Sunday, 6 May 2012

Best books on Behavioural Economics / Investing

I thought I would create a list of some of the books  etc which have inspired me to write this blog. Instead of writing lengthy reviews for each I've provided a few words of my own to pique your interest and then links to my favourite review if you want to delve deeper. The first 6 are behavioural economics; I’d count the last 4 as behavioural investing.

Economics Related; 1-6

1.) Predictably Irrationality. Dan Ariely.....Good easy to read introduction to some of the ideas of behavioural economics. Review 

2.) Think Fast, and Slow. Daniel Kahneman.....Our mind has two systems for solving problems, one fast, one slow. The fast one uses shortcuts and therefore gets some things wrong.  Review

3.) Future Babble. Dan Gardner....Examines expert forecasts, quite a lot are wrong, explains why they are and why we listen to them anyway.  Review

4.) Being Wrong: Adventures in the Margins of Error. Kathryn Schulz....To err is to be human. Why we get things wrong, hate uncertainty but should embrace it. Review - Bill Clinton on why the tea party should read this book. 

5.) Irrationality. Stuart Sutherland......This book sparked my whole interest in this subject. Written in 1992 it manages to tackle a massive amount of the studies up to that point fitting in references to 160 different psychological experiments in its 242 pages. Review

6.) Arming the Donkeys. Dan Ariely....Ok, this isn't actually a book but it deserves to go in here anyway. In this series of free podcasts (just search in iTunes) Dan talks to researchers at different universities about the work they are doing and its ramifications for everyday life. In particular interest to investors, there is one on Stocks and their names / tickers and how this affects their pricing. Fascinating stuff and short!

Behavioural Investing; 7-10.

7.) The little book of behavioural investing. James Montier......Great starting point for behavioural investing. Explains the mistakes we make and how to stop them. Interview with Author

8.) Unexpected Utility. A good finance blog with a behavioural perspective.

9.) Inefficient Markets: An Introduction to Behavioural Finance. Andrei Shlifer...The book describes and evaluates inefficient markets and shows how behavioural techniques can be used to understand some of the anomalies in the markets. Couldn't find a review of this one!

10.) Behavioural Investing: A Practitioners Guide to Applying Behavioural Finance. James Montier...This is for the more serious reader. (At a whopping £40 it would have to be) If you still haven't had enough after the last three then get this one!

No comments:

Post a Comment