The Behavioral Investor
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- Create Date：2021-07-22 09:54:06
- Update Date：2025-09-06
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- Author：Daniel Crosby
- ISBN：9388423623
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Summary
The Behavioral Investor aims to enrich readers in the most holistic sense of the word， leaving them with tools for compounding both wealth and knowledge。 Wealth， truly considered， has at least as much to do with psychological as financial wellbeing。 In The Behavioral Investor， psychologist and asset manager Daniel Crosby examines the sociological， neurological and psychological factors that influence our investment decisions and sets forth practical solutions for improving both returns and behavior。 Readers will be treated to the most comprehensive examination of investor behavior to date and will leave with concrete solutions for refining decision-making processes， increasing self-awareness and constraining the fatal flaws to which most investors are prone。 The Behavioral Investor takes a sweeping tour of human nature before arriving at the specifics of portfolio construction， rooted in the belief that it is only as we come to a deep understanding of "why" that we are left with any clue as to "how" we ought to invest。
Reviews
T。 Sathish
，
Excellent book on understanding behavioral aspect of investing。 If you have read books of Thaler or Dan Kahneman， then this one will be a repetition。 If you are new to behavioral economics， then this is a good initiator to understand why investor behavior is an important variable in determining investment returns
Jim Woolwine
，
My favorite paragraph from this book:"Further， a team from Fidelity set out to examine the behaviors of their best-performing retail accounts in an effort to isolate the behaviors of truly exceptional investors。 When they contacted the owners of the best-performing accounts， the common thread tended to be that they had forgotten about the account altogether or had died。 So much for isolating the complex behavioral traits of skilled investors！"Maybe this time is different。 IT and SAS companies op My favorite paragraph from this book:"Further， a team from Fidelity set out to examine the behaviors of their best-performing retail accounts in an effort to isolate the behaviors of truly exceptional investors。 When they contacted the owners of the best-performing accounts， the common thread tended to be that they had forgotten about the account altogether or had died。 So much for isolating the complex behavioral traits of skilled investors！"Maybe this time is different。 IT and SAS companies operating with human capital， not hard assets and with high margins might just be the new normal replacing traditional value-based investments on more traditional or historical benchmarks。 。。。more
Victor
，
A pop-psychology book but with a specific aim to markets。 It gives no definitive solutions as it takes great care to prove all definitive opinions wrong but for the self-conscious it can frame into words what others may have felt intuitively。 The thing about markets is that everyone has an opinion and a guru with numbers to back them up。 Unless you have it in you to fine tune yourself and shut the infernal noise of the markets， this book is worthless。Full of great quotes from wise men， it can pu A pop-psychology book but with a specific aim to markets。 It gives no definitive solutions as it takes great care to prove all definitive opinions wrong but for the self-conscious it can frame into words what others may have felt intuitively。 The thing about markets is that everyone has an opinion and a guru with numbers to back them up。 Unless you have it in you to fine tune yourself and shut the infernal noise of the markets， this book is worthless。Full of great quotes from wise men， it can put you on the path towards your proper answer。 For me the answer was enter on value， exit on momentul， now to build on it is another matter。 。。。more
Anders
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Wasted money。
Bold Batdorj
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Summary keys 1。 We are not rational as we think （all about behavior ）2。 Borden view ， must embrace unfamiliar 3。 Manage emotion， your fear， bubbles4。 Understand how influential is your intuition
Craig Thomas
，
Quick read。 Most advice is standard but nice twist with the addition of psychological studies。 Interesting to read how investing applies to the human condition。
Bhuvanesh R
，
Must read book for all investorsThis should be the first book every investor should read before even the classics。 This book achieves the impossible feat if making the utter stupidity of human behaviour enjoyable。
Walter Cavinaw
