Mean Markets and Lizard Brains: How to Profit from the New Science of Irrationality
Author(s): Terry Burnham (Author)
Publisher: Wiley
Publication Date: 17 Oct. 2008
Edition: 1st
Language: English
Print length: 336 pages
ISBN-10: 0470343761
ISBN-13: 9780470343760
Book Description
Everyone from journalists to market pros are turning to behavioral finance to explain, analyze, and predict market direction. In contrast to old-school assumptions of cool-headed rationality, the new behavioral school embraces hot-blooded human irrationality as a core feature of both individuals and financial markets. The 2002 Nobel Prize in Economics was awarded to scholars of this new scientific approach to irrationality. In Mean Markets and Lizard Brains, Terry Burnham, an economist who has a proven ability to translate complex topics into everyday language, reveals the biological causes of irrationality. The human brain contains ancient structures that exert powerful and often unconscious influences on behavior. This "lizard brain" may have helped our ancestors eat and reproduce, but it wreaks havoc with our finances. Going far beyond cataloguing our financial foibles, Dr. Burnham applies this novel approach to all of today's most important financial topics: the stock market, the economy, real estate, bonds, mortgages, inflation, and savings. This broad and scholarly investigation provides an in-depth look at why manias, panics, and crashes happen, and why people are built to want to buy at irrationally high prices and sell at irrationally low prices. Most importantly, by incorporating the new science of irrationality, readers can position themselves to profit from financial markets that often seem downright mean. Mean Markets and Lizard Brains skillfully identifies the craziness that is part of human nature, helps us see it in ourselves, and then shows us how to profit from a world that doesn't always make sense.
Editorial Reviews
From the Inside Flap
Praise for Mean Markets and Lizard Brains
"You can win the battle with your own brain." —Investor's Business Daily
"A useful guide to avoiding poverty." —Financial Times
"Most investors lose money time and again, and they never understand why. They think the market makes no sense, and—guess what—it doesn't, at least to most humans. But to the great lizard brain, all is clear. Successful traders and investors know what the lizard knows. They understand and exploit the very things that Terry Burnham teaches you in this book. Now it's your turn to 'get it.' When you finally do, mean markets will turn into friendly ones." —Robert R. Prechter, author of Socionomics: The Science of History and Social Prediction
"Mean Markets and Lizard Brains translates neuroeconomics and cutting-edge theories of human behavior into practical advice. While the causes of costly decisions often lie outside our conscious awareness, they need not remain a mystery. The writing is provocative and insightful." —Professor Vernon L. Smith, Nobel Prize winner in Economics
"A lively and entertaining account of the emerging field of neuroeconomics, where Fear and Greed meet Nature, red in tooth and claw, with some surprisingly practical implications for individual investors, portfolio managers, and other market prognosticators." —Andrew W. Lo, Harris & Harris Group Professor, MIT Sloan School of Management, and Director of MIT's Laboratory for Financial Engineering
About the Author
Terry Burnham is a leader in the application of biology to economics and finance. He is the Director of Economics at Acadian Asset Management LLC, and a research scientist at Harvard University. He was an economics professor at Harvard for many years, and has been an active and extremely successful participant in the financial markets for over twenty years. Dr. Burnham has a PhD in business economics from Harvard University, a master's in finance from MIT, an MS in computer science from San Diego State University, and a BS in biophysics from the University of Michigan. He is also a coauthor of the international bestseller Mean Genes: From Sex to Money to Food, Taming Our Primal Instincts.
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