Beyond Greed and Fear Understanding Behavioral Finance and the Psychology of Investing

Author: Hersh Shefrin
Publisher: Oxford University Press
ISBN: 9780195304213
Published In: June 2007
Format: Paperback , 402 pages
Jurisdiction: International ? Disclaimer:
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Description
Contents
Author
Reviews

Details
- Shows how psychology applies to financial decision-making and behaviour of markets
- A must-read for investors in understanding how advisors and asset managers make decisions and what pitfalls are involved
- Helps readers avoid personal mistakes in decision-making
This book provides a comprehensive treatment of behavioural finance. With the use of the latest psychological research, Shefrin helps us to understand the human behaviour that guides stock selection, financial services, and corporate financial strategy. He argues that financial practitioners must acknowledge and understand behavioural finance - the application of psychology to financial behaviour - in order to avoid many of the investment pitfalls caused by human error. Shefrin points out the common but costly mistakes that money managers, security analysts, financial planners, investment bankers, and corporate leaders make, so that readers gain valuable insights into their own financial decisions and those of their employees, asset managers, and advisors.

Readership: Portfolio managers, analysts, financial advisors, students of finance and investments
Preface
Part I: What Is Behavioral Finance
1: Introduction
2: Heuristic-Driven Bias: The First Theme
3: Frame Dependence: The Second Theme
4: Inefficient Markets: The Third Theme
Part II: Prediction
5: Trying to Predict the Market
6: Sentimental Journey: The Illusion of Validity
7: Picking Stocks to Beat the Market
8: Biased Reactions to Earnings Announcements
Part III: Individual Investors
9: "Get-Evenitis": Riding Losers Too Long
10: Portfolios, Pyramids, Emotions, and Biases
11: Retirement Saving: Myopia and Self-Control
Part IV: Institutional Investors
12: Open-Ended Mutual Funds: Misframing, "Hot Hands", and Obfuscation Games
13: Closed-End Funds: What Drives Discounts?
14: Fixed Income Securities: The Full Measure of Behavioral Phenomena
15: The Money Management Industry: Framing Effects, Style "Diversification", and Regret
Part V: The Interface between Corporate Finance and Investment
16: Corporate Takeovers and the Winner's Curse
17: IPOs: Initial Underpricing, Long-term Underperformance, and "Hot-Issue" Markets
18: Optimism in Analysts' Earnings Predictions and Stock Recommendations
Part VI: Options, Futures, and Foreign Exchange
19: Options: How They're Used, How They're Priced, and How They Reflect Sentiment
20: Commodity Futures: Orange Juice and Sentiment
21: Excessive Speculation in Foreign Exchange Markets
Final Remarks
Notes
References
Credits
Index
Hersh Shefrin, Mario L. Belotti Chair in Finance at Leavey School of Business, Santa Clara University, USA
""This refreshingly iconoclastic book awakens us all to how little we know about financial markets, and how much we have to discover. I particularly enjoyed the reference to the emperor's clothes worn by the mutual fund industry. Shefrin's clear reaffirmation of the fallibility of professional investors will lead even the most impressionable of investors to consider, yet again, the advantages of market indexing strategies."--John Bogle, Founder and Senior Chairman, The Vanguard Group, and author, Common Sense on Mutual Funds"

""This book helps readers recognize, and avoid, bias and errors in their financial decisions, and modify and, it is hoped, improve their overall investment strategies." JP Morgan Private Bank Annual Summer Reading List."

""Behavioral finance is about normal people and the markets that drive them crazy. Shefrin's insights into these people and markets will provide you with solutions to many financial puzzles--as you read the book and long after you close it."--Meir Statman, Glenn Klimek Professor of Finance, Leavey School of Business, Santa Clara University"

""Beyond Greed and Fear challenges your most fundamental assumptions about investing and uncovers psychological traps that may prevent you from achieving higher returns on your portfolio."--Martin S. Fridson, Managing Director, Merrill Lynch & Co., and author, How to Be a Billionaire"

""Shefrin synthesizes a wealth of research and observations about human behavior and financial anomalies into a broad and deep perspective on financial markets. No other book so splendidly lays out the fundamentals of behavioral finance."--Robert Shiller, Stanley B. Resor Professor of Economics, Cowles Foundation for Research in Economics, Yale University"

""Beyond Greed and Fear is the first truly comprehensive behavioral finance book written for practitioners. It should be required reading for portfolio managers and traders."--W. Van Harlow III, President and CIO, Strategic Advisors, Fidelity Investments"

""Most books about financial markets overlook the human element--a serious omission since people matter on Wall Street as well as on Main Street. Beyond Greed and Fear is a fine examination of the budding field of behavioral finance. I recommend it to anyone who intends to trade with other human beings, or who is a human being."--Richard H. Thaler, Robert P. Gwinn Professor of Behavioral Science and Economics, Graduate School of Business, University of Chicago"

""Financial practitioners, argues the author, must acknowledege and understand behavioral finance in order to avoid many of the investment pitfalls caused by human error.--Business Horizons"

""One edition of this work should be in every investment collection"--CHOICE, H. Mayo"