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The first two parts of the book described how psychology， sociology and physiology are related affect our ability to make decisions。 In his view you can classify the investing mistakes we make into four categories: Ego， Conservatism， Attention and Emotion。Ego: The mind economizes on the intellect。 It believes in narratives and seeks out information that confirms its prior beliefs （especially those confirming our own superiority） and is highly skeptical of information that runs counter to our bel The first two parts of the book described how psychology， sociology and physiology are related affect our ability to make decisions。 In his view you can classify the investing mistakes we make into four categories: Ego， Conservatism， Attention and Emotion。Ego: The mind economizes on the intellect。 It believes in narratives and seeks out information that confirms its prior beliefs （especially those confirming our own superiority） and is highly skeptical of information that runs counter to our beliefs。 To overcome this be open minded about new information， have a learners mindset， be analytical about beliefs and accept that we are fallible。 Create a system or process to uncover assumptions and to challenge your views。 Risk is ultimately about the likelihood we are wrong， or unable to implement our intentions。Conservatism: We have a propensity to go with the status quo， which likely stems from loss aversion。 We have more regret for outcomes that result from action than inaction and will bend our preferences to rationalize inaction。 Create a system to avoid fear inducing situations and try to come up with measures of actual risk and reward that can be compared rather than letting the mind （and its biases） guide you。Attention: We are faced with too much information on a complex system， and believe in stories to help us make sense of it。 Use simple models based on a combination of data and theory to make decisoins。Emotion: Emotional situations distort the way we see the world， and physiology can impact our emotional state。 Avoid emotion-inducing states and follow a model that you can relegate decision making to if those moments do occur。In short， we seek gains and want to avoid losses even more。 Especially the loss of that which forms our identity: our beliefs。 We need to recognize the impact this has on our psychology and create processes to prevent us from realizing these cognitive and behavioral shortfalls。I found the first three parts very useful but I am irked by his insistence that the human brain is not made for investing。 I think that is most likely wrong and instead we just need to unlearn patterns of thought and behavior that prevent us from being good。 There are some investors out there whose ability to let go of their ego， combined with their analytical rigor and detachment from narrative， make them great at investing。 We can all be like this it just takes time and effort to （un）learn。The last part of the book describes an investment strategy that is coherent with his ideas on investor psychology from the first two parts。 I enjoyed what he was trying to do because so far there are no practical frameworks from the behavioral finance school （that I know of - besides the list of do's and don'ts）。 I am sympathetic to his efforts because I am also trying to do the same thing - that's why I am reading his book！However， I don't agree with most his analysis and conclusions on how to manage portfolios or make investments。 His framework is riddled with contradictions and ironically probably the result of his own psychology。 He believes that active strategies should be concentrated and based on momentum or value。 He also believes that you should be long most of the time unless momentum and value are absent。 In effect he is saying these are the only two valid edges one can have in the market。 To be clear， I agree that this are good strategies but they are clearly not the only ones。 Just to give a counter example， Renaissance's models result in a portfolio that is not concentrated nor based on value or traditional momentum， and （from what I've heard） is likely based on exploiting investor behaviour。 Is this not a sound investment strategy for the behavioral investor？I have thought about these issues a lot and in my opinion it comes down to: having models that give you an edge on the expected value of future outcomes vs expectations。 The models are theoretically sound and based on data， but don't necessarily have to conform with some historical market data （e。g。 if the event has never occurred before）。 Psychology comes into play in the analysis stage where our mind plays games with us， influencing and biasing the analysis towards our desires （e。g。 to protect our ego， to avoid perceived loss， or towards perceived gains）。 We need to work to weed out assumptions and be honest about ourselves so that we have sound analysis。 The analysis leads us to models that give us an edge， and it can be based on almost anything not just value or momentum。The first two parts of the book was incredible with respect to elucidating the impact of psychology。 The last part on how to invest with behavior in mind was average。 。。。more
