Michael Hanson – 20-20 Money. See the Markets Clearly and Invest Better Than the Pros
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Description
20/20 Money: See the Markets Clearly and Invest Better Than the Pros
To be a extra profitable investor, it is advisable see the funding panorama extra clearly. 20/20 Money—from Fisher Investments Press—will help you obtain this objective.
Designed that will help you suppose in another way about your investing decisions, this dependable useful resource addresses new concepts and challenges extensively held conventions. With 20/20 Money as your information, you’ll shortly find out how gaining a agency understanding of assorted ideas—from inventory market and programs principle to neuroscience and psychology—will help you start making higher funding choices. Along the means, you’ll additionally uncover a few of the most profitable methods for considering and studying, and how they are often utilized to your investing endeavors.
To grow to be a greater investor, you need to have the self-discipline to make powerful decisions—decisions that won’t at all times be consistent with custom or generally accepted invested knowledge. But the strategy outlined all through these pages will help you achieve the imaginative and prescient to start making better-informed funding choices.
Table of Contents
Acknowledgments xi
Introduction xiii
Chapter 1 Investing Is a Science 1
Apollo’s Arrow Shot Crooked 2
Dionysus—More Than Just a Good Vintner 3
Use the Method, Not the Dogma 5
Careful with Categories 13
Could Math Be Wrong? 15
Reduction: Why You Can’t Quantify Everything 19
Chapter 2 Investing Is a Discipline 27
Discipline, Discipline, Discipline 29
Sagacity: Seeing Isn’t Believing 41
Understanding and Being Curious 48
Chapter 3 Human Behavior 51
Brain Basics 53
Brains on the Market 64
My, What a Terrible Memory You Have! 71
Bad Behavioral Finance 76
Behavioral Miscellany 79
Chapter 4 Sentiment and the Media 83
Sentiment Basics 85
News and the Media 90
What’s Their Motive? 98
Tips and Tricks to Navigate the Media 100
Metaphors We Invest by 106
Chapter 5 How Stock Markets Really Work 113
Capitalism by Any Other Name 114
It’s Complicated . . . A Crash Course in CEAS 118
The New Golden Rule 130
Oldest and Still the Best: Supply and Demand 139
Chapter 6 Forecasting, Part 1—The Principle of Probability 147
Forecasting Is Strange Alchemy 148
Types of Predictions 150
Probability Theory, or How Markets Are Nothing Like Coin Tosses 154
The Biggest Problem of Them All 163
Investing Lessons from Probability 165
Looking Ahead . . . 170
Chapter 7 Forecasting, Part 2 —Recognizing Patterns 173
A Pattern by Any Other Name 174
Stock Market Patterns 175
Patterns Through the Noise 179
It’s a Game of Relative Expectations 181
Back to the Future: Using History to Find Patterns 187
Three Big Drivers 191
An Optimistic Note on Future Patterns 195
Chapter 8 Practical Portfolio Management 197
The Virtues of Heuristics 198
Goal Setting 199
Personal Goals 201
Portfolio Goals 205
The Top-Down Philosophy 210
Miscellaneous Heuristics 223
Chapter 9 The Nature of Risk and Navigating Markets in Troubled Times 229
Risk and Uncertainty 231
Financial Risk, or What Happens When You Assume 233
In Troubled Times 239
Parting Thoughts 253
Notes 255
Selected Bibliography and Further Reading 259
About the Author 269
Index 271
Author Information
Michael J. Hanson has been an funding banker in addition to a inventory analyst and is at the moment a senior editor and recurring columnist at Fisher Investments’ MarketMinder.com. He has lectured on subjects in cash administration at the Haas School of Business at the University of California, Berkeley, and speaks commonly all through the nation on quite a lot of subjects, together with capital markets and behavioral finance.
