Investment Uncut: Alex Edmans - How to exploit the madness of markets?

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In this episode of Investment Uncut, Jacob and Aaron are joined by Alex Edmans who discusses his recent book – The Madness of Markets, where he explores the madness that can emerge in financial markets: from striking examples of investor behaviour to the potential for mispricing in today’s fast-moving, large language model race, between higher-cost US providers and Chinese competitors.  

We discuss why even sophisticated professional investors remain vulnerable to behavioural biases, and how investors can seek to recognise others’ irrationality without becoming trapped by their own assumptions. The conversation also examines why identifying a market mistake is rarely the same as successfully exploiting it, why an abundance of information can cloud rather than improve judgement, and where a genuine investment edge may still be found.  

Finally, we close with one practical, actionable change investors can make to build a more disciplined process and improve their chances of outsmarting the market. 

What’s one thing you would like listeners to take away?

• 'Just be in the market. Being invested and staying invested matters more than constantly trying to pick the perfect fund or time the market. The power of diversification and compounding means that simply being in the market can be more valuable than overthinking the small decisions.'

Any recommendations?

• 'Madness of Markets: Why Smart Investors Make Crazy Decisions – And How to Exploit Them'