Sublime

Morality, it could be argued, represents the way that people would like the world to work—whereas economics represents how it actually does work. Economics is above all a science of measurement. It comprises an extraordinarily powerful and flexible set of tools that can reliably assess a thicket of information to determine the effect of any one

that, contrary to standard belief, the market shares of many technology companies could be predicted with great accuracy, even if the underlying changes in technology changed frequently.

In today’s stock market, most trades are made with someone else’s money (in Druckenmiller’s case, mostly George Soros’s). The 1990s and 2000s are sometimes thought of as the age of the day trader. But holdings by institutional investors like mutual funds, hedge funds, and pensions have increased at a much faster rate (figure 11-9). When Fama

4. Gains are shared more equally than ever before.

There frankly is a hell of a lot of value in the game theory and economics literature.

When it comes to making financial decisions, what should matter are opportunity costs, the true benefit a purchase provides, and the real pleasure we receive from it compared to other ways we could spend our money.

This paradox of comprehension was articulated explicitly by a great physicist of an earlier age: “Sir Isaac Newton, when asked what he thought of the infatuations of the people, answered that he could calculate the motions of erratic bodies, but not the madness of a multitude” (quoted from The Church of England Quarterly Review, 1850).