Markets Never Forget (But People Do): How Your Memory Is Costing You Money--and Why This Time Isn't Different [NOOK Book]

Overview

Why do so many investors make the same mistakes repeatedly — being too bullish or too bearish at just the wrong times? Because they forget. Forgetting pain is an instinct — humans have evolved that way to better cope with the problems of survival. But for the complex and often counterintuitive world of investing, it causes serious errors.

“This time it’s different” are the four most expensive words in the English language (according to investing legend Sir John Templeton). Yet many investors routinely fall into ...

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Markets Never Forget (But People Do): How Your Memory Is Costing You Money--and Why This Time Isn't Different

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Overview

Why do so many investors make the same mistakes repeatedly — being too bullish or too bearish at just the wrong times? Because they forget. Forgetting pain is an instinct — humans have evolved that way to better cope with the problems of survival. But for the complex and often counterintuitive world of investing, it causes serious errors.

“This time it’s different” are the four most expensive words in the English language (according to investing legend Sir John Templeton). Yet many investors routinely fall into the trap of thinking “now” (whenever “now” is) is different somehow. In Markets Never Forget (But People Do): How Your Memory Is Costing You Money — and Why This Time Isn’t Different, four-time New York Times bestselling author Ken Fisher shows readers how their memories play (often costly) tricks on them—and how they can combat their faulty memories with just a bit of history.

This isn’t to say history repeats itself perfectly. It doesn’t — but a recession is a recession. Some are vastly worse than others — but investors have lived through them before. Credit crises aren’t new, nor are bear markets — or bull markets. Geopolitical tension is as old as mankind, as is war and even terrorist attacks. Understanding how investors have reacted to similar past events can help guide investors in shaping better forward-looking expectations. The past never predicts the future, but it can reduce guesswork about what’s ahead.

In this book, Fisher takes aim at some major market memory mishaps — like the idea stocks have become inherently more volatile or that wildly above- or below-average returns are abnormal. He shows how, early in every recovery, investors don’t believe in it — often at a huge cost. And he shows how, in investing, ideology is deadly. Most important, he teaches how you can use history as one powerful tool to help begin reducing your error rate and help begin getting better investing results.

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Product Details

  • ISBN-13: 9781118167601
  • Publisher: Wiley
  • Publication date: 10/18/2011
  • Series: Fisher Investments Press , #33
  • Sold by: Barnes & Noble
  • Format: eBook
  • Edition number: 1
  • Pages: 240
  • Sales rank: 666,445
  • File size: 6 MB

Meet the Author

Ken Fisher is best known for his prestigious "Portfolio Strategy" column in Forbes magazine, where his over 27-year tenure of high-profile calls makes him the fourth longest-running columnist in Forbes's 90-plus year history. He is the founder, Chairman and CEO of Fisher Investments, an independent global money management firm managing tens of billions for individuals and institutions globally. Fisher is ranked #252 on the 2010 Forbes 400 list of richest Americans, and #736 on the 2011 Forbes global billionaires list. In 2010, Investment Advisor magazine named him among the 30 most influential individuals of the last three decades. Fisher has authored numerous professional and scholarly articles, including the award-winning "Cognitive Biases in Market Forecasting." He has also published seven previous books, including New York Times and Wall Street Journal bestsellers, The Only Three Questions That Count, The Ten Roads to Riches, How to Smell a Rat and Debunkery, all published by Wiley. Fisher has been published, interviewed and/or written about in many major American, British and German finance or business periodicals. He has a weekly column in Focus Money, Germany's leading weekly finance and business magazine.

Lara Hoffmans is a content manager at Fisher Investments, managing editor of MarketMinder.com, a regular contributor to Forbes.com and co-author of the bestsellers, The Only Three Questions That Count, The Ten Roads to Riches, How to Smell a Rat and Debunkery.

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Table of Contents

Preface

Acknowledgments

Chapter 1 The Plain-Old Normal

Yes Sir, Sir John

The Normal Normal

The Jobless Recovery

The Always Feared, Rarely Seen Double-Dip

Chapter 2 Fooled By Averages

Bull Markets Are Inherently Above Average

Viva the V

Normal Returns Are Extreme, Not Average

The Pause That Refreshes (And Confuses)

Getting Average Returns Is Hard—Really Hard

Chapter 3 Volatility Is Normal—and Volatile

What the Heck Is Volatility

Volatility Is Volatile

The Daily Grind

Stocks Are Less Volatile Than Bonds?

Economic Volatility—Also Normal

Volatility Isn't Bad, It's Good!

Never a Dull Moment

Chapter 4 Secular Bear? (Secular) Bull!

Seeing the World Through Bear-Colored Glasses

Two Secular Bear Markets?

Stocks—Up Vastly More Than Down

Chapter 5 Debt and Deficient Thinking

Deficits Aren't Bad, But Surpluses Will Kill You

The History of Big Government Debt

Just Who Is at Default Here?

Chapter 6 Long-Term Love and Other Investing Errors

No One Category Is Best for All Time

Long-Term Love Is Like Long-term Forecasting—Both Wrong

It's Still Heat Chasing Even When It Seems “safe”

Use History to Your Advantage

Chapter 7 Poli-Ticking

Enter the Ideology-Free Zone

Your Party Isn't Better

Presidents and Risk Aversion

Perverse Inverse—It's Four and One

Poli-Tics Go Global

Poli-tics Versus Entrepreneurs

Chapter 8 It's (Always Been) a Global World After All

It's Always Been a Small World

Seeing the World Right

Conclusion

Appendix A

There's No Place Like Kansas

Notes

Index

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Customer Reviews

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Sort by: Showing all of 2 Customer Reviews
  • Anonymous

    Posted August 30, 2013

    Highly recommended

    Another well-written book by Ken Fisher, an investing superstar! He teaches you how to use history to separate investing fact from fiction. I would buy every book he writes.

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  • Posted January 17, 2012

    Revealing how memory mistakes fail us in critical decissions..insightful!!

    Deep analysys in common and not that common memory shortcomings, stressing the importance of prior researching to minimize costly investment decissions. A Must Reading For Every Level Of Investor!!

    Was this review helpful? Yes  No   Report this review
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