The Madness of Markets
Why Smart Investors Make Crazy Decisions – And How to Exploit Them
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The Madness of Markets
Buy Now for £12.06
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Narrated by:
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Alex Edmans
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By:
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Alex Edmans
Even the smartest investors lose their minds – and their money.
Why do investors chase AI stocks that bleed losses? Why do they ignore glaring opportunities hiding in plain sight? Why does the stock market fall after a football defeat, or rise on a sunny day?
In The Madness of Markets, Professor Alex Edmans reveals how mood, emotion and social contagion lead even seasoned professionals to make irrational decisions.
But their mistakes can become your advantage. Edmans uncovers how you can protect yourself from costly mishaps and capitalise when others misstep. You’ll learn how to think sharper, invest smarter and recognise when the crowd has lost the plot.
From one of the world’s leading finance professors, this is a compelling guide to beating the market in a world that thinks fast, loud and wrong.
"INCREDIBLY USEFUL AND ENTERTAINING" - Rory Sutherland, Vice Chairman of Ogilvy and author of Alchemy
"PUNCHY, WITTY, AND PROVOCATIVE" - Gillian Tett, Financial Times columnist and author of Anthro-Vision
"FASCINATING AND INDISPENSIBLE" - Annie Duke, Decision strategist and author of Thinking in Bets and Quit
© Alex Edmans 2026 (P) Penguin Audio 2026
Despite running through a highly structured framework—covering market overreaction, underreaction, misreaction, and self-correction—the audiobook offers virtually nothing new or unknown for anyone who already pays attention to their investments.
The core weakness of the book is evident in its overreliance on well-worn historical anecdotes to explain market overreaction. Edmans points to the South Sea Bubble, the late-1990s dotcom crash, and the 2021 meme-stock frenzy surrounding GameStop and NFTs to illustrate how crowds panic or succumb to greed. His proposed solutions are equally unoriginal: buy unloved "value" shares, utilise a mechanical reversal strategy, or simply ignore the noise of social media echo chambers. The text even spends time proving that markets fall when national football teams lose or when the weather is gloomy. While this makes for mildly interesting trivia, it is hardly an actionable strategy for serious wealth generation.
When discussing market underreaction, the audiobook leans heavily on standard momentum investing tactics. Listeners are told that short-term winners tend to keep winning and that they should buy after positive earnings surprises. The author’s insights into "C-Suite Secrets" boil down to obvious red flags, such as avoiding narcissistic CEOs who buy corporate jets, sign their names too conspicuously, or hide their annual general meetings in remote locations. These are common-sense observations rather than the profound institutional secrets the book's marketing implies.
The latter half of the audiobook, focusing on misreaction and correction, confirms that the promised "skills" are merely basic financial discipline disguised as advanced tactics. The section on misreaction spends substantial time warning listeners about the disposition effect—selling winners too early and holding losers too long—and retells the year 2000 Palm and 3Com spin-off story to demonstrate simple market mispricing.
However, the ultimate proof of the book's superficiality lies in its concluding "Correction" toolkit. Instead of delivering sophisticated ways to exploit madness, the 20 practical tips read like a beginner's checklist. The grand advice for outsmarting the market includes turning off price alerts on your phone, writing down the pros and cons of a trade, automating your monthly pension contributions, and remembering to use basic tax allowances. Edmans repeatedly concedes that most everyday investors should simply buy low-cost exchange-traded funds (ETFs) and avoid picking shares entirely.
In fairness, the audiobook functions as a competent, safe primer for absolute beginners who need to be told not to panic-sell during a crash or follow financial advice from strangers online. However, applying the actual lessons of this book simply means avoiding the crowd and maintaining boring, steadfast discipline. For anyone seeking an eye-opening or factual deep-dive into new market mechanics, this release falls entirely flat.
Promises a blueprint for profiting from irrational financial behaviors
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