Chapter 08 - Slides 1 to 29 - Behavioral Finance and the Psychology of Investing; Technical Analysis

Author(s): Paiano, Frank
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"Investor what?! Psychology? Do we need to have our heads examined?" Benjamin Graham, the Father of Value Investing, wrote, "The investor’s chief problem, and even his worst enemy, is likely to be himself." This quote deftly sums up the essence of the chapter. We discuss common investor weaknesses such as reading too much into the recent past, misperceiving randomness, being overconfident, and selling your winners while hanging on to your losers. We finish by introducing the very popular yet not normally very successful world of technical analysis. The best part of technical analysis is that you really do not have to know what you are doing. You only have to convince others that you know what you are doing!


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