Modern
investing
know-how
is
founded on the efficient market hypothesis, which holds that markets are
rational and, therefore, difficult to beat. Originally codified in the
1960s at the University of Chicago, the efficient market theory
became accepted wisdom for both academicians and market players. This
theory
has been
the
driver of trillions of investment
dollars,
the inspiration for index funds and vast new derivatives markets the world over.
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. The great
financial crash of 2008 has forced the investment world to ask the heretical
question whether the theory is, in
fact,
wrong.
A
hugely acclaimed international bestseller, The Myth of the Rational Market
is a fascinating exploration of how and whether the efficient market theory is
seriously flawed. The answer could affect how the world invests — and how you
should.
Celebrated
journalist and columnist Fox introduces a new wave of economists and scholars
who now agree with Yale professor Robert Shiller that the efficient market
theory “represents one of the most remarkable errors in the history of
economic thought.” The new thinking holds that investors
overreact, under react, and make irrational decisions based on imperfect data. In
his
landmark book,
Fox uncovers the new ideas that may come to drive the market in the century
ahead.
So,
is your
existing
investment knowledge flawed? Do investors need to update themselves with new
knowledge in order to profit in the contemporary markets?
Read
this book and decide for yourself; it may be the most important investment
decision you will ever make . . .
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