Tuesday, August 15, 2006

Why Smart People make Big Money Mistakes

If you have any interest in behavioral finance or if you are looking for simple examples for class, I would definitely recommend "Why Smart People make Big Money Mistakes" by Gary Belsky and Thomas Gilovich.

I bought it for the examples and it has proven to be a very quick, easy, yet informative and fun read!

For instance it deals with problems people have figuring out odds (the example
is instantly memorable and informative:

* Is a shy, meek, yet helpful person more likely to be a librarian or in sales? Are you sure? Be careful. Why? Because there are about 75 times as many people in sales as there are librarians!

Virtually every page is made up of such great examples.

Another example?

*Ok, suppose you are going to a sporting event and lose your ticket. Do you buy a new ticket? What if you had lost money instead of a ticket (and assuming you could resell your ticket). Do you go then?

True it breaks little new ground, but isn't it fun just to sit back and enjoy finance?

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