Justin Fox

The Myth of the Rational Market (eBook, ePUB)

A History of Risk, Reward, and Delusion on Wall Street

• Format: ePub

Produktbeschreibung

A New York Times Bestseller and Notable Book: "A rich history of the world's most seductive investing idea." -Bloomberg A Library Journal Best Business Book of the Year A lively history of ideas, The Myth of the Rational Marketby former Timemagazine economics columnist Justin Fox describes with insight and wit the rise and fall of the world's most influential investing idea: the efficient markets theory. Longlisted for the Financial TimesBusiness Book of the Year Award, The Myth of the Rational Marketcarries readers from the earliest days of Wall Street to the global financial crisis and Great Recession, debunking the long-held myth that the stock market is always right in the process while intelligently exploring the replacement theory of behavioral economics. "A fascinating historical narrative, beginning with economist Irving Fisher's paean to markets in, alas, 1929." -Roger Lowenstein, The Washington Post "Brilliantly tells the story of how [the finance industry's] edifice was built-and why so few were willing to acknowledge that it was a house built on sand." -Paul Krugman, The New York Times Book Review "His analysis is singularly compelling and the rare business history that reads like a thriller... A must-read for anyone interested in the markets, our economy or government." - Publishers Weekly (starred review) "A valuable and highly readable history of risk and reward." -Burton Malkiel, The Wall Street Journal

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Produktdetails

• Verlag: HarperCollins e-books
• Seitenzahl: 402
• Erscheinungstermin: 21. November 2023
• Englisch
• ISBN-13: 9780061885709
• Artikelnr.: 37994188

Autorenporträt

Justin Fox is editorial director of the Harvard Business Review Group, and a contributor to Time magazine and PBS's Nightly Business Report. Previously, he was a columnist at Time and an editor and writer at Fortune. He lives in Cambridge, Massachusetts, with his wife and son.

Inhaltsangabe

Introduction: It Had Been Working So Exceptionally Well
EARLY DAYS
1. Irving Fisher Loses His Briefcase, and Then His Fortune
The first serious try to impose reason and science upon the market comes in
the early decades of the twentieth century. It doesn't work out so well.
2. A Random Walk from Fred Macaulay to Holbrook Working
Statistics and mathematics begin to find their way into the economic
mainstream in the 1930s, setting the stage for big changes to come.
THE RISE OF THE RATIONAL MARKET
3. Harry Markowitz Brings Statistical Man to the Stock Market
The modern quantitative approach to investing is assembled out of equal
parts poker strategy and World War II gunnery experience.
4. A Random Walk from Paul Samuelson to Paul Samuelson
The proposition that stock movements are mostly unpredictable goes from
intellectual curiosity to centerpiece of an academic movement.
5. Modigliani and Miller Arrive at a Simplifying Assumption
Finance, the business school version of economics, is transformed from a
field of empirical research and rules of thumb to one ruled by theory.
6. Gene Fama Makes the Best Proposition in Economics
At the University of Chicago's Business School in the 1960s, the argument
that the market is hard to outsmart grows into a conviction that it is
perfect.
THE CONQUEST OF WALL STREET
7. Jack Bogle Takes on the Performance Cult (and Wins)
The lesson that maybe it's not even worth trying to beat the market makes
its circuitous way into the investment business.
8. Fischer Black Chooses to Focus on the Probable
Finance scholars figure out some ways to measure and control risk. More
important, they figure out how to get paid for doing so.
9. Michael Jensen Gets Corporations to Obey the Market
The efficient market meets corporate America. Hostile takeovers and lots of
talk about shareholder value ensue.
THE CHALLENGE
10. Dick Thaler Gives Economic Man a Personality
Human nature begins to find its way back into economics in the 1970s, and
economists begin to study how markets sometimes fail.
11. Bob Shiller Points Out the Most Remarkable Error
Some troublemaking young economists demonstrate that convincing evidence
for financial market rationality is sadly lacking.
12. Beating the Market with Warren Buffett and Ed Thorp
Just because professional investors as a group can't reliably outperform
the market doesn't mean that some professional investors can't.
13. Alan Greenspan Stops a Random Plunge Down Wall Street
The crash of 1987 exposes big flaws in the rational finance view of risk.
But a rescue by the Federal Reserve averts a full reexamination.
THE FALL
14. Andrei Shleifer Moves Beyond Rabbi Economics
The efficient market's critics triumph by showing why irrational market
forces can sometimes be just as pervasive as the rational ones.
15. Mike Jensen Changes His Mind about the Corporation
The argument that financial markets should always set the priorities - for
corporations and for society - loses its most important champion.
16. Gene Fama and Dick Thaler Knock Each Other Out
Where has the debate over market rationality ended up? In something more
than a draw and less than a resounding victory.
Epilogue: The Anatomy of a Financial Crisis
Cast of Characters
Acknowledgments
A Note on Sources
Suggestions for Further Reading
Notes