Financial markets, from the perspective of mathematics, are quite interesting. I wrote a paper that referenced some of Mandelbrot's work, namely that cotton ma

Financial markets, from the perspective of mathematics, are quite interesting. I wrote a paper that referenced some of Mandelbrot's work, namely that cotton markets followed a Levy stable distribution: http://en.wikipedia.org/wiki/L%C3%A9vy_distribution http://en.wikipedia.org/wiki/L%C3%A9vy_distribution It's an interesting distribution as it pops up in nature a lot too, such as how birds find food. Mandelbrot's work and the work of many others have shown the movement in security prices resemble random walks. There is an awful lot of work that shows markets are basically unpredictable. Yet the reality is otherwise. People make an awful lot of money by predicting markets, which shouldn't really be true to the degree that it is if movements were random. There are trends like Mondays tend to be down days, Fridays tend to be up days and so on. Probably the biggest failing of financial modelling is the failure to adequately factor in the fat tail. Incredibly unlikely events tend to be more common than otherwise modelled. The collapse in the subprime mortgage market is the most significant recent example of this. Warren Buffett once characterized how many traders operate as picking up pennies in front of an oncoming bulldozer. The vast majority of the time it's safe but it's not 100% safe and the consequences are completely disproportionate to the reward. It's a challenge to model that kind of scenario. Anyway, RIP Benoit Mandelbrot. You were a mathematical visionary.