Adaptive Markets: Financial Evolution at the Speed of Thought

Princeton University Press
2
Free sample

A new, evolutionary explanation of markets and investor behavior

Half of all Americans have money in the stock market, yet economists can't agree on whether investors and markets are rational and efficient, as modern financial theory assumes, or irrational and inefficient, as behavioral economists believe—and as financial bubbles, crashes, and crises suggest. This is one of the biggest debates in economics and the value or futility of investment management and financial regulation hang on the outcome. In this groundbreaking book, Andrew Lo cuts through this debate with a new framework, the Adaptive Markets Hypothesis, in which rationality and irrationality coexist.

Drawing on psychology, evolutionary biology, neuroscience, artificial intelligence, and other fields, Adaptive Markets shows that the theory of market efficiency isn't wrong but merely incomplete. When markets are unstable, investors react instinctively, creating inefficiencies for others to exploit. Lo's new paradigm explains how financial evolution shapes behavior and markets at the speed of thought—a fact revealed by swings between stability and crisis, profit and loss, and innovation and regulation.

A fascinating intellectual journey filled with compelling stories, Adaptive Markets starts with the origins of market efficiency and its failures, turns to the foundations of investor behavior, and concludes with practical implications—including how hedge funds have become the Galápagos Islands of finance, what really happened in the 2008 meltdown, and how we might avoid future crises.

An ambitious new answer to fundamental questions in economics, Adaptive Markets is essential reading for anyone who wants to know how markets really work.

Read more

About the author

Andrew W. Lo is the Charles E. and Susan T. Harris Professor at the MIT Sloan School of Management and director of the MIT Laboratory for Financial Engineering. He is the author of Hedge Funds and the coauthor of A Non-Random Walk Down Wall Street and The Econometrics of Financial Markets (all Princeton). He is also the founder of AlphaSimplex Group, a quantitative investment management company based in Cambridge, Massachusetts.
Read more
4.0
2 total
Loading...

Additional Information

Publisher
Princeton University Press
Read more
Published on
Apr 24, 2017
Read more
Pages
504
Read more
ISBN
9781400887767
Read more
Language
English
Read more
Genres
Business & Economics / Consumer Behavior
Business & Economics / Economics / General
Business & Economics / Economics / Theory
Business & Economics / Finance / General
Business & Economics / Forecasting
Read more
Content Protection
This content is DRM protected.
Read more
Read Aloud
Available on Android devices
Read more
Eligible for Family Library

Reading information

Smartphones and Tablets

Install the Google Play Books app for Android and iPad/iPhone. It syncs automatically with your account and allows you to read online or offline wherever you are.

Laptops and Computers

You can read books purchased on Google Play using your computer's web browser.

eReaders and other devices

To read on e-ink devices like the Sony eReader or Barnes & Noble Nook, you'll need to download a file and transfer it to your device. Please follow the detailed Help center instructions to transfer the files to supported eReaders.
Fascinating insights into the hedge fund traders whoconsistently outperform the markets, in their own words

From bestselling author, investment expert, and Wall Streettheoretician Jack Schwager comes a behind-the-scenes look at theworld of hedge funds, from fifteen traders who've consistentlybeaten the markets. Exploring what makes a great trader a greattrader, Hedge Fund Market Wizards breaks new ground, givingreaders rare insight into the trading philosophy and successfulmethods employed by some of the most profitable individuals in thehedge fund business.

Presents exclusive interviews with fifteen of the mostsuccessful hedge fund traders and what they've learned over thecourse of their careersIncludes interviews with Jamie Mai, Joel Greenblatt, MichaelPlatt, Ray Dalio, Colm O’Shea, Ed Thorp, and manymoreExplains forty key lessons for tradersJoins Stock Market Wizards, New Market Wizards,and Market Wizards as the fourth installment of investmentguru Jack Schwager's acclaimed bestselling series of interviewswith stock market experts

A candid assessment of each trader's successes and failures, intheir own words, the book shows readers what they can learn fromeach, and also outlines forty essential lessons—from findinga trading method that fits an investor's personality to learning toappreciate the value of diversification—that investmentprofessionals everywhere can apply in their own careers.

Bringing together the wisdom of the true masters of the markets,Hedge Fund Market Wizards is a collection of timelessinsights into what it takes to trade in the hedge fund world.

