The Ecstatic Stock Market by David Rasmussen

If you like your popular science to be thought provoking as well as educational, then this book is highly recommended.

It is here that the author really lets loose with his broad knowledge of related theories from multiple disciplines, while still writing in plain English.īefore you worry that the book may become too high falutin’, let me say that the explanation of why economic booms and busts happen is one of the easiest to understand that I have ever read. Once we know the ‘what’ of the book, we are left with the ‘why?’, and then the ‘so what?’. This replication at all scales is typical of fractals - a fact that plays a large role in the book. Furthermore, segments of these trend lines will always be the same shape as the whole, no matter how small the segment. You just need to adjust the scale on the time-axis of the chart to get the fit. Rasmussen provides evidence that all markets regardless of what is being bought and sold (eg physical commodities, equities, derivatives etc), and regardless of how long they have existed (from hundreds of years to 50 years to the markets of a few seconds created by 21st century computerised trading) demonstrate identical price trend lines - just over different time scales. Hopefully this will be fixed in future editions. Sadly, my copy of The Ecstatic Stock Market lacks proper references, footnotes and a bibliography (for which I knocked off a star). The last time I felt so enthused to read everyone cited in a book was when I read the philosopher Colin Wilson’s magnum opus ‘The Outsider’. The way the author links and builds upon the ideas of almost 100 other people is one of the most fascinating and inspiring aspects of this book. In doing so, Rasmussen cites writers, artists, philosophers and scientists from Schopenhauer to Shakespeare, from von Neumann to Tom Petty, from Mandelbrot to Feigenbaum and many more. Rather than being (just) another get-rich-quick book for retail investors, it is instead a popular science book that argues for stock markets not only mirroring human society not only for them predicting human society but, also for them being shaped by the same universal laws, constants and (unknown) attractors that appear to shape everything else in our universe from the micro sub-atomic level to the macro cosmological level. A superb book, but not what I was expecting.

The Ecstatic Stock Market by David Rasmussen