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The Misbehavior

The Misbehavior of Markets

March 11, 2020 By In Books Reviews

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

by BENOIT B. MANDELBROT and RICHARD L. HUDSON

Description

Before engaging in the field of finance, the author Benoit Mandelbrot initially endeavored in researches and academic pursuits relative to the mathematics of space, figures, and natural patterns. Though he is an esteemed figure in the area, he also studies financial landscape and market movements. As this math genius and fractal geometry developer continued to observe shifts and persisting trends present in the financial world, he decided to team up with Richard L. Hudson in magnifying the overall financial landscape through a fractal lens.

This pursuit has led to a successful reassessment and recalibration of conventional tools and frameworks of modern financial theory. In line, it also puts emphasis on one important note that many refuse to acknowledge that financial markets are much riskier and high project levels of a threat compared to how we initially view it. Ranging from topics about currencies, assets, stocks, and trading, the author introduced a newly developed and more precise approach that addresses markets more efficiently than the existing theories. His unique skill of simplifying complex theories and principles made Mandelbrot a popular personality in the field of mathematics. And through this book, he collected and delivered advanced mathematical tools for market participants’ usage. Equipped with Mandelbrot’s mathematical principles, one will never look at markets the same way again. 

About the Authors

Benoit B. Mandelbrot works as a professor of Mathematical Sciences at Yale University and a fellow professor at IBM’s Thomas J. Watson Laboratory. He is the proponent of the popular fractal geometry. His most commendable work, the Mandelbrot set, gained recognition as it continuously reached different mediums, including posters, and albums, and shirts. He managed to gain prestigious awards and honor, including Wolf Prize in Physics. Japan Prize in science and Technology, and multiple recognitions from the United States National Academy of Sciences. 

Richard L. Hudson co-authored the book The Misbehavior of Markets: A Fractal View of Financial Turbulence. He previously worked as Wall Street Journal’s managing editor for six years and Journal editor for two and a half decades. 

Table of Contents

Abstract

Acknowledgments

PART 1- THE OLD WAY

  • Chapter 1- Risk, ruin, Reward
  • Chapter 2- By the Toss of a Coin or the Flight of an Arrow
  • Chapter 3- Bachelier and His Legacy
  • Chapter 4- The House of Modern Finance
  • Chapter 5- The Case Against the Modern Theory of Finance

PART 2- THE NEW WAY

  • Chapter 6- Turbulent Markets: A Preview
  • Chapter 7- Studies in Roughness: A Fractal Primer
  • Chapter 8- The Mystery of Cotton
  • Chapter 9- Long Memory, from the Nile to the Marketplace
  • Chapter 10- Noah, Joseph, and Market Bubbles
  • Chapter 11- The Multifractal Nature of Trading Time

 PART 3- THE WAY AHEAD

  • Chapter 12- Ten Heresies of Finance
  • Chapter 13- In the Lab

Notes 

Bibliography

Index

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