Chris Boutté
，
I read hundreds of books a year， and most are in the realm of psychology。 As a newer investor， when I discovered this book， I knew I had to read it。 Daniel Crosby uses psychology and behavioral economics to explain how to be a better investor。 Most of the books I've read have had the same ideas and agree with each other when it comes to index investing and being smart about risk。 What I really liked about this book is that Crosby presented both the pros and cons from all types of investing strat I read hundreds of books a year， and most are in the realm of psychology。 As a newer investor， when I discovered this book， I knew I had to read it。 Daniel Crosby uses psychology and behavioral economics to explain how to be a better investor。 Most of the books I've read have had the same ideas and agree with each other when it comes to index investing and being smart about risk。 What I really liked about this book is that Crosby presented both the pros and cons from all types of investing strategies。 Although I'm new to this whole thing， I don't know if I 100% agree with all of his arguments， but he definitely gave me a few more concepts to think about。 。。。more
Afshid
，
A wonderful book for the psychology of investing。 Although it guides us in understanding our emotions through investing， it doesn't provide a clear and exact way for controlling our fear and eagerness in the market。Completing the theory of behavioural economics in investing and markets。 A wonderful book for the psychology of investing。 Although it guides us in understanding our emotions through investing， it doesn't provide a clear and exact way for controlling our fear and eagerness in the market。Completing the theory of behavioural economics in investing and markets。 。。。more
CKL
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簡而言之－－大雜燴式讀書報告。把書架上有關書目一字排開，每頁都引述不同書目內容、作者、名人，然後。。。沒有結論。
Reinhard Gaul
，
The behavioral principles discussed are really cool and I like the investing context， but I thought the conclusions and reasoning to reach them were both lacking。 Sometimes it felt like the author was being purposefully dogmatic just to make a quick psychological connection and move onto the next principle。 I don’t know that I’m a better investor because of reading this。
Duraid Awad
，
A very good book to those who wants to improve their physological thinking when buying and selling stocks
Parham
，
Read the summarized version on blinkist and liked it。On my list to read the full book。
Zhivko Kabaivanov
，
The Behavioral Investor （2018） explores the subconscious thought patterns and emotions that influence financial investors。 Author Daniel Crosby provides insight and guidance that will help you overcome your natural inclinations so that you can make better financial decisions。
Chintushig Tumenbayar
，
Хөрөнгө оруулалтын чиглэлд сахилга бат， зөв стратеги ямар чухал гэдгийг дэлгэрэнгүй танилцуулжээ。 Зохиогчийн хэлж байгаагаар хүн олон төрлийн Bias-д автдаг。 Энэ нь санхүүгийн шийдвэр гаргахад нөлөөлдөг ба дэлхийн эдийн засгийн өнөөдрийн төлөв байдалд ч ихээхэн нөлөөлсөн гэж үздэг。 Жишээ болгоход бүүдгэр бүрхэг өдрүүдэд арилжаа жирийн үеийнхээс бага хийгддэг ба үүнийг орчин үед автоматжуулалснаар шийдэж байгаа аж。 Хөрөнгө оруулалтын гол суурь нь мөнгө гэж харагддагч үнэндээ хүн гэдгийг бодох нь а Хөрөнгө оруулалтын чиглэлд сахилга бат， зөв стратеги ямар чухал гэдгийг дэлгэрэнгүй танилцуулжээ。 Зохиогчийн хэлж байгаагаар хүн олон төрлийн Bias-д автдаг。 Энэ нь санхүүгийн шийдвэр гаргахад нөлөөлдөг ба дэлхийн эдийн засгийн өнөөдрийн төлөв байдалд ч ихээхэн нөлөөлсөн гэж үздэг。 Жишээ болгоход бүүдгэр бүрхэг өдрүүдэд арилжаа жирийн үеийнхээс бага хийгддэг ба үүнийг орчин үед автоматжуулалснаар шийдэж байгаа аж。 Хөрөнгө оруулалтын гол суурь нь мөнгө гэж харагддагч үнэндээ хүн гэдгийг бодох нь амжилттай хөрөнгө оруулахад дэмтэй байдаг юм байна。 。。。more
Bianca A。
，
Published in 2018 by a gent with a PhD in psychology and a behavioral finance expert。The book is focusing as promised on how to manage yourself emotionally and psychologically as an investor and businessman in a professional setting。 Classic advice is offered: don't be overconfident， broaden your views， understand when you're being emotional and focus on being rational， manage your fear， don't be impatient etc。 Through understanding ourselves we will also extend that knowledge and skill into und Published in 2018 by a gent with a PhD in psychology and a behavioral finance expert。The book is focusing as promised on how to manage yourself emotionally and psychologically as an investor and businessman in a professional setting。 Classic advice is offered: don't be overconfident， broaden your views， understand when you're being emotional and focus on being rational， manage your fear， don't be impatient etc。 Through understanding ourselves we will also extend that knowledge and skill into understanding how others operate and use it to our advantage。I think this book is way more about psychology and various biases than it is about investing， but it does try it self to relate to investing scenarios as much as possible。 It's up to you if it'll be your cup of tea。 I advise trying an excerpt first before purchasing。 。。。more
