intellectual thought concerning the efficiency (or rationality) of financial markets. My guess is that if you have an interest in the concept of market efficiency, you will enjoy this well-researched summary. Author Justin Fox covers a lot of ground and does a good job at it. However, it's my opinion that for some lay readers, this isn't going to seem like a page-turner.
The list of economists, statisticians, ... Read More
Rating:  -
We are taught that the aphorism 'Know Yourself' was inscribed in the Temple of Apollo at Delphi. Justin Fox would have done well to heed that message, since in many parts of 'The Myth of the Rational Market' he shows that he is quite out of his league.
Consider, for example, Footnote 26 from Chapter 15 (FN26-15), which purports to explain the positive relationship between the value of an option and the variance of the rate of return distribution of the underlying stock. The reason why such ... Read More
Rating:  -
Aside from the mistakes, this is a very nice, light, breezy review of the general concepts of economics and debates about the maths of trading markets. Alas, the author set Keynes on his head and Milton Friedman would be shocked to find that his views had always been mainstream, were he alive.
The author, though hardly alone as demonstrated by the latest banking fiasco, has no understanding of the implications of the Central Limit Theorem which is most often misapplied ("diversify away your ... Read More
Rating:  -
In this fascinating book, Justin Fox, the business and economics columnist for Time magazine, charts the rise and fall of the myth of the efficient market. This notion was mostly American in origin, so Fox tells its story in a few universities, including, crucially, Chicago. Fox shows how life has exploded the idea that the market can rationally process information and allocates resources efficiently to the optimal use.
This is in part a history of those looking for a sure-fire way of ... Read More
Rating: -
Justin Fox has given us a delightful intellectual and economic history of the models which have influenced finance in the last hundred years. The book is very readable and more than informative. I don't know how critical economic historians will be of his detail but it seems a convincing history as the subtitle says of "Risk, Reward and Delusion on Wall Street." The major complaint I have of the book is that it was hard to remember who is who. When the author, for instance, in the closing pages says ... Read More
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