Key Takeaways
- • Professor Alex Edmans (London Business School) released a new book on September 2, 2026, titled "Madness of Markets: Why Smart Investors Make Crazy Decisions – And How to Exploit Them," addressing systematic behavioral failures in capital markets.
- • Edmans examines why sophisticated investors make predictable irrational decisions and how market pricing mechanisms systematically fail to reflect accurate valuations.
- • The discussion, hosted by Jason Mitchell (CIO for Responsible Investment at Man Group), explores the intersection of behavioral finance, corporate governance, and sustainable investing as mechanisms to identify and exploit market inefficiencies.
- • Edmans' research bridges corporate purpose, ESG considerations, and behavioral finance, suggesting that sustainable investing frameworks may serve as tools for identifying mispricings driven by investor psychology rather than fundamental value.
Summary
Professor Alex Edmans, a leading academic voice on corporate purpose and sustainable investing at London Business School, released his latest book "Madness of Markets: Why Smart Investors Make Crazy Decisions – And How to Exploit Them" in September 2026. The work addresses a central paradox in modern finance: why intelligent, well-resourced investors consistently make predictable errors in capital allocation and valuation.
The book, released during a podcast interview with Jason Mitchell, CIO for Responsible Investment at Man Group on the program "A Sustainable Future," examines the systematic and recurring ways markets misprice assets. Rather than treating market inefficiencies as random anomalies, Edmans' research suggests these failures follow identifiable patterns that sophisticated investors can recognize and exploit for alpha generation.
Edmans brings substantial credibility to this analysis, having authored the bestselling book "Grow the Pie: How Great Companies Deliver Both Purpose and Profit" and co-authored "Principles of Corporate Finance," the foundational finance textbook. His career has positioned him at the intersection of behavioral finance, corporate governance, and sustainable investing—three domains increasingly recognized as connected in institutional investment strategy. The premise underlying his work suggests that corporate purpose and sustainable investing frameworks are not merely ethical imperatives but potentially valuable lenses through which to identify pricing anomalies driven by systematic investor behavior rather than fundamental risk.
The timing of this release reflects growing institutional recognition that understanding market psychology and behavioral biases may be essential for outperformance in an era when passive indexing and quantitative strategies have narrowed traditional alpha sources. By examining how and why markets systematically underprice or overprice opportunities—and connecting these failures to corporate governance and ESG frameworks—Edmans offers institutional investors a structured approach to thinking about market inefficiencies beyond traditional fundamental analysis.
The book, released during a podcast interview with Jason Mitchell, CIO for Responsible Investment at Man Group on the program "A Sustainable Future," examines the systematic and recurring ways markets misprice assets. Rather than treating market inefficiencies as random anomalies, Edmans' research suggests these failures follow identifiable patterns that sophisticated investors can recognize and exploit for alpha generation.
Edmans brings substantial credibility to this analysis, having authored the bestselling book "Grow the Pie: How Great Companies Deliver Both Purpose and Profit" and co-authored "Principles of Corporate Finance," the foundational finance textbook. His career has positioned him at the intersection of behavioral finance, corporate governance, and sustainable investing—three domains increasingly recognized as connected in institutional investment strategy. The premise underlying his work suggests that corporate purpose and sustainable investing frameworks are not merely ethical imperatives but potentially valuable lenses through which to identify pricing anomalies driven by systematic investor behavior rather than fundamental risk.
The timing of this release reflects growing institutional recognition that understanding market psychology and behavioral biases may be essential for outperformance in an era when passive indexing and quantitative strategies have narrowed traditional alpha sources. By examining how and why markets systematically underprice or overprice opportunities—and connecting these failures to corporate governance and ESG frameworks—Edmans offers institutional investors a structured approach to thinking about market inefficiencies beyond traditional fundamental analysis.
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