Jung
，
There’s a huge amount of volatility in capital markets， but this is predominantly driven by investor decisions， not money itself。 Unfortunately， our brains aren’t as good at making decisions as we think。 Anything from the weather to how familiar a ticker name sounds can influence our investment choices without us even noticing。 That’s why it’s important to develop a deep understanding of how your brain reacts to a stressful work environment and how you can consciously choose to make better inves There’s a huge amount of volatility in capital markets， but this is predominantly driven by investor decisions， not money itself。 Unfortunately， our brains aren’t as good at making decisions as we think。 Anything from the weather to how familiar a ticker name sounds can influence our investment choices without us even noticing。 That’s why it’s important to develop a deep understanding of how your brain reacts to a stressful work environment and how you can consciously choose to make better investment decisions。Actionable advice: Manage stress using the R。A。I。N。 modelIn moments of acute stress， turn to Michele McDonald’s R。A。I。N model to return to a calm state of mind。 Start by Recognizing what is physically happening to you， like an increase in your heart rate。 Next， Accept what you’ve observed， even if you don’t like it。 Then Investigate any narratives you’re telling yourself about the situation and identify other thoughts you’re having。 Once you’ve done that， you’re ready for the final step – Non-identification – where you acknowledge that feeling stress doesn’t mean you have to be defined by it。 。。。more
QUINNS
，
According to this book， there is a considerable amount of capital markets volatility， but investor decisions， not money itself mainly drive this。 Unfortunately， our brains are not as good as making decisions as we think。 Anything from the weather to how familiar a ticker name sounds could influence our investment choices without us even noticing。 That's why it is crucial to develop a deep understanding of how your brain reacts to a stressful work environment and how you could consciously choose According to this book， there is a considerable amount of capital markets volatility， but investor decisions， not money itself mainly drive this。 Unfortunately， our brains are not as good as making decisions as we think。 Anything from the weather to how familiar a ticker name sounds could influence our investment choices without us even noticing。 That's why it is crucial to develop a deep understanding of how your brain reacts to a stressful work environment and how you could consciously choose to make better investment decisions。 。。。more
Rajeev
，
Thought provoking guide for investors。 Bottom line， you can be momentum+value investor for a better growth。 And remember， you are an average investor and you need to respect the truth to help yourself。
Juan Castro
，
To be a successful investor， you must understand how your brain works。Because your brain thinks you’re being threatened， it limits its focus to these areas to keep you alive。 This makes it harder for you to think clearly and makes it more likely that you’ll overlook important information。Our brains encourage us to be impatient。 They do this by giving us a hit of dopamine – a hormone that makes us feel good – whenever we do something that results in immediate success。 Because we like that feeling To be a successful investor， you must understand how your brain works。Because your brain thinks you’re being threatened， it limits its focus to these areas to keep you alive。 This makes it harder for you to think clearly and makes it more likely that you’ll overlook important information。Our brains encourage us to be impatient。 They do this by giving us a hit of dopamine – a hormone that makes us feel good – whenever we do something that results in immediate success。 Because we like that feeling， we’ll do whatever it takes to get it。 Sadly， that means you， as an investor， might sabotage your financial plans because you’re tempted by short-term wins instead of long-term gains。You’re not as rational as you think。When it comes to making decisions， we humans are experts at justifying our choices。 