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Even the best Wall Street investors make mistakes. No matter how savvy or experienced, all financial practitioners eventually let bias, overconfidence, and emotion cloud their judgement and misguide their actions. Yet most financial decision-making models fail to factor in these fundamentals of human nature. In Beyond Greed and Fear, the most authoritative guide to what really influences the decision-making process, Hersh Shefrin uses the latest psychological research to help us understand the human behavior that guides stock selection, financial services, and corporate financial strategy. Shefrin argues that financial practitioners must acknowledge and understand behavioral finance--the application of psychology to financial behavior--in order to avoid many of the investment pitfalls caused by human error. Through colorful, often humorous real-world examples, Shefrin points out the common but costly mistakes that money managers, security analysts, financial planners, investment bankers, and corporate leaders make, so that readers gain valuable insights into their own financial decisions and those of their employees, asset managers, and advisors. According to Shefrin, the financial community ignores the psychology of investing at its own peril. Beyond Greed and Fear illuminates behavioral finance for today's investor. It will help practitioners to recognize--and avoid--bias and errors in their decisions, and to modify and improve their overall investment strategies.
How do psychological biases and emotional responses fundamentally undermine the efficacy of traditional financial decision-making models? Hersh Shefrin, a pioneer in the field of behavioral finance, synthesizes psychological research with market data to demonstrate that human error is a predictable component of financial activity. He argues that by integrating an understanding of cognitive biases—such as overconfidence and loss aversion—into professional practice, investors and corporate leaders can mitigate systemic risks and improve strategic outcomes.
What You Will Find
Experts recognize this work as a foundational text for understanding the intersection of psychology and market behavior. Readers frequently note that while the subject matter is complex, the author's use of real-world examples makes the academic concepts accessible to both professional practitioners and individual investors.
Page Count:
408
Publication Date:
2002-09-26
Publisher:
Oxford University Press
ISBN-10:
0195161211
ISBN-13:
9780195161212
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