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The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street Audiobook

Extended Audio Sample The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street, by Justin Fox Click for printable size audiobook cover
3 out of 53 out of 53 out of 53 out of 53 out of 5 3.00 (543 ratings) (rate this audio book) Author: Justin Fox Narrator: Alan Sklar Publisher: HarperCollins Format: Unabridged Audiobook Delivery: Instant Download Audio Length: Release Date:
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Chronicling the rise and fall of the efficient market theory and the century-long making of the modern financial industry, Justin Fox's The Myth of the Rational Market is as much an intellectual whodunit as a cultural history of the perils and possibilities of risk. The book brings to life the people and ideas that forged modern finance and investing, from the formative days of Wall Street through the Great Depression and into the financial calamity of today. It's a tale that features professors who made and lost fortunes, battled fiercely over ideas, beat the house in blackjack, wrote bestselling books, and played major roles on the world stage. It's also a tale of Wall Street's evolution, the power of the market to generate wealth and wreak havoc, and free market capitalism's war with itself.

The efficient market hypothesis—long part of academic folklore but codified in the 1960s at the University of Chicago—has evolved into a powerful myth. It has been the maker and loser of fortunes, the driver of trillions of dollars, the inspiration for index funds and vast new derivatives markets, and the guidepost for thousands of careers. The theory holds that the market is always right, and that the decisions of millions of rational investors, all acting on information to outsmart one another, always provide the best judge of a stock's value. That myth is crumbling.

Celebrated journalist and columnist Fox introduces a new wave of economists and scholars who no longer teach that investors are rational or that the markets are always right. Many of them now agree with Yale professor Robert Shiller that the efficient markets theory “represents one of the most remarkable errors in the history of economic thought.” Today the theory has given way to counterintuitive hypotheses about human behavior, psychological models of decision making, and the irrationality of the markets. Investors overreact, underreact, and make irrational decisions based on imperfect data. In his landmark treatment of the history of the world's markets, Fox uncovers the new ideas that may come to drive the market in the century ahead.

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Quotes & Awards

  • “Do we really need yet another book about the financial crisis? Yes, we do—because this one is different. Fox’s book is not an idle exercise in intellectual history, which makes it a must-read for anyone who wants to understand the mess we’re in.”

    Paul Krugman

  • “A fascinating historical narrative.”

    Washington Post

  • “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, this dense but spellbinding work brings modern finance and economics to life.”

    Publishers Weekly

  • “Justin Fox is a truly insightful fellow who can see things with his own eyes—a rare, very rare attribute.”

    Nassim Nicholas Taleb, author of The Black Swan

  • “This wise and witty book is must reading for anyone who wonders what makes financial markets tick. Even those who have wrestled with this question for years will be glad to have read Fox’s compelling history.”

    Peter Bernstein, author of Against the Gods: The Remarkable Story of Risk

  • “A lucid, lively and learned account.”

    Barron’s

  • “Fox makes business history thrilling.”

    St. Louis Post-Dispatch

  • “Impressively broad and richly researched.”

    Financial Times

  • “An intellectual tour-de-force.”

    The Economist

  • “A rich history of the world’s most seductive investing idea...the book chronicles the rise of rational market theory over the decades and captures the sizzle and pop of the intellectual debate.”

    Bloomberg

  • A New York Times Bestseller
  • Longlisted for the 2009 Financial Times Best Book of the Year
  • One of the 2009 New York Times Book Review 100 Notable Books for Nonfiction

Listener Reviews

  • 3 out of 53 out of 53 out of 53 out of 53 out of 5 Review by Izzy | 2/20/2014

    " Informative, peopled with lots of characters, but the pacing was very slow sometimes....too slow. "

  • 3 out of 53 out of 53 out of 53 out of 53 out of 5 Review by Josiah | 2/12/2014

    " Too much history for my tastes, though I'm not exactly sure what I mean by that. Lots of names and their arguments. I admit it forms a type of dialogue that is probably neatly formed but after enough positions were superseded, invalidated, or reforged into newer versions, I just wanted to hurry up and get to the current ones. "

  • 4 out of 54 out of 54 out of 54 out of 54 out of 5 Review by David Perrin | 1/27/2014

    " Great book! Really dispels the "efficiency" of the markets. "

  • 4 out of 54 out of 54 out of 54 out of 54 out of 5 Review by Nathan | 1/23/2014

    " A relatively fast paced and informing review of the academic approach to the markets over time. Worth the time "

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About the Author

Justin Fox is the editorial director of the Harvard Business Review Group. He is also a contributing writer at Time, where until 2010 he was the economics columnist and creator and lead writer of the Curious Capitalist blog. Before joining Time in 2007, Fox spent more than a decade at Fortune magazine, where he covered a wide variety of topics related to economics, finance, and international business. Prior to joining Fortune, Justin Fox worked at several newspapers, including American Banker and The Birmingham (Alabama) News. He has a degree in international affairs from Princeton University, studied political science at the University of Leiden in the Netherlands, and speaks Dutch and German. Fox is married and has a son. He lives in Cambridge, Mass.

About the Narrator

Alan Sklar, a graduate of Dartmouth, has excelled in his career as a freelance voice actor. He began narrating audiobooks in 1996, winning seven AudioFile Earphones Awards and earning several “Best Voice” awards. He has also worked as a stage actor and as a promo announcer at WPIX-TV in New York City. His dream is to be an opera singer, a role for which he hones his bass-baritone operatic skills in the upstairs shower of his home.