Goodreads helps you keep track of books you want to read.
Start by marking “The Misbehavior of Markets: A Fractal View of Financial Turbulence” as Want to Read:
The Misbehavior of Markets: A Fractal View of Financial Turbulence
Enlarge cover
Rate this book
Clear rating
Open Preview

The Misbehavior of Markets: A Fractal View of Financial Turbulence

4.02  ·  Rating Details ·  2,706 Ratings  ·  122 Reviews
From the inventor/founder of fractal geometry, the award-winning book that turns modern financial theory on its head.
ebook, 353 pages
Published May 14th 2014 by Basic Books (AZ) (first published September 18th 1997)
More Details... edit details

Friend Reviews

To see what your friends thought of this book, please sign up.

Reader Q&A

To ask other readers questions about The Misbehavior of Markets, please sign up.

Be the first to ask a question about The Misbehavior of Markets

This book is not yet featured on Listopia. Add this book to your favorite list »

Community Reviews

(showing 1-30)
filter  |  sort: default (?)  |  Rating Details
Duffy Pratt
Aug 17, 2010 Duffy Pratt rated it really liked it  ·  review of another edition
Shelves: science
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
Aug 10, 2011 David rated it really liked it  ·  review of another edition
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 next
2) appear to be the same, regardless of the time scale involved (hours/days/months/years)
3) do no
Jan 09, 2009 Emily rated it it was ok  ·  review of another edition
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
Ivan Idris
Feb 08, 2012 Ivan Idris rated it it was amazing  ·  review of another edition
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 Reward

We start with a brief history of finance. The author asks us to play a game. Out of 4 charts we nee
Oct 17, 2010 David rated it liked it  ·  review of another edition
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
Oct 31, 2012 Valerie rated it it was amazing  ·  review of another edition
Shelves: math
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.
John Tye
Aug 16, 2011 John Tye rated it really liked it  ·  review of another edition
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 logic ...more
Jimmy Ele
May 30, 2015 Jimmy Ele rated it it was amazing  ·  review of another edition
Shelves: favorites
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 ...more
Gumble's Yard
Apr 01, 2017 Gumble's Yard rated it really liked it  ·  review of another edition
Shelves: 2008
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 id
Aug 18, 2012 Timothy rated it it was amazing  ·  review of another edition
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).

Dec 18, 2010 Bumberings rated it really liked it  ·  review of another edition
Shelves: finance
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 T ...more
Bob Perry
Feb 13, 2013 Bob Perry rated it it was amazing  ·  review of another edition
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
J Scott Shipman
Nov 14, 2011 J Scott Shipman rated it really liked it  ·  review of another edition
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 ...more
Jul 25, 2009 Terry rated it really liked it  ·  review of another edition
This book has three characters in it:
-Benoit Mandelbrot, author
-The Market, the protagonist/antagonist/chorus as per Greek drama
-Benoit Mandelbrot's ego

Maybe 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
Sep 19, 2011 Kate rated it liked it  ·  review of another edition
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 ...more
Justin Tapp

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
Philippe Malzieu
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
Ecoute Sauvage
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.
Yates Buckley
Mar 19, 2017 Yates Buckley rated it it was amazing  ·  review of another edition
Shelves: essential
Everyone should carefully read this text, the significance of Mandelbrot's points remains unfortunately as important as ever and still largely ignored by the average person.
Many aspects which we believe to be true measures or robust facts are actually, under the surface, ruled by distributions that can fluctuate wildly. What does an average price index of a stock mean, if the underlying distribution doesn't really have a mean?
Susana Ordaz
Este libro usa un lenguaje sencillo, fácil de leer y entender. En el mismo, estructura el comportamiento de mercados bursátiles y la manera de cómo se aplican los fractales. Toca temas históricos, económicos, series de precios, paridades monetarias, cotizaciones de bolsa en largo plazo.
Explica y cuestiona las teorías desarrolladas desde Bachellier hasta Basilea II, pasando por Markovitz, Fama y muchos otros.
Aug 20, 2014 Chanania rated it really liked it  ·  review of another edition
In a line: Very informative but unnecessarily repetitive.

The following quote by Laurence J. Peter (slightly modified to better reflect reality) is one of my favourites:
An economist is an expert who can tell you tomorrow why the things he predicted yesterday didn't happen today.

There are many people who will dismiss such an observation out of hand. "Economists are experts", they say. "Look at the successes of the banks, brokerage firms, investment management companies, etc." When you ask them to
Viktor Nilsson
This book examines what ways there are to project financial risk (in the form of asset-price changes) that reflects reality better than the so-called normal distribution (used in Black-Scholes, VAR, and many other models). The book follows a few parallel tracks:
-Mandelbrot's personal story
-The history of math and probabilities as it relates to projecting price movements
-The development of Mandelbrot's own mathematical models
-Bashing of everything and everyone

The first 3 tracks I all appreciated
Aug 25, 2013 Vandita rated it it was amazing  ·  review of another edition
Shelves: finance-business
What is Mandelbrot, THE mathematician who brought 'fractal geometry' in the lexicon of maths, is doing 'dabbling' in explaining financial markets - well, he is beating all the so called financial markets theorists and experts hands down! This book is a beautiful mix of tracing evolution of financial markets theory over the centuries, using the fractal geometry ( without a SINGLE mathematical equation in sight!), and then going on to demolish the efficient market hypothesis, CAPM and the concept ...more
Benjamin Scharf
Sep 18, 2015 Benjamin Scharf rated it really liked it  ·  review of another edition
Shelves: read-again
Ein typischer Mandelbrot: Ausgehend vom Gebiet der Fraktale klärt uns Mandelbrot hier darüber auf, was aus seiner Sicht in der Finanzwelt schief lief (das Buch hat seine Ursprünge in den 70igern) und bis heute schief läuft.

