Beyond Greed And Fear

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 really influences the decision-making process, Hersh Shefrin uses the latest psychological research to help us understand the human behavior that guides stock selection, financial services, and corporate financial strategy. Shefrin argues that financial practitioners must acknowledge and understand behavioral finance--the application of psychology to financial behavior--in order to avoid many of the investment pitfalls caused by human error. Through colorful, often humorous real-world examples, 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. According to Shefrin, the financial community ignores the psychology of investing at its own peril. Beyond Greed and Fear illuminates behavioral finance for today's investor. It will help practitioners to recognize--and avoid--bias and errors in their decisions, and to modify and improve their overall investment strategies.

A supplement for undergraduate and graduate Investments courses. See the decision-making process behind investments. The Psychology of Investing is the first text of its kind to delve into the fascinating subject of how psychology affects investing. Its unique coverage describes how investors actually behave, the reasons and causes of that behavior, why the behavior hurts their wealth, and what they can do about it. Features: What really moves the market: Understanding the psychological aspects. Traditional finance texts focus on developing the tools that investors use for calculating risk and return. The Psychology of Investing is one of the first texts to delve into how psychology affects investing rather than solely focusing on traditional financial theory. This text’s material, however, does not replace traditional investment textbooks but complements them, helping students become better informed investors who understand what motivates the market. Keep learning consistent: Most of the chapters are organized in a similar succession. This approach adheres to following order: -A psychological bias is described and illustrated with everyday behavior -The effect of the bias on investment decisions is explained -Academic studies are used to show why investors need to remedy the problem Growing with the subject matter: Current and fresh information. Because data on investor psychology is rapidly increasing, the fifth edition contains many new additions to keep students up-to-date. The new Chapter 12: Psychology in the Mortgage Crisis describes the psychology involved in the mortgage industry and ensuing financial crisis. New sections and sub-sections include “Buying Back Stock Previously Sold”, “Who Is Overconfident,” "Nature or Nurture?”, "Preferred Risk Habitat," "Market Impacts," "Language," and “Reference Point Adaptation.”

Long before the financial meltdown and the red alert on climate change, some far-sighted innovators diagnosed the fatal flaws in an economic system driven by greed and fear. Across the global North and South, diverse people - financial wizards, economists, business people and social activists - have been challenging the "free market" orthodoxy. They seek to recover the virtues of bazaars from the tyranny of a market model that emerged about two centuries ago. This widely praised book is a chronicle of their achievements. From Wall Street icon George Soros and VISA card designer Dee Hock we get an insider critique of the malaise. Creators of community currencies and others, like the father of microfinance, Bangladesh's Muhammad Yunus, explore how money can work differently. The doctrine of self-interest is re-examined by looking more closely at Adam Smith through the eyes of Amartya Sen. Mahatma Gandhi's concept of 'Trusteeship' gathers strength as the socially responsible investing phenomenon challenges the power of capital. Pioneers of the open source and free software movement thrive on cooperation to drive innovation. The Dalai Lama and Ela Bhatt demonstrate that it is possible to compete compassionately and to nurture a more mindful market culture. This sweeping narrative takes you from the ancient Greek agora, Indian choupal, and Native American gift culture, on to present-day Wall Street to illuminate ideas, subversive and prudent, about how the market can serve society rather than being its master. In a world exhausted by dogma, Bazaars, Conversations and Freedom is an open quest for possible futures. This fully updated and revised UK version of the 2009 Vodafone Crossword Book Award winner for non-fiction is a rare and epic narrative about those who have been quietly forging solutions and demonstrating that a more compassionate market culture is both possible and desirable.

Behavioral finance is the study of how psychology affects financial decision making and financial markets. It is increasingly becoming the common way of understanding investor behavior and stock market activity. Incorporating the latest research and theory, Shefrin offers both a strong theory and efficient empirical tools that address derivatives, fixed income securities, mean-variance efficient portfolios, and the market portfolio. The book provides a series of examples to illustrate the theory. The second edition continues the tradition of the first edition by being the one and only book to focus completely on how behavioral finance principles affect asset pricing, now with its theory deepened and enriched by a plethora of research since the first edition

The bestselling author of Beyond Greed and Fear puts behavioral concepts into corporate practice Psychologically smart companies manage both the pluses and minuses of human psychology through well-structured systems and processes. In Ending the Management Illusion, behavioral finance pioneer Hersh Shefrin addresses the biases that can take you or your organization off course and shows how to run psychologically smart businesses-specifically as it affects your bottom line. Shefrin explores the psychological barriers you experience, and delivers concrete debiasing techniques for breaking through these barriers. This allows you to integrate your processes for accounting, planning, incentives, and information sharing-the main elements for optimizing corporate value.

