Professor of Finance, Fellow of the British Academy, non-exec director, author, TED speaker. Purposeful business, responsible investing, behavioral economics.
London
Joined January 2012
- Tweets4.9K
- Following269
- Followers14.2K
- Likes7.2K
Pinned Tweet
Grateful for these early endorsements of The Madness of Markets. They come from a wide range of readers (investors, journalists, behavioural scientists, advertising executives, academics) and highlight the book's broad intended audience.
Alex Edmans retweeted
Arkadaşlar, Güzel haber:
Sevgili Dostum ve ortak yazarım Dünyaca ünlü akademisyen Prof. Dr. Alex Edmans yeni kitabını çıkardı. Tam da yatırımcılara göre bir kitap!
Zeki Yatırımcılar neden Aptalca kararlar alabiliyor ve biz bunları kar etmek için nasıl kullanabiliriz?
Hepsi bu Amazon Linkinde:
amazon.co.uk/gp/product/0241…
Alex Edmans retweeted
"Before you think about investing in the first place, think about what your edge is."
Listen to this conversation between Alex Edmans (@aedmans) and Kevin Coldiron for more practical tips on how to become a better investor. 👇👇
youtu.be/ACtljPqha_A?si=4-9_…
I'm a massive fan of the Merryn Talks Money podcast: I listen to every episode and recommend it to my students each year. It was thus a huge pleasure to appear on it – this time in person – to discuss The Madness of Markets with @MerrynSW. The episode, "How to Outsmart Your Investing Instincts", is a lively, wide-ranging discussion about the psychological biases that distort our investment decisions – and how to overcome them.
What made this conversation particularly enjoyable was discussing these ideas with one of the UK's leading commentators on financial markets, who brought her own perspectives and challenges rather than simply interviewing me about the book.
🎥: lnkd.in/e5NQnSyq
🎧: lnkd.in/eeyxMfvV
Alex Edmans retweeted
🎧 The idea that stocks and bonds follow a rational path has been widely debunked. But are idiosyncrasies becoming more visible?
“The Madness of Markets” author @aedmans joined Peter Thal Larsen to debate how the rules of investing have changed.
Full 👉 tinyurl.com/msp97ksr
Alex Edmans retweeted
This is lovely. 🥰
Man is twice a child.
Be sure to look after your parents and grandparents.
It is our duty. 😊
Alex Edmans retweeted
Hi Antony, I saw your message and felt compelled to write. Twitter/X is a strange place at times made better by people who pop up and bring fun, insight or who just reach out to others and say hello. It looks from the replies you've brought plenty to many.
I played at Elm Park only once, for Palace reserves in 1991, I remember it so clearly because I carried a canteen of cutlery from the ground on the train back home to Cannock as my best mate was getting married. I must have been 20 or 21. Happy days.
I'm here we're part of a crazy, unhinged, funny, witty family that are English football supporters. And as a part of that family thanks for the part you played in making it probably the most satisfying family anyone can have.
In Cannock, where I'm from, men went underground to make a living, it was dangerous and hard work with no guarantees of survival . Football was the saviour of many, both playing and watching. A motto came out of those mines, "out of the darkness, cometh light", used by Wolves to this day as a metaphor that good times will come. Last year I lost my Mom, my Dad and a beloved friend within months. That motto is both a painful reminder of grief and a powerful inspiration to live as best as I can. Just like you have and are.
I hope you get to read this like the other messages underneath your post, a lot of people have been touched by your interaction with them here, complete strangers appreciating who you are for playing a part on their day and their life. I'm just the latest.
Antony, I'll see you at the far stick.
Stan
Alex Edmans retweeted
I've read half of The Madness of Markets so far. Fantastic book! It's an extremely insightful tour d'horizon of behavioral finance, written with delightful charm and humor, and is extensively informed by academic research.
Alex Edmans retweeted
**NEW**
The Madness of Markets with Professor @aedmans
Making sense of numbers, statistics and psychology with the man who was the brightest boy in my class at school
podcasts.apple.com/gb/podcas…
The Madness of Markets is out today in the US!
From Isaac Newton losing a fortune in the South Sea Bubble to AI, meme stocks and the madness of today's markets, it's been a lot of fun bringing this book to life. I'm delighted that US readers can finally get their hands on it.
📕 amazon.com/Madness-Markets-I…
Ten years ago, I offered students a free £50 in class and asked who wanted it. Many students put their hands up, but only a couple were bold enough to come forward and try to take it (even though I made clear it was freely available, and not stealing). This was a social experiment to encourage students to take every opportunity and be proactive, even if it involves discomfort and going against the grain.
The £50 went to a student, Laura, who kindly tried to give it back to me after class, but I insisted she'd earned it. I was delighted to see Laura again on Friday when giving a talk to the @LBS Alumni Council. It's no surprise that the same qualities she exhibited 10 years ago are also evident in her willingness to step forward and serve her alumni community on the Council.
Thanks so much to everyone who came to the launch event for The Madness of Markets, to @MerrynSW for being a superb moderator, and @LBS for putting on a fantastic event that will live long in the memory.
Out of everything I've ever written, this is the one work I'm most excited about sharing. It's about how our biases lead even smart people to make costly decisions. The direct lessons are in investing, but the broader lessons are for life.
The Madness of Markets is out today in the UK! It's on the psychology of financial markets – why smart investors make serious mistakes, and how we can overcome our biases to make better decisions. While financial markets are the laboratory, the lessons are much broader and apply to any high-stakes decision.
