Customer Reviews

Psychology and the Stock Market: Investment Strategy Beyond Random Walk

5 star:		(1)
4 star:		(1)
3 star:		(0)
2 star:		(0)
1 star:		(0)

 

 

"To be a good investor, first you have to Know Thyself!" Here's the book on Psychology that I feel is a necessary part of developing a proper Contrarian attitude! From Tulips to Turtle Bay, from Merchant Ships to Market Timers Mr. Dreman tells the tales of market speculation and zealous investing.

Your reading it doesn't require a degree in Psychology. The book will help you understand just what the true meaning of Fear and Greed are, relative to investing. From that basis Mr. Dreman then gives some suggestions on value and contrarian investing. The stories told will look somewhat familiar to the investor that's been through a couple of market cycles. He does a great job of describing the giddy feeling we get in a raging bull market and the gut wrenching agony of a Kodiak Bear's mauling.

A couple of mutual funds now carry the Dreman name. This adds a bit of weight to how important contrarian investing really is. It is very easy to lose sight of reality when the market is either in a strong bull or bear phase. Having guideposts along the way helps to keep our exuberance rational! This book is as important to read as any on investing.

There are a million books out there that teach investors how to price stocks. This tome instructs the investor to heed investor psychology. Investor psychology (e.g. emotion) is the biggest determinant of stock prices and Dreman makes a clear case for this in his book. Why is McDonald's, a marketing powerhouse with sub-par food, worth billions? Irrational exburence, maybe? Reading this book will tell you why