The psychological dimension of managing risk is of crucial importance, and its study has led to the identification of specific do's and don'ts. Those with an understanding of the psychology underlying risk and the skills to recognize its manifestation in practice, have the opportunity to develop frameworks that embody the do's and don'ts, thereby producing sound judgments and good decisions. Those lacking the understanding and the skills are destined to be more hit and miss in their approach to risk management, doing the don'ts and not doing the do's. Virtually every major risk management catastrophe in the last fifteen years has psychological pitfalls at its root. The list of catastrophes includes the 2008 bankruptcy of Lehman Brothers and subsequent global financial crisis, the 2010 explosion at BP's Macondo well in the Gulf of Mexico and the 2011 nuclear meltdown at the Fukushima Daiichi power plant. A critical lesson from psychological studies for those involved in risk management is that people's judgments and decisions about risk vary with type of circumstance. In Behavioral Risk Management readers will learn that there are specific actions that organizations can undertake to incorporate understanding, recognition, and behavioral interventions into the practice of risk management. There are many examples throughout the book that illustrate doing the don'ts. The chapters in the first part of the book introduce the main ideas, and the chapters in the latter part provide insight into how to apply those ideas to the practical world in which risk managers operate.

Protect and grow your finances with help from this definitive and practical guide to behavioral economics—revised and updated to reflect new economic realities. In their fascinating investigation of the ways we handle money, Gary Belsky and Thomas Gilovich reveal the psychological forces—the patterns of thinking and decision making—behind seemingly irrational behavior. They explain why so many otherwise savvy people make foolish financial choices: why investors are too quick to sell winning stocks and too slow to sell losing shares, why home sellers leave money on the table and home buyers don’t get the biggest bang for their buck, why borrowers pay too much credit card interest and savers can’t sock away as much as they’d like, and why so many of us can’t control our spending. Focusing on the decisions we make every day, Belsky and Gilovich provide invaluable guidance for avoiding the financial faux pas that can cost thousands of dollars each year. Filled with fresh insight; practical advice; and lively, illustrative anecdotes, this book gives you the tools you need to harness the powerful science of behavioral economics in any financial environment.

For fifteen years the bull has wrestled the bear into submission. But I am convinced that the bear's time will come. This century began with a bear market, which started in December of 1899 and hit bottom in June 1900, and it could very well end with one too. -- Andrew SarlosNorth Americans are frenetic about stocks, convinced the markets have nowhere to go but up. Each month, more and more novice investors pull their money out of stagnant bank accounts and low-interest GICs and plough them into mutual funds and similar investments. No one wants to be left out in the cold.As we approach the end of the twentieth century, the stock markets are enjoying an unprecedented period of growth and prosperity. Since the start of this most recent bull market, the Dow Jones Industrial Average has recorded an extraordinary 800 per cent gain. In just two short years, it has smashed through the 4000, 5000, 6000 and 7000 barriers. But the market is increasingly volatile, swinging up and down from week to week.In Fear, Greed and the End of the Rainbow, Andrew Sarlos sounds a prescient alarm. History tells us, he says, that the market is based on a cycle of upswings and downswings, and that now the market is about to turn once again. By examining statistical data such as history and market trends, Sarlos makes a convincing argument for a coming market correction of immense proportions. He predicts this inevitable bear market will last into the next millennium.Those lucky enough to heed Sarlos's warnings, however, will be able to avoid what could be the biggest mistake of their investment careers. By protecting your money and preparing for the future, Sarlos shows you how not only tosurvive, but to prosper through the next stock market crash.Fear, Greed and the End of the Rainbow is arguably one of the best financial books of the late 20th century.... -- Quill & Quire...a provocative, immensely readable book. It's an essential for every investor. -- Quill &QuireSarlos' book is level-headed and thoroughly researched. -- Maclean's magazine