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15 of 15 people found the following review helpful
4.0 out of 5 stars ...with tangerine trees and marmalade skies...
Orthodox economics is very formal using complex models to predict future behaviour. Most economists, like meteorologists, are not held accountable for their predictions.

Within the very wide field of economics there are many conflicting views about the nature of economics and there is much in the way of interesting work going on out there and I would cite the...
Published on 8 July 2006 by Junglies

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23 of 27 people found the following review helpful
2.0 out of 5 stars Tilting at windmills
In this tome Mr Mandelbrot lambasts the previous century's inadequate financial models but seems unwilling to admit that the field has moved on somewhat, and unable to offer a practical model of his own.

Mr Mandelbrot shows how Bachelierian models fail to account for disastrous market drops which ruined many investors. He rubbishes two conventional...
Published on 2 Jun 2007 by Andrei


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4.0 out of 5 stars A great layman's view of the use of fractals in economics, 13 Jun 2013
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Charles (Manchester, United Kingdom) - See all my reviews
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Simple explanations of key concepts illustrated clearly in diagrammatic form. A great introduction to the subject for someone not familiar with the topic,
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5.0 out of 5 stars Brilliant but not conclusive enough., 1 May 2013
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I hope the author is inspired enough to go to even further depths on this important subject. Strike while the iron is hot. I hope there is greater worldwide research to lead to firmer conclusions.
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4.0 out of 5 stars Accessible and entertaining read, 21 Sep 2012
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This review is from: The (Mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward (Paperback)
Mandelbrot lends his name to this pop sci title which elaborates on how fractal theory can be applied to modelling financial markets. As someone with no background in economics, I found this book really interesting and thankfully it provides just about enough explanation to make sense of the technical jargon. Don't be put off if you can't tell a stock option from a swap, no prior knowledge is needed to enjoy this book. Mandelbrot stresses that much of the existing economic theory is based on models using over-simplified assumptions, with the overuse of the normal distribution seeming to particularly grind the author's gears.

While I expect most of the typing was done by RL Hudson, there is enough personal history and (at times) unadulterated bitterness to convince me that Mandelbrot played a strong hand in the writing of the book. He is honest about the controversy and mistrust of his pet theories, but also presents strong arguments of how and why they can be applied (wasting no time on modesty).

Overall, I'd recommend this book for outsiders interested in economics theory. Mandelbrot stresses that this is no investment guide and will not make you rich, but it's an enjoyable insight and if you own or would like to own any Mandelbrot set merchandise, this is probably the book for you.
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3.0 out of 5 stars Fractal Risks, 14 Oct 2011
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This review is from: The (Mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward (Paperback)
Mandelbrot hammers fractal chaos geometry, which he invented, into modern finance theory and finds the latter wanting. His insight is that modern finance theory, in an attempt to appear scientific and so gain credibility, overlooks the jiggles and wiggles in real-life phenomenon especially tail risks. Result: colossal losses and economic disequilibria. Mandelbrot goes to great lengths (repeatedly) to demonstrate how computer generated fractal patterns imitate observed asset returns far better than charts generated from normally distributed algorithms. But he fails to take the logical next step and proffer practical techniques based on fractal geometry to manage risk more effectively.
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5.0 out of 5 stars Very interesting read, 6 Aug 2011
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nick_rev_1 (Canterbury, UK) - See all my reviews
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This review is from: The (Mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward (Paperback)
This is a great read (if you like this sort of thing). Not too mathematical (there's a bit of maths in the appendices if you want though), anecdotal enough to make the (relatively dry) subject matter more interesting. A great insight into how one of the more brilliant thinkers of our time operates, and a huge nail in the coffin of the 'efficient market hypothesis', if there were ever any doubt that that theory was discredited. Does put the EMH nicely into context, too - it could only ever really be a working hypothesis for rough and ready financial modelling in very limited circumstances, whereas the mistake has been to try to extend EMH to become almost a mantra covering all markets all of the time.
The way Mandelbrot describes fractal modelling it seems a promising basis for all sorts of further research. Very interesting concluding chapter on practical applications of his theory and its derivatives ('In the Lab').
As another reviewer says, this is essentially a 'single point' book, with the point being made repeatedly and in a number of ways. For me, however, that did not detract: the point has sufficient depth to warrant the analysis and exploration undertaken.
Recommended.
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3.0 out of 5 stars Some good ideas, rehashed over and over in a terrible style, 10 July 2011
This review is from: The (Mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward (Paperback)
This book offers some very interesting ideas, the synthesis of which I had not come across before. As an Economics grad I'm familiar with a lot of what Mandelbrot is on about, and I was taught fractals in school, his application is fairly interesting.

