Behavioral Finance and Investment Psychology (Original Book 6Th Edition)

Read this book to gain a deeper understanding of investors' psychological preferences, with the goal of knowing yourself and the enemy, defeating yourself, and outperforming the market. As a researcher of behavioral finance and a professional investment banker, I recognize value investing based on fundamental analysis, and I also agree that technical analysis is effective under certain conditions. However, I believe that if you want to gain a foothold in the ever-changing secondary market, it is important to understand that it is not changes in the fundamentals of investment objects that drive the market, but the psychology of market participants and the resulting behaviors, which form the volatile market performance. Technical analysis objects such as index curves, stock price averages, K-lines, and MACD are the trajectories of capital movements. They are essentially the external manifestations that aggregate many investors' psychological activities. Of course, there are many external factors that affect people's psychology and emotions, and research in this area is still deepening, but this direction is correct. By finding the main factors that affect investor psychology and determining which of them are the most significant factors in the current market, you can basically understand the changing trends of the market. At the same time, understanding the weaknesses of human nature and trying to avoid making the same mistakes yourself is a necessary condition for outperforming the market.