This helps us maintain the belief that we’re capable of doing the right thing。 We’re also good at demonizing the option we didn’t take。 This reassures us that we made the right choice。 this ego-driven desire to preserve our self-identity makes it difficult to change course if a decision doesn’t pay off。 It’s the reason people cling to failing investments instead of cutting their losses and moving on。 To succeed as an investor， you need to get used to being uncomfortable。 Because the markets are constantly in flux， you’ll always face potential losses and regrets。 But if you accept this， you can move forward with the best course of rational action instead of letting your emotions keep you stuck in the past or paralyzed by fear。Overconfidence is a liability。Typically， when investors experience wins， they believe their success is due to their unique skills and might fail to see that the whole market is up as well。 Their overconfidence could cause them to keep buying， even if stock prices are already high。 This goes against the “buy low， sell high” rule-of-thumb that every investor should follow。 Because it takes a lot of energy for your brain to make difficult decisions， it looks for ways to cut corners by defaulting to what it already knows。 Sadly， when it comes to investing， this tendency puts your portfolio at risk。To invest successfully， you must broaden your views。To invest successfully， you must manage your emotions。To be a successful investor， you must understand how influential your intuition is。As an investor， you’ll be exposed to constant financial news， endless opinions， as well as the greed of others and yourself。 Without a solid model in place to help you make good decisions， you’ll inevitably crack under the stress。 But if you’ve committed to following a model， your investment decisions won’t be at the mercy of how you feel。To be a successful investor， you must manage your fear of market bubbles。because the experience of them is so traumatizing， they tend to dominate public memory。 To navigate through the inevitable rise and fall of the market， create a rules-based system that will guide you to becoming more conservative when things are unstable。 That way， you can focus on being patient and acting infrequently， rather than behaving reactively based on how you feel on any given day。A common system to achieve this is a momentum-based model with a 200-day moving average。 Following this model means holding assets when their price is above their 200-day average and selling them when it drops below that number。 A similar model is based on a ten-month moving average。Manage stress using the R。A。I。N。 modelIn moments of acute stress， turn to Michele McDonald’s R。A。I。N model to return to a calm state of mind。 Start by Recognizing what is physically happening to you， like an increase in your heart rate。 Next， Accept what you’ve observed， even if you don’t like it。 Then Investigate any narratives you’re telling yourself about the situation and identify other thoughts you’re having。 Once you’ve done that， you’re ready for the final step – Non-identification – where you acknowledge that feeling stress doesn’t mean you have to be defined by it。 。。。more
Linda Leitz
，
Daniel Crosby has fabulously intelligent information about investment management which is written in understandable language and a wonderful sense of humor。 This book is great for financial professionals as well as intelligent consumers。
Alejandro
，
Interesante para saber los fallos que cometemos a la hora de invertir。 Menciona varios sesgos。 Hace referencias a Kanheman ， Taleb etc
Kully
，
I don't care for investing， but this is a wonderful introduction to human behaviour ideas and research in the domain of investing。 I don't care for investing， but this is a wonderful introduction to human behaviour ideas and research in the domain of investing。 。。。more
Brad
，
AoM podcast episode #511
Martin Yau
，
Another brilliant book on investor psychology。 Gives the reader the reasons why some investors are more successful than others。 Also gives useful suggestions to build portfolios to take advantage of the psychological pitfalls。
Filip Zulamoski
，
- “The job of an investor， on the other hand， is to view the market today the way that others will tomorrow。 Becoming an individual requires expression of self， but becoming a behavioral investor requires subjugation of self。 Bending your will against its most primal bio-psycho-social longings is one the hardest and potentially most rewarding things you will ever do。”- “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections， than has been lost in - “The job of an investor， on the other hand， is to view the market today the way that others will tomorrow。 Becoming an individual requires expression of self， but becoming a behavioral investor requires subjugation of self。 Bending your will against its most primal bio-psycho-social longings is one the hardest and potentially most rewarding things you will ever do。”- “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections， than has been lost in corrections themselves。”- “Learning to score your investment wins and losses based on the quality of your decisions and not on the quality of the outcome is the key to managing your emotions， appropriately measuring your own performance and living to fight another day。” 。。。more