Where he stumbles and never recovers is his writing style and structure. It is impossibly arrogant and continuously self referential. He constantly asserts that the whole field of economics is a collection of knuckleheads stuck in their dark, ignorant ways, and he is the messiah. He seems to conflate the field of economics in its entirity for the field of finance, and not just finance, the pantomime bad-guy subbranch of "high finance"/Wall Street. This seems to be hugely cynical and just an angle to shift units.

His ideas are never laid out in much detail at all beyond his cartoons. Even the inexperienced reader will be desperate for more explanation. Everyone will know the Gaussian bell curve when they see it, the Cauchy is not so well known. The explanation is pretty thin, as are his ideas about how to deal with this. So what if we can realistically model "fat tails" from fractals? What will it do for prediction and prescription within the financial sector? I would love to have seem more of this methodological explanation.

But none ever comes. It is simply anecdote after anecdote about what a wild maverick and insightful powerhouse he is, and how he singlehandedly revolutionised the fields of maths, economics, geology, meteorology....but his peers were too stupid or arrogant or conservative to see how brilliant his research is.

So in the words of an actually brilliant economist: Why ain't you famous? If you are so great why haven't you revolutionised the field?

If Mandelbrot truely had it all figured out, he'd be more well known than Einstein. The Grand Unification Theory of the Economy/Financial Sector never comes. He himself admits that he doesnt have all the answers, so my question to Mandelbrot if I could still ask him is: Why do you write as if you do?

Its such a shame, I thought so highly of him, and his work on fractals is truely powerful stuff; yet the editors seem to have either massively inflated or completely ignored the choking atmosphere of pretentiousness.

TL;dr - Mandelbrots arrogance and terrible writing style somewhat diminish the power of his initial ideas, which are repeated and rehashed. They are never truly put in proper context. I am left feeling "Big deal. So What?"

Overall I'd give it 5/10. I much prefered the Drunkards Walk and Economics 2.0 which were well written and informative.
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3.0 out of 5 stars Scribbler, 29 Mar 2011
This review is from: The (Mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward (Paperback)
A slightly more technical review from a specialist but he does not really delve too deeply into Fama et al.
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4.0 out of 5 stars But how do I apply this?, 20 Dec 2010
By 
S Gleadall (UK) - See all my reviews
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This review is from: The (Mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward (Paperback)
Well written and a good summary of economic/financial theory and its now-familiar flaws.

Regarding the fractal theory, I was left thinking "Wow! This really makes sense and fits the data!". The arguments are persuasive that financial time series over varying time scales might well be described neatly by fractals.

BUT...it's not clear to me where this leads. It seems to be a tidy, shorthand descriptive device. But I couldn't see any meaningful applicability with respect to explanation or prediction.

Perhaps it is telling that fractal theory is the branch of mathematics seemingly most beloved of artists. Some beautiful graphical depictions have been created algorithmically by fractal engines. But as to the usefulness of the theory at this point in time, I was left unconvinced.

Nevertheless an enjoyable book in many respects which I would recommend.

S Gleadall - [...]
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5.0 out of 5 stars (mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward by Benoit B. Mandelbrot, 12 Nov 2010
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Ben Cowell "BEN COWELL aka BC" (Gloucestershire, England) - See all my reviews
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Benoit B. Mandelbrot wrote this seminal book on risk and the understanding of it. I purchased mine when it was published, and was rereading when I heard he had died, what a loss RIP. Then I mislaid my book, I was distraught, it surfaced, phew! I won't go over & repeat all the other reviews as they have covered the subject comprehensively. Needless to say I cannot recommend this too highly whether your a life long student of investing or of economics or just curious. It's not an easy read, but persevere and you won't regret it. As the author wrote that the book won't make you rich but could save you from making catastrophic mistakes! We need more independent thinkers like him, who view their surroundings with curiosity and don't take `the standard model' as de rigueur!
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5.0 out of 5 stars (Mis)behavior is the constant of markets, 5 April 2010
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Nabil Kobeissi (London, United Kingdom) - See all my reviews
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This review is from: The (Mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward (Paperback)
Mandelbrot outlines in plain English the loopholes in the foundation of the efficient market hypothesis, he proposed a theoretical alternative with no or limited application. It will require time, scientists and resources to put the multi fractal theory in application. It is very interesting to read and push you to think differently.
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