Conventional wisdom about investing suggests that people are basically rational, markets are basically efficient, and nobody can earn a reward without some risk. One corollary of this conventional wisdom is that individual investors ought to own stocks. Individual investors have been acting conventionally wise - but that may be exactly the wrong thing to do. Author Terry Burnham draws on the relatively new science of behavioral economics - informed by insights into human reasoning that have been discovered by cognitive researchers - and offers investment advice dramatically at odds with conventional wisdom. Burnham, a former Harvard professor with ample experience in finance, puts his thoughts in pop language, drawing not on market studies but on movies and other references to current culture, to make many of his most salient points. What he loses in gravitas, he gains in entertainment value. getAbstract.com finds that this investment book manages to be fun to read, while providing the grain of salt readers should take to temper more conventional economic advice.
In this summary, you will learn
- Why the human brain is not well suited to making investment decisions; and
- How to overcome your "lizard brain" and make sensible investment choices.
About the Author
Terry Burnham, a former economics professor at Harvard, a biological researcher and CFO of a biotechnology firm, is the co-author of the bestseller Mean Genes.
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