Behavior Quote by Benoit Mandelbrot
“Most economists, when modeling market behavior, tend to sweep major fluctuations under the rug and assume they are anomalies. What I have found is that major rises and falls in prices are actually inevitable.”
About This Quote
Source Book: The ( of Turbulent Markets, 1963
Market prices naturally exhibit large swings; treating them as anomalies ignores fundamental volatility.
In simple terms: Price swings are inevitable.
Key Takeaway
Expect and plan for volatility.
Themes
finance
economics
risk
uncertainty
Mood
cautious
analytical
Type
analytical
educational
When to use this quote
- investment strategy
- risk management
- policy making
- trading
- portfolio construction
Key Concepts
fractal geometry
complex systems
non‑linear dynamics
Questions to Reflect On
- How can models incorporate inevitable volatility?
- What safeguards reduce impact of large swings?
A Different Perspective
Assuming anomalies can lead to underpreparedness for crises.
