This volume looks at how investors can rethink their learning about investments. The author argues that many investors are inadvertently building their portfolios on shaky foundations, based on preconceived notions about the markets, misleading and exploitative information and a lack of knowledge and understanding. This book aims to help readers recognize where the dangers are and how to avoid making costly mistakes. Despite claims that the stock market is efficient and rational, Cunningham asserts that investors actually operate in a world that is full of messy decision-making. In fact, emotions, biases and behaviour all play an equal role with cold analysis and probability theory. Loss aversion, frame dependence and probabilities combine to make investing a challenging undertaking. In order to succeed, investors must outsmart the "big money" and become smart investors themselves. The first challenge is overcoming the biases and misconceptions that shape them. Cunningham shows that behavioural baggage often means that investors are actually drawn toward opportunities that exploit them. Because of that, it is easy for insiders and "the smart money" to take advantage of investors. Cunningham explains why it is important for investors to understand the biases that put them at a disadvantage. He shows how investors can learn to avoid succumbing to the spin in various business and financial reports. And, he reveals how important it is to wake up to market inefficiency and how this inefficiency is exploited by financial professionals. In doing so, he aims to give readers the tools they need to think for themselves and invest for the long term. This book provides a useful source for learning about the behavioural forces and cognitive biases that affect investment strategy.
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A sophisticated investor’s guide to turning to their advantage various personal biases, misleading information, and market inefficiencies to outsmart the pros
? Explanation of the ways in which behavior makes markets inefficient
? How to recognize individual biases that may impede successful investing
? Understanding the dangers of benchmarking
? How to avoid being cheated by money managers
? How to play “the numbers game” to your advantage
? How to spot the associated risks of margin trading and market bubbles
? What to do during times of market mania
Forget Almost Everything You've Ever Learned About Investing...
Most investorsdespite the fact their hard-earned savings are on the linefall victim to human nature and bet their financial futures on hot tips, headlines, and Wall Street spin. Outsmarting the Smart Money instead provides investors with authoritative insights and hands-on lessons for moving beyond emotions and unreliable guesswork to build a portfolio based on market-proven strategies, simple-to-understand analytical techniques, and a history of long-term performance.
Praise for Outsmarting the Smart Money...
"Individuals too often focus exclusively on the mechanics of investing without considering the mistakes that occur from emotional, but predictable, missteps. Larry Cunningham has done a great service by explaining the psychology of investing in clear and easy to understand principles."Robert G. Hagstrom, CFA, Senior Vice President, Legg Mason Funds Management; Author, The Warren Buffett Way
"This book is a fascinating account of market psychology, of how professionals lose their shirts because of it, and of how a small investor can profit from it. A fun, useful and readable book."Andrei Shleifer, Professor of Economics, Harvard University; Author, Inefficient Markets
"Outsmarting the Smart Money reveals the many foibles of today's markets, and provides sound strategies the typical investor should pursue to achieve security and profits."James D. Cox, Brainerd Currie Professor of Law, Duke University
"An exploration of the ways our psyches play financial tricks on us, Outsmarting the Smart Money will return its cost many times over."Gary Belsky, Author, Why Smart People Make Big Money MistakesAnd How to Correct Them
"Lucid guidance for investors dealing with the post-bubble investment world, while also preparing them for the next period of irrational exuberance."Steve Galbraith, U.S. Equity Strategist, Morgan Stanley
"We have met the enemy, and he is us."Walt Kelly's Pogo
Like it or not, most investors are their own worst enemies. They buy only when glowing reports and rumors have bid stocks to outlandish, unsupported price levels; sell only when bad news has left stock prices at or near their bottoms; and ignore reams of independent research and data to bet thousands of dollars on a coworker's hot stock tip.
Is it any wonder that stock investing, which should represent one of the easiest and most straightforward paths to long-term wealth, has instead become a hotbed of wasted hours, lost opportunities, and outright misery?
Lawrence Cunningham's Outsmarting the Smart Money outlines where most investors go wrong and explains how to approach the markets with self-knowledge, intelligence and, most of all, calm. It examines the cognitive biases that afflict most investors, discusses how professional money managers are trained to take advantage of these biases (and the pricing inefficiencies that regularly result), and reveals how investors can help themselves by steering clear of the "smart money" to adopt a long-term, value-oriented investment philosophy.
Outsmarting the Smart Money offers you dozens of easy-to-follow tips and techniques for investing both sensibly and successfully, including:
Thousands of books promise to tell you how to beat the markets by grabbing the low-hanging fruit of fast turnaround profits. But only Outsmarting the Smart Money tells you the truththat long-term investment success requires time, self-knowledge, and discipline. Follow its simple step-by-step program to become a more intelligent investor, and construct a sensible long-term portfolio that is solidly constructed, easy to manage, and virtually certaingiven timeto grow into a sizable fortune.
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Book Description McGraw-Hill, 2002. Hardcover. Book Condition: New. 1. Bookseller Inventory # DADAX0071386998
Book Description McGraw-Hill, 2002. Hardcover. Book Condition: New. New item. Bookseller Inventory # QX-003-89-0187000
Book Description Book Condition: Brand New. Book Condition: Brand New. Bookseller Inventory # 97800713869991.0