What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions Hardcover – May 4 2010
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About the Author
Meir Statman is the Glenn Klimek Professor of Finance at the Leavey School of Business, Santa Clara University, and Visiting Professor at Tilburg University in the Netherlands. His research on behavioral finance has been supported by the National Science Foundation, CFA Institute, and Investment Management Consultants Association (IMCA) and has been published in the Journal of Finance, Financial Analysts Journal, Journal of Portfolio Management, and many other publications. A recipient of two IMCA Journal Awards, the Moskowitz Prize for Best Paper on Socially Responsible Investing, and three Graham and Dodd Awards, Statman consults with many investment companies and presents his work to academics and professionals in the U.S. and abroad.
Top Customer Reviews
What Investors Really addresses exactly what the title says it will address. The book is an extremely thorough, and very well researched - as it covers many different types of investment personalities, fears and desires. It covers many aspects of emotions that investors experience, as they want safety, well fed pride, a sense of social exclusivity, and exceptional returns. Statman covers aspects of investor philanthropy, tax evasion, and will & estate planning to investing as a player wanting to win, gaining social status, and the tendency not to want to own up to losses. With a great sense of humour, Statman identifies and pokes fun at one tendency or another - found in all of us.
Great read for any investor, or investor you know.
Most Helpful Customer Reviews on Amazon.com (beta)
One topic that seems too simplistically covered is how investors view real losses versus paper losses. Statman essentially states that a loss is a loss. But an investor is not necessarily in denial if a share price drops and the investor does not think of it as a loss except on paper. The investor still owns the same number of shares and may be purchasing more shares at a discounted price with reinvested dividends. This type of "loss" could ultimately be of great benefit. It seems that Statman's view is focused on the short term in this regard.
Over all, a very good presentation.
Investors want to feel good and safe to maximize their emotional well being. Our desire for that feel good feeling drives us to buy stocks in up markets, only to panic in down markets and sell in an effort to feel safe. We also feel good thinking we are smarter than the person on the other side of any trade.
Beyond emotional well being, investors want to express their values, tastes and status. Hedge funds, for example, signify that one is a sophisticated investor and member of an exclusive club.
This is truly one of the great books on behavioral finance. If you want to learn more about your behavioral traits, this is a must read. It had me thinking the whole way through, and I could identify in many of the irrational ways I want to react. It was also a very entertaining read and one of the few books I just couldn't put down.
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