We all create intellectual property. We all use intellectual property. Intellectual property is the most pervasive yet least understood way we regulate expression. Despite its importance to so many aspects of the global economy and daily life, intellectual property policy remains a confusing and arcane subject. This engaging book clarifies both the basic terms and the major conflicts surrounding these fascinating areas of law, offering a layman's introduction to copyright, patents, trademarks, and other forms of knowledge falling under the purview of intellectual property rights. Using vivid examples, noted media expert Siva Vaidhyanathan illustrates the powers and limits of intellectual property, distilling with grace and wit the complex tangle of laws, policies, and values governing the dissemination of ideas, expressions, inventions, creativity, and data collection in the modern world. Vaidhyanathan explains that intellectual property exists as it does because powerful interests want it to exist. The strongest economies in the world have a keen interest in embedding rigid methods of control and enforcement over emerging economies to preserve the huge economic interests linked to their copyright industries-film, music, software, and publishing. For this reason, the fight over the global standardization of intellectual property has become one of the most important sites of tension in North-South global relations. Through compelling case studies, including those of Starbucks, Coca-Cola, Sony, Amazon, and Google Books, Vaidhyanathan shows that the modern intellectual property systems reflect three centuries of changes in politics, economics, technologies, and social values. Although it emerged from a desire to foster creativity while simultaneously protecting it, intellectual property today has fundamentally shifted to a political dimension.
For over half a century, financial experts have regarded the movements of markets as a random walk--unpredictable meanderings akin to a drunkard's unsteady gait--and this hypothesis has become a cornerstone of modern financial economics and many investment strategies. Here Andrew W. Lo and A. Craig MacKinlay put the Random Walk Hypothesis to the test. In this volume, which elegantly integrates their most important articles, Lo and MacKinlay find that markets are not completely random after all, and that predictable components do exist in recent stock and bond returns. Their book provides a state-of-the-art account of the techniques for detecting predictabilities and evaluating their statistical and economic significance, and offers a tantalizing glimpse into the financial technologies of the future.

The articles track the exciting course of Lo and MacKinlay's research on the predictability of stock prices from their early work on rejecting random walks in short-horizon returns to their analysis of long-term memory in stock market prices. A particular highlight is their now-famous inquiry into the pitfalls of "data-snooping biases" that have arisen from the widespread use of the same historical databases for discovering anomalies and developing seemingly profitable investment strategies. This book invites scholars to reconsider the Random Walk Hypothesis, and, by carefully documenting the presence of predictable components in the stock market, also directs investment professionals toward superior long-term investment returns through disciplined active investment management.

The Heretics of Finance provides extraordinaryinsight into both the art of technical analysis and the characterof the successful trader. Distinguished MIT professor Andrew W. Loand researcher Jasmina Hasahodzic interviewed thirteen highlysuccessful, award-winning market professionals who credit theirsubstantial achievements to technical analysis. The result isthe story of technical analysis in the words of the people who knowit best; the lively and candid interviews with these gurus oftechnical analysis.

The first half of the book focuses on the technicians' careers: How and why they learned technical analysisWhat market conditions increase their chances of makingmistakesWhat their average workday is likeTo what extent trading controls their livesWhether they work on their own or with a teamHow their style of technical analysis is unique 

The second half concentrates on technical analysis and addressesquestions such as these:

Did the lack of validation by academics ever cause you to doubttechnical analysis?Can technical analysis be applied to other disciplines?How do you prove the validity of the method?How has computer software influenced the craft?What is the role of luck in technical analysis?Are there laws that underlie market action?What traits characterize a highly successful trader?How do you test patterns before you start using them with realmoney?

Interviewees include:
Ralph J. Acampora, Laszlo Birinyi, Walter Deemer, Paul Desmond,Gail Dudack, Robert J. Farrell, Ian McAvity, John Murphy, RobertPrechter, Linda Raschke, Alan R. Shaw, Anthony Tabell, StanWeinstein.

©2018 GoogleSite Terms of ServicePrivacyDevelopersArtistsAbout Google|Location: United StatesLanguage: English (United States)
By purchasing this item, you are transacting with Google Payments and agreeing to the Google Payments Terms of Service and Privacy Notice.