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Beyond Greed and Fear: Finance and the Psychology of Investing
Even the best Wall Street investors make mistakes. No matter how savvy or experienced, all financial practitioners eventually let bias, overconfidence, and emotion cloud their judgement and misguide their actions. Yet most financial decision-making models fail to factor in these fundamentals of human nature. In Beyond Greed and Fear, the most authoritative guide to what ...more
Hardcover, 384 pages
Published September 15th 1999 by Oxford University Press, USA
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Oct 26, 2010 Tress rated it liked it · review of another edition
A job-related read. Fairly technical, but good insight into how behavioral finance works. I took away some reasonably applicable concepts and examples, helping to inform my understanding of why the people I help do the things they do,
I have only recently started reading behavioral finance books to understand my own investment and trading psychological drivers and found this book to be educative. As it is research based on it required dense me to slow read it. The research is good insight into how we value market and risk but as most research is nearly 2 decade old so pre-google lead information glut age so would love to discover some more books on the subject that include the current period too.
Over all a good primer to ...more
Over all a good primer to ...more
A fantastic overview of subjects on behavioural finance. It is kind of similar to the book 'Behavioural Finance: Psychology, Decision-making, and Markets', but with more cases. It states that psychology is everywhere under the finance topic.
As the author said, he organized the subject matter of behavioural finance into three broad themes: heuristic-driven bias, frame dependence, and inefficient market.
So far, in my understanding, this world does not exist behavioural finance. Finance did not ...more
An excellent overview of behavioral finance. Three mains components of most behavioral finance/economics/accounting ideas are explained well; heuristic biases, frame dependence and the inefficiency of markets (I think this could be expanded to describe inefficiencies in most most "free" exchanges of anything of value). The first half of the book goes over these key ingredients to understanding this subset of finance. The second half tries to apply these ideas to the investment industry, ...more
“Imagine 100 book bags, each of which contains 1,000 poker chips. Forty-five bags contain 700 black chips and 300 red chips. The other 55 bags contain 300 black chips and 700 red chips. You cannot see inside any of the bags. One of the bags is selected at random by means of a coin toss. Consider the following two questions about the selected book bag. 1. What probability would you assign to the event that the selected bag contains predominantly black chips? 2. Now imagine that 12 chips are drawn, with replacement, from the selected bag. These twelve draws produce 8 blacks and 4 reds. Would you use the new information about the drawing of chips to revise your probability that the selected bag contains predominantly black chips? If so, what new probability would you assign?”More quotes…