Ron's Reviews > The (Mis)Behavior of Markets

The (Mis)Behavior of Markets by Benoît B. Mandelbrot
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's review
Jul 06, 2010

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bookshelves: finance
Read in July, 2010

I ran across a reference to this book on Motley Fool's METAR board a while back. Some of you may recognize the author's name. He is the guy who invented fractels.

The primary thing I learned from this book is that market price changes do not follow the familiar bell curve. Most if not all financial institutions assume the bell curve. Unfortunately the real curves fat tails. Consequently, large price changes happen a lot more often than predicted by bell curves. This means that most financial instutions lull you into a false sense of security.

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message 1: by Gregg (new)

Gregg Got me thinking!!!

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