Als Mathematiker (ich bin auch einer) ist es natürlich lustig und einfach, sich über Wirtschaftsmathematiker und BWLer mit ihren einfachen, wenig korrekten Modellen lustig zu machen. Der heilige Gral der Normalverteilung, der der gesamten Finanzmathematik zu Grunde lag/liegt,
Andrew Canfield
What a fascinating read. Mandelbrot is clearly an expert in his field of fractal and multifractal math, and the way he relays this in a readable fashion in superb. The manner in which he applies it to modern finance and stock market moves is intriguing, although I would have to do more research and reading prior to reaching any firm conclusions on his theories.

Mandelbrot essentially tells his readers that the stock market is even more volatile than people realize, and that the advent of faster
Alessandro Veneri
Jul 01, 2016 Alessandro Veneri rated it really liked it  ·  review of another edition
My little, humble research for the role of randomness in financial markets has just begun, thanks to Taleb's works. I found much of his most general assertions are grounded in fat-tail distributions, long-term dependences and high markets' turbulence, as shown by Mandelbrot in the book.
Mandelbrot does not propose his fascinating multi-fractal theory as a money-machine, nor does he hide the need to research much deeply, as his approach to financial theory has just been established.
The meat of the
Benoit Mandelbrot is a Polish Mathematician more commonly known as the father of Fractal Geometry, an eccentric branch of science that deals with the identification of patterns in everyday lives.

In the (Mis)behavoir of Markets, Mandelbrot attempts to apply theories of fractals onto economic phenomenon like the ups and downs of the stock market. If you look closely, he argues, the charts of stocks and indices is very much a continuous fractal and has bearings that can predicted by the diligent ob
Bhashit Parikh
Sep 07, 2015 Bhashit Parikh rated it really liked it  ·  review of another edition
Shelves: pop-science
Maybe 3.5 stars.

I stumbled upon this book after reading The Black Swan. Like me, if you don't know much about fractals, this could be a good introduction: straight from the horse's mouth.

However, while reading the book, I kept getting a feeling that in order the text make more accessible to the lay person, it seems to have lost some edge. The author does try to make up for it by providing some more technical stuff at the end of the book as chapter notes though.

Being an amateur interested in fin
Assaf Lavie
Jan 28, 2016 Assaf Lavie rated it really liked it  ·  review of another edition
I really liked this book, and I feel I may read it again.
It's very much like Black Swan, in ways, though it's obviously a precursor. I'd say it's Black Swan without the profanity and vanity. :)
The first half is illuminating. It discusses how exactly modern finance theory is based on flawed assumptions of the market, and how, as a result, risk assessment - the kind done by banks and brokers - is nonsense. He then explains how his sort of math (power laws, fractals, etc.) present a much better mo
Jan 18, 2014 Jeffrey rated it it was amazing  ·  review of another edition
An extremely interesting account of finance from Mandelbrot who has a non-scientific background.

The book is divided into 3 sections. First, Mandelbrot gives an account of financial theory and outlines its flaws. Second, he provides his own insights. These were interesting in that I think they gave a more numerically analytic explanation to fat tails, namely he provides a mathematical model that explains fat tails (which have been pointed out by others such as Taleb, who provide a more psychologi
« previous 1 3 4 5 6 7 8 9 next »
There are no discussion topics on this book yet. Be the first to start one »
  • A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation
  • Devil Take the Hindmost: A History of Financial Speculation
  • Manias, Panics, and Crashes: A History of Financial Crises
  • Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
  • Irrational Exuberance
  • The Aggressive Conservative Investor
  • My Life as a Quant: Reflections on Physics and Finance
  • Why Stock Markets Crash: Critical Events in Complex Financial Systems
  • Inside the House of Money: Top Hedge Fund Traders on Profiting in a Global Market
  • The Myth of the Rational Market: Wall Street's Impossible Quest for Predictable Markets
  • Against the Gods: The Remarkable Story of Risk
  • Hedge Fund Market Wizards
  • Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports
  • More Than You Know: Finding Financial Wisdom in Unconventional Places
  • Contrarian Investment Strategies: The Classic Edition
  • Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment
  • Endgame: The End of the Debt Supercycle and How It Changes Everything
  • Options as a Strategic Investment
Benoît 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 a ...more
More about Benoît B. Mandelbrot...

Share This Book

“For a complex natural shape, dimension is relative. It varies with the observer. The same object can have more than one dimension, depending on how you measure it and what you want to do with it. And dimension need not be a whole number; it can be fractional. Now an ancient concept, dimension, becomes thoroughly modern.” 1 likes
“In the 1960's, some old-timers on Wall Street-the men who remembered the trauma of the 1929 Crash and the Great Depression-gave me a warning: "When we fade from this business, something will be lost. That is the memory of 1929." Because of that personal recollection, they said, they acted with more caution, than they otherwise might. Collectively, their generation provided an in-built brake on the wildest form of speculation, an insurance policy against financial excess and consequent catastrophe. Their memories provided a practical form of long-term dependence in the financial markets. Is it any wonder that in 1987 when most of those men were gone and their wisdom forgotten, the market encountered its first crash in nearly sixty years? Or that, two decades later, we would see the biggest bull market, and the worst bear market, in generations? Yet standard financial theory holds that, in modeling markets, all that matters is today's news and the expectations of tomorrow's news.” 0 likes
More quotes…