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The cover of The Myth of the Rational Market

The Myth of the Rational Market

Justin Fox

How did the idea that financial markets are rational come to rule Wall Street and Washington, and why did it fail?

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At a glance

Author
Justin Fox

Why read it

  • You will understand why many experts concluded you cannot beat the market, and why index funds grew from that idea
  • You will question the belief that financial markets should always set the priorities for corporations and society
  • You will see that panics have long been explained as a matter of the mind and memory, not only of money

Who it is for

  • An investor who relies on the idea that markets are efficient
  • A student of finance wondering how its big theories rose
  • A reader trying to understand what failed before the financial crisis

Contents

  1. INTRODUCTION
  2. IT HAD BEEN WORKING SO EXCEPTIONALLY WELL
  3. EARLY DAYS
  4. CHAPTER 1
  5. IRVING FISHER LOSES HIS BRIEFCASE, AND THEN HIS FORTUNE
  6. CHAPTER 2
  7. A RANDOM WALK FROM FRED MACAULAY TO HOLBROOK WORKING
  8. THE RISE OF THE RATIONAL MARKET
  9. CHAPTER 3
  10. HARRY MARKOWITZ BRINGS STATISTICAL MAN TO THE STOCK MARKET
  11. CHAPTER 4
  12. A RANDOM WALK FROM PAUL SAMUELSON TO PAUL SAMUELSON
  13. CHAPTER 5
  14. MODIGLIANI AND MILLER ARRIVE AT A SIMPLIFYING ASSUMPTION
  15. CHAPTER 6
  16. GENE FAMA MAKES THE BEST PROPOSITION IN ECONOMICS
  17. THE CONQUEST OF WALL STREET
  18. CHAPTER 7
  19. JACK BOGLE TAKES ON THE PERFORMANCE CULT (AND WINS)
  20. CHAPTER 8
  21. FISCHER BLACK CHOOSES TO FOCUS ON THE PROBABLE
  22. CHAPTER 9
  23. MICHAEL JENSEN GETS CORPORATIONS TO OBEY THE MARKET
  24. THE CHALLENGE
  25. CHAPTER 10
  26. DICK THALER GIVES ECONOMIC MAN A PERSONALITY
  27. CHAPTER 11
  28. BOB SHILLER POINTS OUT THE MOST REMARKABLE ERROR
  29. CHAPTER 12
  30. BEATING THE MARKET WITH WARREN BUFFETT AND ED THORP
  31. CHAPTER 13
  32. ALAN GREENSPAN STOPS A RANDOM PLUNGE DOWN WALL STREET
  33. THE FALL
  34. CHAPTER 14
  35. ANDREI SHLEIFER MOVES BEYOND RABBI ECONOMICS
  36. CHAPTER 15
  37. MIKE JENSEN CHANGES HIS MIND ABOUT THE CORPORATION
  38. CHAPTER 16
  39. GENE FAMA AND DICK THALER KNOCK EACH OTHER OUT
  40. EPILOGUE
  41. THE ANATOMY OF A FINANCIAL CRISIS
  42. CAST OF CHARACTERS
  43. A NOTE ON SOURCES
  44. SEARCHABLE TERMS

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