Behavioural Finance: Insights into Irrational Minds and Markets [Hardcover]

James Montier (Author)

Book Description

ISBN-10: 0470844876 | ISBN-13: 978-0470844878 | Publication Date: October 15, 2002 | Edition: 1

A concrete guide that links the theory of behavioral finance with applications in financial products
Behavioral finance is a rapidly expanding field, with major implications for the way in which the investment process is conducted. Behavioural Finance links the concepts of behavioral finance to measurable variables and smarter investment decision making. Comprehensive coverage relating theory to practical investment analysis provides a usable, practical guide for real-world situations.

Editorial Reviews

Review

"...The finding is surprising, as the City is notoriously full of arrogant young men betting on financial markets…Mr Montier has unearthed bizarre facts which suggest stock markets are frequently driven by entirely irrational factors..." (The Daily Telegraph 25 November 2002)

"...In a new book, James Montier…outlines practical methods for exploiting the anomalies thrown up by behavioural finance..." (Financial Times, 25 November 2002)

"…a good introduction to this subject…." (Professional Investor, March 2003)

From the Inside Flap

Behavioural finance starts with the simple belief that in the 'real world' investors are not rational. Based on many years experience, James Montier provides practical yet rigorous coverage of this emerging science, providing insights into the irrational nature of investment decisions. Behavioural Finance: Insights into Irrational Minds and Markets is essential reading for fund managers, strategists, asset allocators, portfolio constructors, corporate financiers and analysts. It is also suitable for MBAs and students studying finance and investment management.

See all Editorial Reviews

Product Details

• Hardcover: 193 pages
• Publisher: Wiley; 1 edition (October 15, 2002)
• Language: English
• ISBN-10: 0470844876
• ISBN-13: 978-0470844878
• Product Dimensions: 9.7 x 6.8 x 0.8 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (4 customer reviews)
• Amazon Best Sellers Rank: #920,984 in Books (See Top 100 in Books)

More About the Author

James Montier is a member of GMO's asset allocation team. Prior to that, he was the co-Head of Global Strategy at Société Générale and has been the top-rated strategist in the annual Thomson Extel survey for most of the last decade. Montier is the author of three market-leading books, Behavioral Finance: Insights into Irrational Minds and Markets, Behavioral Investing: A Practitioners Guide to Applying Behavioral Finance, and Value Investing: Tools and Techniques for Intelligent Investment. He is a Visiting Fellow at the University of Durham and a Fellow of the Royal Society of Arts. Montier has been described as a maverick, an iconoclast, and an enfant terrible by the press.

Customer Reviews

Most Helpful Customer Reviews

24 of 26 people found the following review helpful:

3.0 out of 5 stars Okay for a quick read but too brief to be impressive or useful, September 7, 2005

By 

ServantofGod - See all my reviews

This review is from: Behavioural Finance: Insights into Irrational Minds and Markets (Hardcover)

Perhaps it's the author's intent to make the book as concise but informative as possible that it became a highly concentrated dose of investment psychology and empirical stuff not easily digestable for rookies or even veterans without a strong academic background on finance. For example, he had covered in the 28 page first chapter, psychology theories (with source reference, and simple background/statistics info/support) including over-confidence, over-optimissim, cognitive dissonance, confirmation bias, conservatism bias, anchoring, representativeness heuristic, availability bias, ambiguity aversion, frame dependence/mental accounting, utility theory (dynamic) prospect theory etc. Do you get what I mean?

IMHO, this book can serve as a recap for advanced traders who understand well basic financial concepts including Efficient Market Hypothesis and it's offsprings like CAPM, and can read statistics and essays with ease. For novices, "Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing" by Hersh Shefrin and "The psychology of Finance by Lars Tvede" should be better choices.

p.s. The conclusions in the end of each chapter are well written, I must add. However, I cant say there are significant correlation between individual chapters.

11 of 12 people found the following review helpful:

3.0 out of 5 stars Summary of Behavioral Finance Studies, August 8, 2005

By 

Brian Lomax (Short Hills, NJ) - See all my reviews
(REAL NAME)   

This review is from: Behavioural Finance: Insights into Irrational Minds and Markets (Hardcover)

This book summarizes the findings of numerous behavioral finance pundits. The author starts with a brief review of pertinent psychology and then addresses topics pertaining to asset management, security analysis and corporate finance. The chapters are broken into small capsules to explain study results on specific topics. I found the subject material interesting but would have liked more detail on how to apply the study findings.

4 of 7 people found the following review helpful:

5.0 out of 5 stars This Is My Financial Bible, November 7, 2006

By 

Jim Risser "kavajava.com" (Honolulu, HI USA) - See all my reviews

This review is from: Behavioural Finance: Insights into Irrational Minds and Markets (Hardcover)

This book is jammed packed with lots of information. I'm on my third read of it. It's hard to understand for a novice like myself, but with each subsequent read, I pick up more information. Plus, there's a lenghty bibliography where you can find references to more in-depth research.

For anyone who is a student of finance and wants practical, research proven information, this is the book for you!