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Snap Judgment: When to Trust Your Instincts, When to Ignore Them, and How to Avoid Making Big Mistakes with Your Money

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Snap Judgment: When to Trust Your Instincts, When to Ignore Them, and How to Avoid Making Big Mistakes with Your Money

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Your instincts are your worst enemy when it comes to money and investing. Keep them from leading you to disaster!

  • Beyond Freakonomics and Blink, a fascinating look at the realities of your own behavioral biases and how to avoid the often costly consequences.
  • The first book to reveal the behavioral roots of today's financial and economic crisis and how to avoid such crises in the future.
  • Specific techniques for "debiasing" every financial decision, from personal investing to corporate planning.
  • Description

    • Copyright 2009
    • Edition: 1st
    • Premium Website
    • ISBN-10: 0-13-714778-3
    • ISBN-13: 978-0-13-714778-6

    "Adler’s argument is illuminating and reveals that, when it comes to investing, we should always have second thoughts about our first impressions."

    --Publisher's Weekly


    “David Adler’s Snap Judgment is a well-written, entertaining review of human action in risky situations, including stock market behavior and other risk-facing situations. In particular, Adler recounts the conclusions of many practitioners and behavioral finance scholars who have studied such matters. This book is well worth reading, both for its practical advice for the novice and its wealth of illustrations for the pro.”

    — Harry Markowitz, Nobel Laureate in Economics and father of modern portfolio theory

    “David Adler has done a great public service by translating a dazzling array of research in economics and finance into practical terms that anyone can understand and profit from. This book should be required reading for every investor.”

    — Andrew W. Lo, Professor of Finance, MIT Sloan School of Management

    “Investing and managing your money on the basis of emotion, instincts, and intuition is a road straight to the poorhouse. This book teaches you why—and how to rid yourself of the irrational impulses that torment your portfolio.”

    — Peter Navarro, bestselling author of If It’s Raining in Brazil, Buy Starbucks and The Coming China Wars

    “Adler’s book makes a compelling case, illustrated through engaging examples, that the mind and the purse are well served by the triumph of analytic intelligence over intuition.”

    — Gary Loveman, Chairman, President, & CEO, Harrah’s Entertainment, Inc.

    Sample Content

    Online Sample Chapters

    Introduction to Snap Judgment: Second Thoughts About First Impressions

    Snap Judgment: Why Money Is a Drug

    Sample Pages

    Download the sample pages (includes Introduction, Chapter 1, and Index)

    Table of Contents

    Acknowledgments . . . ix

    About the Author . . . xi

    Introduction . . . 1

    Part I: The Psychology of Financial Decisions

    Chapter 1. Money Is a Drug . . . 15

    Chapter 2. Buy High, Sell Low: The Basic Instinct Driven Error of Investing . . . 21

    Chapter 3. More About Stocks: Dividends–Behavioral Ways to Play the Dividend Game . . . 27

    Chapter 4. Bonds: Malign Neglect . . . 33

    Chapter 5. The Psychology of Why People (Used to) Hate Annuities . . . 39

    Chapter 6. The Psychology of Selecting Mutual Funds . . . 47

    Chapter 7. Building Your Portfolio the Behavioral Economics Way . . . 55

    Chapter 8. Risk Tolerance and Investing . . . 61

    Chapter 9. Deconstructing Stock Analysts . . . 67

    Chapter 10. Value Investing: Behavioral Origins . . . 73

    Chapter 11. Timing Stocks . . . 77

    Chapter 12. Momentum . . . 83

    Chapter 13. The Ultimate Anomaly: Trusting Your Gut in Finance . . . 91

    Part II: The Track, the Stock Market, and Other Types of Gambling

    Chapter 14. Let’s Talk about Linda: More about Our Intuition . . . 95

    Chapter 15. Why Investors Bet on Long-Shot Horses . .109

    Chapter 16. Gambling Continued: Stories We Tell Ourselves . . . 113

    Chapter 17. Fourth and Ten: Insights into NFL (and Corporate) Decision Making . . . 119

    Chapter 18. Football Stories, Continued: The NFL Draft . . . 125

    Chapter 19. The Inner Game of Tennis, Revisited . . . 131

    Chapter 20. How to Make Money Gambling: Behavioral Insights . . .135

    Chapter 21. The Truth About Coin Tosses: They Aren’t Fair . . . 143

    Part III: Personal Decisions: Personal Safety, Personal Finance, and Health Choices

    Chapter 22. Personal Security: Assessing Danger . . . 151

    Chapter 23. Credit Card Stories: Beating Your Credit Card Charges Using Behavioral Economics . . . 155

    Chapter 24. Snap Judgment and Social Security: When Should You Claim It? . . .163

    Chapter 25. How Patients Think Irrationally . . . 167

    Chapter 26. Health Insurance Decisions . . . 173

    Chapter 27. Car Accidents . . . 177

    Part IV: CEO Behavior

    Chapter 28. Strategic “Styles” . . . 183

    Chapter 29. CEO Hubris . . . 189

    Chapter 30. Firing CEOs . . . 195

    Chapter 31. Using CEO Behavior for Investing . . . 197

    Chapter 32. Wall Street CEOs . . . 199

    Part V: Psychology and the Credit Crisis

    Chapter 33. Background: Bubbles and When They Explode . . . 207

    Chapter 34. Fear and Loathing in Ft. Lauderdale . . . 213

    Chapter 35 Follow the Mortgage . . . 219

    Chapter 36. Risky Business: Bank Runs . . . 229

    Chapter 37. Euphoria, Fear, and Economics: A Psychological Autopsy of the Crisis . . . 235

    Part VI: Conclusion: Debiasing

    Chapter 38. How Not to Blink in the Face of Financial Panic . . . 249

    Chapter 39. A Summing Up: Twilight of the Gods . . . 261

    Index . . . 265


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