PART I: OVERREACTION
1. Bubble Trouble: Why We All Go Crazy at the Top
2. Mood Music: How Feelings Cloud Finance
3. Much Ado About Nothing: The Name-Game and Other Non-News
4. Monkey See, Monkey Buy: Viral Herding in Markets
PART II: UNDERREACTION
5. Slow on the Uptake: When Markets Snooze on News
6. The Hidden Goldmine: Why Intangibles Are the Market’s Blind Spot
7. C-Suite Secrets: Signals From the Summit
PART III: MISREACTION
8. When 2 + 2 = 5: Adding Up Market Mistakes
9. Misguided Missiles: Locking Onto the Wrong Targets
10. Legends in Our Own Mind: The Overconfidence Trap
PART IV: CORRECTION
11. Outsmarting the Market: Making Sense of Madness
I had more fun writing this than anything I've written before. I hope you have just as much fun reading it.
📕 UK: lnkd.in/emgZB-Ay
📕 US: lnkd.in/eAaXB6ji (out on Tuesday)
“A dazzling summation … a stunning indictment of human weaknesses, with numbers attached.”
Very grateful for John Authers of Bloomberg @business for his review od The Madness of Markets. Gift link below.
bloomberg.com/opinion/articl…
Big thanks to Barnes & Noble for offering 25% off on preorders of The Madness of Markets until Friday. Available to Rewards and Premium members (Rewards membership is free to join). Premium members get an extra 10% off. Pre-order here: barnesandnoble.com/w/the-mad…
Alex Edmans retweeted
The Madness of Markets, by @ajkeen keenon.substack.com/p/the-ma…
@aedmans
Isaac Newton might be able to foresee the movement of the stars, but he couldn’t foretell the madness of men. It was a lesson that cost the great physicist £4 million (in today’s money) when he threw his fortune into the South Sea Bubble. This priceless parable in Newtonian psychology opens The Madness of Markets, the new book by Alex Edmans — London Business School finance prof, old friend of the show, and author of the bestselling May Contain Lies.
Dr Edmans’s prognosis is bracingly unflattering to guys like Isaac Newton and Mark Twain who splurge their fortunes on speculative ventures. Intelligence, he reminds us, is domain-specific, but many smart people simply aren’t intelligent enough to realize this. So, in the age of Robinhood — when we can all trade anything from stocks, options, crypto to NFTs — the supposed wisdom of crowds is sometimes driven over the cliff by the irrational exuberance of dumb individuals.
Speaking of driving off the cliff, ninety percent of us think we’re above-average drivers, Edmans jokes, and this same delusion applies to markets. Unfortunately, such stupidity can be expensive for big brain types like Newton or Twain. “When people trade, even before fees and commissions, the average trade loses money,” he warns.
So close your Robinhood account and stick your cash in the bank? No, not quite. Know your edge, Edmans reminds us. And when it comes to making sense of the current AI boom, Edmans offers some particularly wise words. The AI sector trades at 25 to 30 times earnings rather than Cisco’s bubble-era 190, he notes, so it’s unlikely anyone will lose their life’s savings on Anthropic or OpenAI.
That said, the good doctor Edmans advises, don’t confuse your self-worth with your net worth. That’s a rookie conceit that only somebody as smart as Isaac Newton would fall for.
Delighted to receive the finished copies of The Madness of Markets. @PenguinUKBooks have done a fantastic job with the cover: a half-jacket wrapped around the book like a $100 bill.
Out of everything I've ever written, this is the one I'm most excited about sharing. I can't wait for it to be out in a few weeks!
Since Simon Woolley is calling for investigations, perhaps one should be undertaken into how he became Principal of Homerton College, Cambridge, despite almost no academic credentials.
When it appointed Professor Geoffrey Ward in 2013, Homerton praised his “deep understanding of research and academic life”, teaching and institutional leadership. Most Oxbridge college heads are distinguished academics, since they need to provide academic leadership and be able to evaluate academic excellence. While I have been unable to find the Homerton brief, other Oxbridge briefs have specified “a distinguished record of achievement in an academic or other intellectually challenging career” and “a deep understanding of the values and demands of a scholarly environment, demonstrating a commitment to education and research”.
Now, you don't need to be a career academic to do this. Indeed, Oxbridge colleges may benefit from a diversity of backgrounds. A head of a think tank, major research funder or other knowledge institution may bring equivalent intellectual and institutional credibility.
But Woolley has led no such organisation. Homerton's public case for him instead stressed his social-justice campaigning, such as Operation Black Vote. As an ethnic minority myself, I appreciate some of his stances on racial issues. But while he has admirable qualifications for advocacy, academic research demands the opposite mindset: openness to competing viewpoints and evaluating ideas on their scholarly merit, rather than whether they support one's preconceived viewpoint.
And this extends beyond Woolley to any head of an Oxbridge college or leading academic institution. These are privileged positions that affect the quality of the faculty who are hired, the students who are admitted and the research that gets funded. They need to be earned through merit.
The erosion of meritocracy in academia extends far beyond Jason Arday.
Strategic Management Journal, one of the top-tier journals in management, accepted a paper showing negative market reactions to the appointment of Black executives. After acceptance, it was changed because readers objected.
This is extremely unusual. Editors and reviewers can raise concerns, but readers play no role in the review process. Once a paper is accepted, it might later be retracted if serious errors are found which affect its scientific accuracy, but not just because people don't like it.
Moreover, once a paper is accepted and posted online, it becomes part of the scientific record. When I was Managing Editor of a journal, sometimes the publisher or the authors made a minor omission (e.g. leaving off the acceptance date or an acknowledgement). The publisher refused to simply add the missing information; they would only issue a corrigendum, leaving the original version intact. Even if a paper is retracted, it still typically remains visible.
Here, the original manuscript has completely disappeared. So, the scientific community can only see the version that readers wanted, not the one the authors wrote and the editor/referees accepted. Remarkably, it has been treated even worse than some retracted papers: their original versions remain visible; this one does not.
sms.onlinelibrary.wiley.com/…
