Behavioural Finance: Insights into Irrational Minds and Markets (Hardcover)

~ (Author) "People make mistakes when they invest..." (more)
Key Phrases: capital structure preferences, parent company puzzle, implied equity risk premium, Data Source, Thomson Datastream, Royal Dutch (more...)

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)

Product Description

"In his splendid handbook for institutional investors, James Montier combines the insights he has gained as a practitioner, with the insights he has gleaned reading the academic literature in behavioural finance. Most importantly, Montier identifies key lessons to help institutional investors mitigate their susceptibility to psychologically-induced errors and biases". Professor Hersh M. Shefrin, Leavey School of Business & Administration, Santa Clara, University

"Behavioural Finance is unique in combining in a practical way the insights of a very experienced investment practitioner with a very readable review of what the research evidence tells us. This book is essential reading for all serious students of market behaviour and any investor wanting to know how behavioural finance can be used to enhance investment returns". Professor Richard Taffler, Head of Finance and Accounting, Cranfield School of Management, UK

"Behavioural finance abandons the assumptions of investor rationality and suggests that people do make mistakes in a consistent and predictable manner. Investors need to understand the herd if they want to make sense and profit from today's markets. James Montier's accessible book soundly guides the reader from behavioural finance theory to application. Don't grapple with the academic literature - just read Montier". Christian E Elsmark, Investment Director, JPMorgan Fleming Asset Management

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Product Details

• Hardcover: 193 pages
• Publisher: Wiley (October 15, 2002)
• Language: English
• ISBN-10: 0470844876
• ISBN-13: 978-0470844878
• Product Dimensions: 9.6 x 6.8 x 0.8 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (3 customer reviews)
• Amazon.com Sales Rank: #208,945 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

21 of 23 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 (TOP 500 REVIEWER)

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.

10 of 11 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 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.

3 of 6 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 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!