The following is a Big Saturday Interview from our archives in which Justin Fox speaks candidly about the the myth of the rational market with David Penn. Enjoy!
Click here to access this week’s Big Saturday Interview with Justin Fox, author of The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street.
How did we get from “a bunch of guys haggling under a buttonwood tree” – as Justin Fox puts it – to quantitative models that convinced investors, traders and policymakers alike that “the market was always right”? In his new book, journalist Justin Fox presents a fascinating history of the rise and fall of the efficient market hypothesis through the lives of many of the theory’s greatest proponents and critics.
In this, the first part of our conversation with Justin Fox we learn how the efficient market hypothesis was a necessary corrective against the excesses and often extravagant claims of celebrity investors during the bull market of the 1950s and 1960s. What the efficient markets challenge represented, and how we can learn from both the best and the worst of the myth of the rational market is the subject of our Big Saturday Interview this weekend.
Justin Fox is editorial director of the Harvard Business Review Group. He is a former columnist for Time magazine, where he authored the “Curious Capitalist” blog. Prior to his work with Time magazine, Justin Fox worked for more than a decade at Fortune magazine, including a stint as the magazine’s Europe editor in 2000 and 2001.
For Part 2 of this interview, click here.
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