Shantnu Mathuria
，
This is one more addition to my series of investment and finance reads and this book is a pure gem！ If only I could have given this book more than 5 stars。 I remember picking up this book in a store in CP， surfing through its pages， I felt quite sure that its content appealed to me。Maybe the author is still unknown about the true worth of this book because this particular work should be selling atleast twice its current price。I pay my respect to the author for writing and documenting such a deep This is one more addition to my series of investment and finance reads and this book is a pure gem！ If only I could have given this book more than 5 stars。 I remember picking up this book in a store in CP， surfing through its pages， I felt quite sure that its content appealed to me。Maybe the author is still unknown about the true worth of this book because this particular work should be selling atleast twice its current price。I pay my respect to the author for writing and documenting such a deep researched book。 Just to tell you， this book mentions atleast 50 books from which it quotes surveys， experiments and insightful information。 It feels like knowledge of 5-10 books has been squeezed into one and has been gifted to you。 Not a single page goes by without adding immense value to you and you may have read it again and then maybe once more so that you are able to absorb the plethora of details available。This book is like a knowledge packed 'Snickers'， really rich in content and small in size。'The Behavioral investor' talks about the rules that one needs to follow as an investor in the stock market。 It documents various theories proposed by researchers who have devoted their life demystifying the movement of 'market'。 It draws upon various proven rules that can be applied in other aspects of your life as well。 'Contrarian investor'， 'law of averages'， 'confrontational bias'， 'value and momentum'， 'reflexivity'， 'H。A。L。T' and many more theories have been described that will provide you a comprehensive picture about human psychology which affects the way an investor behaves。 This book is a crash course on stock market investment。 I would strongly recommend you to get your hands on this book！ 。。。more
Randy
，
I really liked this book。 I've never been very interested in finances or investing， but decided to give this a go。 I would describe it as largely a psychology book written with applications to investing in mind。 It discusses into many weird quirks of human behavior that presumably served us well in the past， but make us terrible investors。 There's lots of interesting psychology experiments and studies cited， which not only make the arguments more convincing but enable you to easily look into som I really liked this book。 I've never been very interested in finances or investing， but decided to give this a go。 I would describe it as largely a psychology book written with applications to investing in mind。 It discusses into many weird quirks of human behavior that presumably served us well in the past， but make us terrible investors。 There's lots of interesting psychology experiments and studies cited， which not only make the arguments more convincing but enable you to easily look into some of the topics in more detail。 The book reminded me of how much I enjoyed psychology when I was an undergrad。 The author's writing style is extremely readable and he has a good sense of humor， however the editing is far from perfect。 I noticed a number typographical errors in the text， though not so many as to take away from the reading。The main point of the book is to encourage the development of a systematic approach to investment that minimizes our human tendency towards poor financial decisions。 I found it super useful， and would recommend it to anyone who has limited understanding of financial decision making， or is not familiar with the psychology of it。 。。。more
Avirup M
，
A very different approach to investing。 I like how the author correlated basic human behaviour with investment， and tbt， seems legit correct。 And the examples and studies to support the claims were laid out smoothly。
Reference
google book https://www.google.com/search?tbm=bks&q=The Behavioral Investor
hathitrust digital library https://babel.hathitrust.org/cgi/ls?q1=The Behavioral Investor&field1=ocr&a=srchls&ft=ft&lmt=ft