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Synopsis With the invention of fractal geometry, mathematical superstar Benoit Mandelbrot forever changed our understanding of the mysteries of nature and influenced a host of modern fields, from chaos theory to computer animation. Now, together with science journalist and former Wall Street Journal editor Richard L. Hudson, Mandelbrot turns a fractal eye to the behaviour of financial markets and proves that they are far riskier than has commonly been believed. The ability to simplify the complex has made Mandelbrot one of the most influential mathematicians in the world. With his fractal models, the (mis)behavioiur of the world’s markets and the way prices and exchange rates move can be understood in more accurate terms for the first time. For the past forty years, Mandelbrot has been studying the underlying mathematics of finance – and this book relates his personal voyage. From his father’s wartime garment business, his research on the American cotton market, and his studies of the Nile River’s floods, Mandelbrot draws many unusual insights. This maverick scientist has proved that many of the fundamental assumptions of financial theory are wrong, and in the past decade a growing number of financiers and economists have started listening. The models he has built faithfully replicate real-world price series, illustrate the manner in which market turbulence clusters and show that no investment horizon is inherently better than another – volatility ‘scales’ the same over hours or decades. Financial markets do not fluctuate along a ‘random walk’; they operate with their own sense of ‘market time’ that does not correspond to hours and minutes as the clock counts them. The (Mis)behaviour of Markets is a revolutionary re-evaluation of the standard tools and models of modern financial theory. For the millions who have been led to underestimate the real risks of financial markets it will ensure that they never see things in quite the same way again.