Mean Markets and Lizard Brains


Book Description

Everyone from journalists to market pros are turning to behavioral finance to explain, analyze, and predict market direction. In contrast to old-school assumptions of cool-headed rationality, the new behavioral school embraces hot-blooded human irrationality as a core feature of both individuals and financial markets. The 2002 Nobel Prize in Economics was awarded to scholars of this new scientific approach to irrationality. In Mean Markets and Lizard Brains, Terry Burnham, an economist who has a proven ability to translate complex topics into everyday language, reveals the biological causes of irrationality. The human brain contains ancient structures that exert powerful and often unconscious influences on behavior. This "lizard brain" may have helped our ancestors eat and reproduce, but it wreaks havoc with our finances. Going far beyond cataloguing our financial foibles, Dr. Burnham applies this novel approach to all of today's most important financial topics: the stock market, the economy, real estate, bonds, mortgages, inflation, and savings. This broad and scholarly investigation provides an in-depth look at why manias, panics, and crashes happen, and why people are built to want to buy at irrationally high prices and sell at irrationally low prices. Most importantly, by incorporating the new science of irrationality, readers can position themselves to profit from financial markets that often seem downright mean. Mean Markets and Lizard Brains skillfully identifies the craziness that is part of human nature, helps us see it in ourselves, and then shows us how to profit from a world that doesn't always make sense.




NeuroInvesting


Book Description

Rewire your brain for investing success As an investment advisor to high net worth individuals, Wai-Yee Chen has spent years watching her clients make investment decisions—some good decisions and some not-so-good decisions. Though confronted by the same market variables, those clients often make very different choices with very different results. Here, Chen argues that it's usually not the data that affects investor decision-making as much as the way investors themselves think. In NeuroInvesting, Chen argues that investors can change the way they think in order to change the way they invest. She presents four elements that affect investor decision-making and reveals how investors can rewire their brains to make better investing decisions for better returns. Uses neuroscience to explain how successful investors think different Written by an experienced investment advisor who works at one of Australia's premier retail brokers Explains investing using real-world stories about investors from an advisor's perspective When it comes to investing, how you think has a huge impact on how you make investing decisions. Based on the real science of how people think, NeuroInvesting offers every investor a chance to change the way they invest by changing the way they think.




Behavioral Trading


Book Description

Dorsey, a publisher of market commentary since 1985, explains market semiotics, his market research philosophy based on the logic of behavioral finance. His proprietary market diagnosis techniques have been described as market expectations theory, behavioral finance, and contrary opinion analysis. Annotation ♭2004 Book News, Inc., Portland, OR (booknews.com).




On Second Thought


Book Description

Our lives are composed of millions of choices, ranging from trivial to life-changing and momentous. Luckily, our brains have evolved a number of mental shortcuts, biases, and tricks that allow us to quickly negotiate this endless array of decisions. We don’t want to rationally deliberate every choice we make, and thanks to these cognitive rules of thumb, we don’t need to. Yet these hard-wired shortcuts, mental wonders though they may be, can also be perilous. They can distort our thinking in ways that are often invisible to us, leading us to make poor decisions, to be easy targets for manipulators…and they can even cost us our lives. The truth is, despite all the buzz about the power of gut-instinct decision-making in recent years, sometimes it’s better to stop and say, “On second thought . . .” The trick, of course, lies in knowing when to trust that instant response, and when to question it. In On Second Thought, acclaimed science writer Wray Herbert provides the first guide to achieving that balance. Drawing on real-world examples and cutting-edge research, he takes us on a fascinating, wide-ranging journey through our innate cognitive traps and tools, exposing the hidden dangers lurking in familiarity and consistency; the obstacles that keep us from accurately evaluating risk and value; the delusions that make it hard for us to accurately predict the future; the perils of the human yearning for order and simplicity; the ways our fears can color our very perceptions . . . and much more. Along the way, Herbert reveals the often-bizarre cross-connections these shortcuts have secretly ingrained in our brains, answering such questions as why jury decisions may be shaped by our ancient need for cleanliness; what the state of your desk has to do with your political preferences; why loneliness can literally make us shiver; how drawing two dots on a piece of paper can desensitize us to violence… and how the very typeface on this page is affecting your decision about whether or not to buy this book. Ultimately, On Second Thought is both a captivating exploration of the workings of the mind and an invaluable resource for anyone who wants to learn how to make smarter, better judgments every day.




How Markets Fail


Book Description

How did we get to where we are? John Cassidy shows that the roots of our most recent financial failure lie not with individuals, but with an idea - the idea that markets are inherently rational. He gives us the big picture behind the financial headlines, tracing the rise and fall of free market ideology from Adam Smith to Milton Friedman and Alan Greenspan. Full of wit, sense and, above all, a deeper understanding, How Markets Fail argues for the end of 'utopian' economics, and the beginning of a pragmatic, reality-based way of thinking. A very good history of economic thought Economist How Markets Fail offers a brilliant intellectual framework . . . fine work New York Times An essential, grittily intellectual, yet compelling guide to the financial debacle of 2009 Geordie Greig, Evening Standard A powerful argument . . . Cassidy makes a compelling case that a return to hands-off economics would be a disaster BusinessWeek This book is a well constructed, thoughtful and cogent account of how capitalism evolved to its current form Telegraph Books of the Year recommendation John Cassidy ... describe[s] that mix of insight and madness that brought the world's system to its knees FT, Book of the Year recommendation Anyone who enjoys a good read can safely embark on this tour with Cassidy as their guide . . . Like his colleague Malcolm Gladwell [at the New Yorker], Cassidy is able to lead us with beguiling lucidity through unfamiliar territory New Statesman John Cassidy has covered economics and finance at The New Yorker magazine since 1995, writing on topics ranging from Alan Greenspan to the Iraqi oil industry and English journalism. He is also now a Contributing Editor at Portfolio where he writes the monthly Economics column. Two of his articles have been nominated for National Magazine Awards: an essay on Karl Marx, which appeared in October, 1997, and an account of the death of the British weapons scientist David Kelly, which was published in December, 2003. He has previously written for Sunday Times in as well as the New York Post, where he edited the Business section and then served as the deputy editor. In 2002, Cassidy published his first book, Dot.Con. He lives in New York.




