Behavioral Investing

[JEast]

I finished reading two very fine books by James Montier of Grantham, Mayo, Van Otterloo & Co. (GMO).  The first is the 'Little Book of Behavioral Investing' and the more lengthy and in depth version is 'Behavioral Investing: A Practitioners Guide to Applying Behavioural Finance'.  The 'Little Book' series has become a great library of value investing principles and this recent addition is a great contribution to the collection.

 

Both books cover the many mental traps we face such as Empathy Gaps, Fear/Risk Aversion, Overoptimism, Authority Respect/Overconfidence, Anchoring, Information Overload, Reason Respecting, Conformational Bias.

 

http://www.amazon.com/Little-Book-Behavioral-Investing-Profits/dp/0470686022/ref=cm_cr-mr-title

http://www.amazon.com/Behavioural-Investing-Practitioners-Applying-Finance/dp/0470516704/ref=cm_cr-mr-title

 

 

Cheers

JEast

 

[SharperDingaan]

 

You might want to keep in mind that this is also often the retail investors biggest 'con'.

 

SD

[Packer16]

I agree.  These are probably the best value investing books I have read this year.  The nice thing I like about the little book is it actually gives you examples of how value investors overcome these behavioral biases.

 

Packer