A Mathematician Plays the Stock Marketby John Allen Paulos
Pub. Date: 05/03/2004
Publisher: Basic Books
In A Mathematician Plays the Stock Market best-selling author John Allen Paulos demonstrates what the tools of mathematics can tell us about the vagaries of the stock market. Employing his trademark stories, vignettes, paradoxes, and puzzles (and even a film treatment), Paulos addresses every thinking reader's curiosity about the market: Is it efficient/i>… See more details below
In A Mathematician Plays the Stock Market best-selling author John Allen Paulos demonstrates what the tools of mathematics can tell us about the vagaries of the stock market. Employing his trademark stories, vignettes, paradoxes, and puzzles (and even a film treatment), Paulos addresses every thinking reader's curiosity about the market: Is it efficient? Is it rational? Is there anything to technical analysis, fundamental analysis, and other supposedly time-tested methods of picking stocks? How can one quantify risk? What are the most common scams? What light do fractals, network theory, and common psychological foibles shed on investor behavior? Are there any approaches to investing that truly outperform the major indexes? Can a deeper knowledge of mathematics help beat the odds?All of these questions are explored with the engaging erudition that made Paulos's A Mathematician Reads the Newspaper and Innumeracy favorites with both armchair mathematicians and readers who want to think like them. Paulos also shares the cautionary tale of his own long and disastrous love affair with WorldCom. In the tradition of Burton Malkiel's A Random Walk Down Wall Street and Jeremy Siegel's Stocks for the Long Run, this wry and illuminating book is for anyone, investor or not, who follows the markets-or knows someone who does.
- Basic Books
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- 5.30(w) x 7.96(h) x 0.60(d)
Table of Contents
|1||Anticipating Others' Anticipations||1|
|2||Fear, Greed, and Cognitive Illusions||13|
|3||Trends, Crowds, and Waves||37|
|4||Chance and Efficient Markets||57|
|5||Value Investing and Fundamental Analysis||85|
|6||Options, Risk, and Volatility||117|
|7||Diversifying Stock Portfolios||141|
|8||Connectedness and Chaotic Price Movements||163|
|9||From Paradox to Complexity||187|
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Most Helpful Customer Reviews
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I really like this book, and you might too, if you treat it as what it is -- a series of (usually amusing) observations and anecdotes about how stock prices change as a result of peoples perceptions about how stock prices change.
Here are some of the gems:
ON GREED: The guy who found a $5 casino chip, and through a series of bets built up a multi-million pound fortune; then lost it all on the final spin of the wheel, and when reporting back to his wife said that he had "only lost $5".
ON FUNDAMENTALS: Worldcom had an extremely low P/E (which we would naively assume to be a good thing) just before going bankrupt.
Paulos draws mathematical analogies occasionally, but not as often as you might think from the title. It is very accessible to non-mathematicians; who can take the examples at face value, laugh at them, and try to learn something from them.
This book won't make you rich, but it will make you think -- and laugh.