The Little Book of Behavioral Investing: How not to be your own worst enemy (Little Book, Big Profits)

Bias, emotion, and overconfidence are just three of the many behavioral traits that can lead investors to lose money or achieve lower returns. Behavioral finance, which recognizes that there is a psychological element to all investor decision-making, can help you overcome this obstacle.

In The Little Book of Behavioral Investing, expert James Montier takes you through some of the most important behavioral challenges faced by investors. Montier reveals the most common psychological barriers, clearly showing how emotion, overconfidence, and a multitude of other behavioral traits, can affect investment decision-making.

• Offers time-tested ways to identify and avoid the pitfalls of investor bias
• Author James Montier is one of the world's foremost behavioral analysts
• Discusses how to learn from our investment mistakes instead of repeating them
• Explores the behavioral principles that will allow you to maintain a successful investment portfolio

Written in a straightforward and accessible style, The Little Book of Behavioral Investing will enable you to identify and eliminate behavioral traits that can hinder your investment endeavors and show you how to go about achieving superior returns in the process.

Praise for The Little Book Of Behavioral Investing

"The Little Book of Behavioral Investing is an important book for anyone who is interested in understanding the ways that human nature and financial markets interact."
—Dan Ariely, James B. Duke Professor of Behavioral Economics, Duke University, and author of Predictably Irrational

"In investing, success means¿being on the right side of most trades. No book provides a better starting point toward that goal than this one."
—Bruce Greenwald, Robert Heilbrunn Professor of Finance and Asset Management, Columbia Business School

"'Know thyself.' Overcoming human instinct is key to becoming a better investor.¿ You would be irrational if you did not read this book."
—Edward Bonham-Carter, Chief Executive and Chief Investment Officer, Jupiter Asset Management

"There is not an investor anywhere who wouldn't profit from reading this book."
—Jeff Hochman, Director of Technical Strategy, Fidelity Investment Services Limited

"James Montier gives us a very accessible version of why we as investors are so predictably irrational, and a guide to help us channel our 'Inner Spock' to make better investment decisions. Bravo!"
—John Mauldin, President, Millennium Wave Investments

---

All Customer Reviews
Average Customer Review:
0 of 0 people found the following review helpful:

brilliant, practical, 2010-06-27
This is a true treasure of an introduction to behavioral finance. Montier gives a brilliant, easy-to-read, accessible overview of how to use behavioral-finance knowledge to your own benefit. He uses a combination of logic arguments and concise references to academic research to provide credibility to the contents. The writing style is informal with well-placed humor to further emphasize his messages. It's a quick read you do not want to put down. You will part this book with practical knowledge that will benefit your finances in the long run. A little book for a big difference to your investing behavior.


4 of 7 people found the following review helpful:

Amusing and enlightening but..., 2010-05-18
Montier's book is almost an invaluable investment guide. As other reviews have detailed the book's contents I want to agree that the contents are worthwhile and, at times, amusing. Still, such tips as "don't watch CNBC" or "ignore Jim Cramer" are highly accurate but hardly qualify as a unique or a remarkable perspective.

More to the point, I found the constant use of previous behavioral studies a distraction that ended by simply getting in the way Montier's message. That would have been easily survivable, however, had the book included a closing summary of the author's points. As it is, I felt compelled to go back reread parts of the book 2 or 3 times to attempt to sort out what was essential and what was merely an effort to display the author's cleverness.

In the end, the writing style tends to defeat the book's purpose leaving the reader with an almost invaluable investment guide. Almost doesn't make it...


1 of 1 people found the following review helpful:

Great Book on Behavioral Finance, 2010-04-09

This is a great book that focuses on many common mistakes that investors make. We make these mistakes because our brains are wired to make them. Some of the traits we have that cause us to err include overconfidence, risk aversion and confirmation bias. James Montier also makes the book interesting even if you do not like psychology( which I personally find boring).

I think both a novice and experienced investor would benefit from this book. Even experienced investors could benefit from a lot of the advice and studies Montier provides in the book. I wrote for an investor website and think of myself as more experienced and I benefited greatly from this book.

This book consists of 17 chapters, my favorite was chapter 8 where Montier discusses confirmation bias. Montier ends off the chapter with a great quote from one of the best investor alive Bruce Berkowitz. Here is the quote from Berkowitz regarding his analysis of stocks ""we spend a lot of time thinking about what could go wrong with a company- stagflation, zooming interest rates or a dirty bomb going off. We try every which way to kill our best ideas. If we can't kill it, maybe we're onto something. If you go with companies that are prepared for difficult times, especially if they are linked to managers who are engineered for difficult times, then you almost want those times because they plant the seeds of greatness."


I am a financial columnist for an investor website, I wrote a full book review on the website and my blog. I can not write the full review here because I am a paid columnist and they have exlcusive rights to my articles. If you want to see my full review you can find it through my profile.


10 of 11 people found the following review helpful:

Avoiding Investment Pitfalls, 2010-03-08
Suppose someone handed you a blueprint for making the best long-term investment decisions, based on proven strategies that have stood the test of time. That's what we have here, thanks to the good work of the author, James Montier. This book picks up nicely where Think Twice: Harnessing the Power of Counterintuition left off. By following Montier's engaging and very sensible advice, chances are excellent that you will no longer be one of the world's worst investors (like me, for example).

If you're serious about avoiding all the common pitfalls the typical investor makes, you absolutely should grab a copy of this book; I only wish it had been written about ten years ago, but better "late than never"!


11 of 13 people found the following review helpful:

Precise, Sometimes Profound, 2010-03-02
The markets and economy these last few years have been and continue to be difficult to navigate through. It's hard for me to automatically default to being an intermediate or long term buy and hold type investor with lots of the long existing risks being pushed down the road and new risks being introduced via various fiscal and monetary measures taken in the last few years. Like the proverbial general fighting the last war, I don't want to just rely on familiar ways of investing The financial markets and the economy are separate animals so there are opportunities and i want to take advantage of them. The book is about recognizing and then overcoming behavioral biases that most of us have ( I certainly do) and then taking control over what we can control which is ourselves and not the markets. I particularly found beneficial the chapters on having a game plan in place when it can be created during a non-emotional time, and pre-committing to the strategy. This book can be very helpful in showing an investor how to better understand these behavioral flaws that may be preventing them from being better investors, perhaps better than many professionals. The book is very easy to read, enjoyable and makes sense, and has lots of short helpful and verifying anecdotes from successful investors such as Buffett, Soros, Klarman, Berkowitz etc,. I think this book can make me a more successful investor.

Price is accurate as of the date/time indicated. Prices and product availability are subject to change. Any price displayed on the Amazon website at the time of purchase will govern the sale of this product.