The Psychology of Money: An Investment Manager's Guide to Beating the Market (Wiley Finance) (Hardcover)

by Jim Ware (Author)
Key Phrases: master investors, investment masters, eight traits, Open Space, Wall Street, Warren Buffett (more...)

Editorial Reviews

Review
"The Psychology of Money is a well-written and entertaining book that challenges money managers and individual investors to rethink their view of the investment decision-making process."(Financial Analysts Journal)

"This book should be read by everyone!" (Mimi Lord, Morningstar Senior Editor)

"This book should be read by everyone!" -- Mimi Lord, Morningstar Senior Editor

Product Description
Discover the Ideal Investment Strategy for Yourself and Your Clients

"To enhance investment results and boost creativity, Jim Ware replaces the maxim know your investments with know yourself. And he gives us specific testing tools to do the job."–Dean LeBaron, Founder, Batterymarch Financial Management, Chairman, Virtualquest.company, and investment author and commentator

"Many investment firms fail, even though they are run by intelligent, qualified professionals, because they lack creativity. This book can rescue you. Jim Ware explains how to organize your business to encourage creative thinking. In five years, your customers will be working with an advisor who read this book, so make sure you are the one who did."–Ralph Wanger, President, Acorn Investment Trust, CFA and author of A Zebra in Lion Country: Ralph Wanger’s Guide to Investment Survival

"Jim Ware has a great knack for understanding people and successful investing. This unusual combination of skills creates a rare find: useful insights to improve investment performance through helping people work together better. Jim’s wit and humor make this a fun read as well!"–Dee Even, Senior Investment Officer, Allstate Insurance Company, Property & Casualty

"The Psychology of Money represents a major step toward development of a portfolio theory that recognizes human dynamics and differences among people. Jim’s content is solid, and his presentation is engaging. This book ought to be on every practitioner’s bookshelf."–Kenneth O. Doyle, University of Minnesota, Author, The Social Meanings of Money and Property: In Search of a Talisman

"Finally, an insightful look at the human side of investing. A step-by-step guide to enhancing management performance to increase returns."– Abbie Smith, PhD, Professor of Accounting.University of Chicago Business School

See all Editorial Reviews

Product Details

• Hardcover: 272 pages
• Publisher: Wiley; 1 edition (December 8, 2000)
• Language: English
• ISBN-10: 0471390747
• ISBN-13: 978-0471390749
• Product Dimensions: 9.3 x 6.3 x 1 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars See all reviews (8 customer reviews)
• Amazon.com Sales Rank: #1,234,872 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

3 of 3 people found the following review helpful:

1.0 out of 5 stars Not very useful, May 2, 2001

By	Brian Schmud (Manhattan, New York) - See all my reviews

After reading Mr. Ware's book, I found his writing style to be witty and concise. However, his book is not at all practical or useful as an investment guide. As a professional money manager, I didn't think that the book had good enough concepts in it to warrant "Beating the Market". Definitely not in the same class as, say, Warren Buffett's annual reports and his letters to the shareholders of Berkshire Hathaway.

I seriously doubt that applying the concepts in this book will be helpful in "beating the market", especially the S&P 500 index, which has consistently beaten approximately 80% of all actively-managed mutual funds.

This book makes a nice attempt at relating psychology to finance but falls short, in my opinion, by falling back into common sense generalities that should already be known, without having to read this book, by those hoping to profit in the markets.

2 of 2 people found the following review helpful:

1.0 out of 5 stars Fluffer Nutter Wisdom - Lacks Practical Advice, July 1, 2002

By	J. Milman, PhD (Chicago, IL USA) - See all my reviews

This book does not stand out in any fashion other than as a forum for the author to show off his anecdotal tales of philosophy and finance.

I found nothing concrete to implement for my investment style. And the exercises to expand my "mental boundries" for unique thinking, seemed like rehashed, rhetorical self-help.

There was little correlation between the title and the content; again reminding us that one should not judge a book by it's cover.

2 of 2 people found the following review helpful:

5.0 out of 5 stars Managing money? This one will help you by ..., April 30, 2001

By	Rats "tusitala" (Milano, MI Italy) - See all my reviews

... making you aware of your own/your clients' biases and giving you practical tools to defuse them. Specifically, by way of example, money managers (I am one) will learn to:

- recognize their own typical behavior, or that of colleagues or clients, as belonging to one of several psychological types ... - thereby stopping short of saying/doing stupid things and also circumventing problems at the workplace; - identify actions that will boost behavior that you or your firm seem to lack: creativity, focus, a will to use analytical skills, etc; - identify industry mantras ("team approach", etc) for what they are or identify actions that transform a mantra into action

Overall, I agree with the other reviewers that this book is a surprise, a very positive one. Basically it convinced me that every money manager should have, packed with his/her baggage of technical skills and intelligence (standard and "emotional"), also some psychological training. This book goes some way towards such education.

I am uncomfortable with a couple of Ware's ideas, particularly the "listen to intuition" advice towards the end of the book. As an "owl" I would be inclined to say this, but basically I met too many fakers who would justify rash investment moves only on intuition and long-running experience, lose money or fail to recognize the moment to take profit, and never talk about it afterwards. Intuition may come before analysis, but if it cannot be supported by reasoning I don't see that it should be followed; as a matter of practice you won't be able to anyway, because first you have to sell it to clients, team members, or bosses, and you won't.

But stars measure how good is the book, not how much I agree with it, and this one is great. I'm serious, buy it. Even more so if you don't believe in the psych stuff: do violence unto yourself, buy it now and read it, you'll need it more than others do.