Misbehavior of MarketsBenoit B. Mandelbrot, one of the century's most influential mathematicians, is worldfamous for making mathematical sense of a fact everybody knows but that geometers from Euclid on down had never assimilated: Clouds are not round, mountains are not cones, coastlines are not smooth. To these classic lines we can now add another example: Markets are not the safe bet your broker may claim. In his first book for a general audience, Mandelbrot, with coauthor Richard L. Hudson, shows how the dominant way of thinking about the behavior of marketsa set of mathematical assumptions a century old and still learned by every MBA and financier in the worldsimply does not work. As he did for the physical world in his classic The Fractal Geometry of Nature, Mandelbrot here uses fractal geometry to propose a new, more accurate way of describing market behavior. The complex gyrations of IBM's stock price and the dollareuro exchange rate can now be reduced to straightforward formulae that yield a far better model of how risky they are. With his fractal tools, Mandelbrot has gotten to the bottom of how financial markets really work, and in doing so, he describes the volatile, dangerous (and strangely beautiful) properties that financial experts have never before accounted for. The result is no less than the foundation for a new science of finance. 
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LibraryThing Review
User Review  IvanIdris  LibraryThingIn 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 ... Read full review
LibraryThing Review
User Review  RamiFaour  LibraryThingThis book offers some key points on fractals, by the pen of it's creator (the person that formalized it into a theory, more correctly), it offers a fruitful introduction to the topic, and what it lacks in rigor, it makes up in relating theory to events in the real world. Read full review
Contents
Risk Ruin and Reward  3 
By the Toss of a Coin or the Flight of an Arrow  25 
Bachelier and His Legacy  43 
The House of Modern Finace  59 
The Case Against the Modern Theory of Finance  79 
Images of the Abnormal  88 
The New Way  109 
Turbulent Markets A Preview  111 
Long Memory from the Nile to the Marketplace  173 
Noah Joseph and Market Bubbles  197 
The Multifractal Nature of Trading Time  207 
The Way Ahead  223 
Ten Heresies of Finance  225 
In the Lab  253 
Notes  277 
303  
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