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Too Smart for Our Own Good
Book

Too Smart for Our Own Good

Ingenious Investment Strategies, Illusions of Safety, and Market Crashes

McGraw-Hill, 2018 más...


Editorial Rating

8

Qualities

  • Analytical
  • Concrete Examples
  • Insider's Take

Recommendation

You might think that financial crises are mathematically unlikely events, but they happen with surprising frequency. Author and equity manager Bruce I. Jacobs says there’s something wrong about that. He believes that people’s attitudes about risk, liquidity and leverage are often delusional and naive because financial professionals sell them “free-lunch” strategies that promote flawed thinking about efficient markets and rational investors. Despite a tendency for repetition, Jacobs offers some hard-hitting wisdom gleaned from his detailed knowledge and experience in market investing. Fund managers and investors of all types will find value in his exploration of the common causes of financial calamities.

Take-Aways

  • Misconceptions and gullibility cause some investors to make the same financial mistakes over and over again.
  • In the 1980s, investors bought “portfolio insurance” to secure stock gains in the decade’s bull market. 
  • But this “free-lunch” investment strategy backfired in the 1987 crash.

About the Author

Bruce I. Jacobs is the co-founder and co-director of Jacobs Levy Equity Management. He is the author of several books on investing and financial crises.


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