The Madness of Markets

A groundbreaking look at what drives even the smartest investors to make irrational choices and a practical roadmap for profiting when the market loses its mind—from one of the world’s leading finance professors

“A fascinating and indispensable guide to the hidden psychology that drives markets.”—Annie Duke, decision strategist and author of Thinking in Bets and Quit

Why did Isaac Newton lose a fortune in the South Sea Bubble? Why did people spend millions on cartoon apes during the NFT frenzy? Why does the stock market fall when a national soccer team loses, or rise on a sunny day?

In this lively, eye-opening, and highly practical book, Alex Edmans reveals the hidden psychological forces that push markets away from logic—and create opportunities for those who stay sane while others panic. Drawing on cutting-edge studies and his more than twenty years at the intersection of academia and Wall Street, Edmans explains why investors chronically overreact, underreact, and misreact—and how these mistakes lead to bubbles, crashes, hype cycles, portfolio wipeouts, and mass layoffs.

But The Madness of Markets isn’t just about spotting irrationality—it’s about outsmarting it. Edmans shows you how to think sharper, invest smarter, dodge predictable traps, and recognize when the crowd has lost the plot. Playfully rigorous and packed with unforgettable stories—from Reddit frenzies to CEO ego trips to World Cup upsets—The Madness of Markets offers an accessible yet thorough guide for anyone looking to make smarter decisions in a noisy financial world.

This book is for anyone with a pension, an IRA, or a long-term stake in the market—whether you’re chasing crypto highs or simply protecting your retirement while the world loses its mind.