- Hardcover: 304 pages
- Publisher: McGraw-Hill Education (1 May 2011)
- Language: English
- ISBN-10: 0071753370
- ISBN-13: 978-0071753371
- Product Dimensions: 16 x 2.6 x 23.6 cm
- Amazon Bestsellers Rank: 1,613,001 in Books (See Top 100 in Books)
Investing and the Irrational Mind: Rethink Risk, Outwit Optimism, and Seize Opportunities Others Miss (Business Books) Hardcover – 1 May 2011
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About the Author
Robert Koppel is a former member of the Chicago Mercantile Exchange (CME), a hedge fund partner, and president of his own division at Rand Financial. The author of numerous books on the psychology of trading, Koppel was the senior business writer for Onmoney.com. His work has appeared in the national financial press and been featured on CNN, CNBC, and NPR.
Most Helpful Customer Reviews on Amazon.com (beta) (May include reviews from Early Reviewer Rewards Program)
The results from the interviews with top traders and the compelling evidence from clinical research shifts focus for traders from "systems only" (external programs) to balance (detailed trading method AND experienced adaptability - left brain/right brain stasis).
As a full time trader and a trading coach, most of my instruction time with clients lies not in better application of "system", but in how each trader processes information - usually with unintended results and the illusion of control from "having purchased someone else's system".
In my experience from reading every book I can find written about trading psychology, Robert has hands down provided concise research and practical application from top traders to prove without doubt that the biggest obstacle traders face is themselves.
And in conclusion Robert details the steps traders can follow to turn their destructive behavioral patterns into life-long positive assets that extend well beyond their original intent (improve trading results).
This book I would classify as a 'running commentary' on the topic.
I did not discover anything profound, new...or captivating.
Mark Douglas' book,... TITZ,...is one of the best books out there on trading psychology,
and his work was summarily dismissed by this author.
That pretty well sums it up!
I like reading about how we think and how the brain works. Many investment mistakes are illogical but people make them all the time. Koppel cites Arily's Predictably Irrational book and builds on it.
Koppel has researched all the research on mistakes investors make. Early on, he quotes Baruch:
"Only as you do know yourself can your brain serve you as a sharp and efficient tool. Know your own failings, passions and prejudices so you can separate them from what you see."
And Baruch's rules for successful investing:
1 - don't speculate unless you do it full time (I violate that one or perhaps I don't since I do not like to think that I speculate)
2 - resist "information" or tips
3 - Before purchasing a security, know everything you can about the company.
4 - never attempt to buy at the bottom and sell at the top.
5 - Take your losses quickly
6 - don't buy too many securities. Focus on a few and watch them.
7 - reappraise strategy periodically.
8 - never invest all your funds - keep some liquid
9 - don't try to be a jack of all investments - stick to a field you know (I notice I tend to make money in technology and lose money in other areas)
I liked all the studies Koppel cites. It is a well researched book.
He points out the "self serving bias". We tend to attribute our success to us and our failures to external events. I call this the "be careful when you start thinking you are smart" syndrome.
Good book - makes me re-think some of my investment strategy.