Mean Genes


Book Description

Short, sassy, and bold, Mean Genes uses a Darwinian lens to examine the issues that most deeply affect our lives: body image, money, addiction, violence, and the endless search for happiness, love, and fidelity. But Burnham and Phelan don't simply describe the connections between our genes and our behavior; they also outline steps that we can take to tame our primal instincts and so improve the quality of our lives. Why do we want (and do) so many things that are bad for us? We vow to lose those extra five pounds, put more money in the bank, and mend neglected relationships, but our attempts often end in failure. Mean Genes reveals that struggles for self-improvement are, in fact, battles against our own genes -- genes that helped our cavewoman and caveman ancestors flourish but that are selfish and out of place in the modern world. Why do we like junk food more than fruit? Why is the road to romance so rocky? Why is happiness so elusive? What drives us into debt? An investigation into the biological nature of temptation and the struggle for control, Mean Genes answers these and other fundamental questions about human nature while giving us an edge to lead more satisfying lives.




More Than You Know


Book Description

Since its first publication, Michael J. Mauboussin's popular guide to wise investing has been translated into eight languages and has been named best business book by BusinessWeek and best economics book by Strategy+Business. Now updated to reflect current research and expanded to include new chapters on investment philosophy, psychology, and strategy and science as they pertain to money management, this volume is more than ever the best chance to know more than the average investor. Offering invaluable tools to better understand the concepts of choice and risk, More Than You Know is a unique blend of practical advice and sound theory, sampling from a wide variety of sources and disciplines. Mauboussin builds on the ideas of visionaries, including Warren Buffett and E. O. Wilson, but also finds wisdom in a broad and deep range of fields, such as casino gambling, horse racing, psychology, and evolutionary biology. He analyzes the strategies of poker experts David Sklansky and Puggy Pearson and pinpoints parallels between mate selection in guppies and stock market booms. For this edition, Mauboussin includes fresh thoughts on human cognition, management assessment, game theory, the role of intuition, and the mechanisms driving the market's mood swings, and explains what these topics tell us about smart investing. More Than You Know is written with the professional investor in mind but extends far beyond the world of economics and finance. Mauboussin groups his essays into four parts-Investment Philosophy, Psychology of Investing, Innovation and Competitive Strategy, and Science and Complexity Theory-and he includes substantial references for further reading. A true eye-opener, More Than You Know shows how a multidisciplinary approach that pays close attention to process and the psychology of decision making offers the best chance for long-term financial results.




Antisocial


Book Description

From a rising star at The New Yorker comes a deeply immersive chronicle of how the optimistic entrepreneurs of Silicon Valley set out to create a free and democratic internet--and how the cynical propagandists of the alt-right exploited that freedom to propel the extreme into the mainstream.ream.




The Rational Animal


Book Description

Why do three out of four professional football players go bankrupt? How can illiterate jungle dwellers pass a test that tricks Harvard philosophers? And why do billionaires work so hard—only to give their hard-earned money away? When it comes to making decisions, the classic view is that humans are eminently rational. But growing evidence suggests instead that our choices are often irrational, biased, and occasionally even moronic. Which view is right—or is there another possibility? In this animated tour of the inner workings of the mind, psychologist Douglas T. Kenrick and business professor Vladas Griskevicius challenge the prevailing views of decision making, and present a new alternative grounded in evolutionary science. By connecting our modern behaviors to their ancestral roots, they reveal that underneath our seemingly foolish tendencies is an exceptionally wise system of decision making. From investing money to choosing a job, from buying a car to choosing a romantic partner, our choices are driven by deep-seated evolutionary goals. Because each of us has multiple evolutionary goals, though, new research reveals something radical—there’s more than one “you” making decisions. Although it feels as if there is just one single “self” inside your head, your mind actually contains several different subselves, each one steering you in a different direction when it takes its turn at the controls. The Rational Animal will transform the way you think about decision making. And along the way, you’ll discover the intimate connections between ovulating strippers, Wall Street financiers, testosterone-crazed skateboarders, Steve Jobs, Elvis Presley, and you.




Far from Random


Book Description

Since Burton Malkiel’s seminal work A Random Walk Down Wall Street was published, the financial world has swallowed whole the idea that market movement is chaotic and random. In Far from Random, Richard Lehman uses behavior-based trend analysis to debunk Malkiel’s random walk theory. Lehman demonstrates that the market has discernible trends that are foreseeable. By learning to spot these trends, investors and traders can predict market movement to boost returns in anything from equities to 401(k) accounts. Richard Lehman has been a financial professional for more than thirty years. He studied the first iterations of behavioral finance back in the 1970s as a financial marketer and has since worked in various facets of the financial industry. His early introduction to behavioral finance and the more recent introduction to trend analysis led him to this important discovery.