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The Nature of Risk (Fraser Publishing Library) (Contrary Opinion Library) Paperback – November 19, 1999
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Top Customer Reviews
An extremely important work, particularly for the investor who is plagued by doubt, confusion, and anxiety.
The amateurs miss the point. This is not about the best stochastic settings or how to massage the bid and the ask. This is about facing up to the very real risks inherent in the financial markets, including the very real risk of financial ruin. Amateurs don't see the risk; therefore, they don't bother to grapple with it. Instead, they would rather blow up and disappear. If one wants to last, he must come to terms with the nature of risk, his own tolerance for risk, an understanding of how to manage risk. Without that, he's doomed.
An informed decision would seem to be a sound one. It may very well be, yet in the context of the market, as information risk diminishes (more knowledge is gained about a particular investment), the price risk will increase (assuming positive news results in a rising stock price). Once an investment is deemed to be solid and secure, the existing information will already be reflected in the price of the equity and the potential for appreciation becomes much more limited (price risk increases). The art of balancing information risk and price risk is a central theme of the book, which is discussed, in intricate detail. Also discussed are methods of determining when price risk is likely to be at an absolute minimum -- all news surrounding a company is bad, and no matter how much more bad news comes out the price does not decline further. An interesting "head and shoulders" method of timing the market is presented as well.
Whether it's embarking on a new career, investing for a quick hit, or retirement, taking a new job, signing an agreement or contract, making a new purchase, or getting married, all of life's decisions involve the same basic tradeoff between information risk and anticipated benefits (price risk). The author discusses not only the stock market and investing, but presents mental models from various situations, which most anyone has experienced, and can relate to in some form.
If you are interested in learning about the psychology of the market, or simply exploring and seeking to better understand your own decision making process better, buy this book. It is truly a book about risk, and not one of the over-hyped books blathering on about the stock market
In-fact, I have given his other books, When to Buy and How to Sell the Five Star ratings as they are very useful and well written.
However, after reading those, this book seems to repeat some of the points made in them and seems a little defensive about Technical Analysis. Avoid this one but positively buy the other two.
Most Recent Customer Reviews
Arrived on time ,and in good condition.
Good buy,worth the money.
This book was listed as Very Good with some shelf wear. It should have been rated NEW and EXCELLENT! What a modest company. They Rock!Published 19 months ago by Syngen
In a sentence, this book belabors the point you can't let yourself get paralyzed and you have to make a decision. Read morePublished on June 11, 2013 by Robert Zaleski
Is a strange stock market book, but great. The idea that information risk is inversely correlated to price risk is just a fair description of reality. Read morePublished on October 21, 2011 by Hugo
This should be one of the first books that any trader reads. I can understand why it isn't. It doesn't have the mind-blowing rags to riches power plots that attract the masses,... Read morePublished on January 11, 2010 by DK
I can't put the book down. Mr. Mamis' thoughts are unique and exquisitely thought-provoking. He is invaluable in illuminating the self-examination necessary in my work as an... Read morePublished on July 17, 2009 by Arlen
I was surprised to see a couple of reviews calling this book psycho-babble. Those criticisms seem off the mark to me. Read morePublished on January 22, 2009 by Leisa
Justin Mamis talks about risk and knows what he is talking about! He describes different types of risk, like information risk or price risk. Read morePublished on June 13, 2008 by Chris Jaronsky
If you are going to buy one of his books, get "When to Sell". This one was long, wordy, and tough to read the whole thing - looking for content. Lots of fluff. Read morePublished on September 8, 2001