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Investment Blunders of the Rich and Famous...and What You Can Learn from Them

Book Description

We're all human - especially when we're investing. In Investment Blunders (of the Rich and Famous) ... And What You Can Learn From Them, one of the world's leading experts on investor psychology deconstructs spectacular failures from the world's most prominent investors. They should have known better - but they invested with their hearts, not their brains. Chances are, you're making some of the same mistakes right now. John Nofsinger uncovers those mistakes so you can put your brain back in charge - while there's still time.

Table of Contents

  1. Copyright
    1. Dedication
  2. Praise for INVESTMENT BLUNDERS
  3. FINANCIAL TIMES Prentice Hall
  4. Financial Times Prentice Hall Books
  5. Preface
  6. Acknowledgments
  7. 1. Other People's Problems
    1. Do-It-Yourself Investing
    2. Investor Performance
    3. Effect of a Blunder
    4. Endnotes
  8. 1. Self-Inflicted Common Problems
    1. 2. Behavioral Finance
      1. Your Psychological Biases
      2. Emotions
      3. Simplification
      4. The Investment Environment
      5. Summary
      6. Endnotes
    2. 3. Patterns and Predictions
      1. Gambler's Fallacy
      2. Streaks
      3. Investors and Trends
        1. From Dogs to Fools
      4. Mining Fool's Gold
      5. High-Tech Data Mining
      6. Foresight and Hindsight
      7. Summary
      8. Endnotes
    3. 4. Mood, Optimism, and Investing
      1. Moods and Expectations
        1. Sunshine
      2. The Bias of Optimism
        1. Optimism, Exuberance, and Blunders
      3. Rampant Optimism and Pessimism
      4. Summary
      5. Endnotes
    4. 5. Profits from the Prophets?
      1. Analysts
      2. The Biases of Analysts
      3. Dartboard
      4. Barron's Annual Roundtable
      5. Value Line
      6. Newsletters
      7. Insiders
      8. Economists
      9. Summary
      10. Endnotes
    5. 6. Foolish Risks
      1. The Right Risks
      2. Fall of a Titan
      3. Your 401(k) Plan
      4. Active Risk Management
      5. How Much Diversification?
      6. Picking Portfolios
      7. Endnotes
  9. 2. Trying to Beat the Market
    1. 7. Timing the Market
      1. All Types of Market Timing
      2. Tools of the Trade
      3. Professional Timing
      4. The Timing Newsletter
      5. Timing in Bull and Bear Markets
      6. Individual Investors and Market Timing
      7. Market Timing and Risk
      8. Summary
      9. Endnotes
    2. 8. Mutual Funds: Performance
      1. Mutual Fund Managers Are Superior Investors
      2. Mutual Fund Investors Underperform the Market
        1. Paradox Resolved
      3. Do Winners Repeat?
        1. Mutual Fund Ads
      4. Chasing Winners
      5. Tournaments and Temptations
      6. Star Power
      7. Summary
      8. Endnotes
    3. 9. Mutual Funds: Carrying the Load
      1. Mutual Fund Fees
        1. Loading Up
        2. Quid Pro Quo
        3. A Fee By Any Other Name
      2. What Mutual Funds Give, the Tax Man Takes Away
      3. Out of Sight and Out of Mind
      4. Endnotes
    4. 10. The Social Investor
      1. The Friends You Keep
      2. Being Social
      3. Talking Stocks
      4. Investment Analysis
      5. Media
      6. Summary
      7. Endnotes
    5. 11. Get Rich Quick
      1. The Pyramid
        1. A Pyramid in Albania
        2. The Caritas Pyramid in Romania
        3. A Pyramid in Russia
      2. Pyramids in the United States
        1. Gifting as a Pyramid
      3. The Internet, an Effective Pyramid Medium
      4. Summary
      5. Endnotes
  10. 3. Colossal Blunders
    1. 12. The Eggheads Crack
      1. In the Beginning
        1. The Hedged Bet
        2. The Hedge Fund
      2. Long-Term Capital Management
        1. LTCM's Trading
      3. Leverage
        1. Overconfidence
      4. Imitation May Be Flattering, But…
      5. The Beginning of the End
        1. The Fear of a Crisis
      6. Summary
      7. Endnotes
    2. 13. An Orange Squeezed
      1. The Rise of Robert Citron
        1. Citron in Demand
      2. The Repo Man
      3. The Economy Changes
        1. The Squeeze
      4. A Rescue?
      5. The Aftermath
      6. Summary
      7. Endnotes
    3. 14. Betting the Bank
      1. Barings Bank
        1. Nicholas Leeson
        2. Arbitrage and Futures Contracts
        3. An Error in Singapore
        4. Double…or Double Again
        5. Margin Calls
        6. The Shake Down
      2. Toshihide Iguchi and Daiwa Bank
      3. Kent Ahrens and First Capital
      4. Joseph Jett and Kidder Peabody
      5. Summary
      6. Endnotes
    4. 15. Invest to Win and Avoid the Blunders
      1. Getting on the Right Track
      2. Financial Goals (Your Destination)
      3. Investment Return
      4. Asset Allocation
      5. Implementation
        1. Index Mutual Funds
        2. Indexing with Exchange Traded Funds
          1. Differences Between ETFs and Traditional Mutual Funds
      6. Implementation in the Real World
      7. Continuing Process
      8. Summary
      9. Endnotes
    5. Exchange Traded Funds