Investment Blunders of the Rich and Famous-- and what You Can Learn from Them

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FT Press, 2002 - Business & Economics - 302 pages
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Every investor -- even the world's most prominent and respected investors -- are subject to the foibles of human psychology. Now, John Nofsinger, identifies the most common investor mistakes through the prism of the world's most public investment catastrophes. Using other people's money and other people's disasters, Investment Blunders teaches a wide range of critical lessons every investor must learn. John Nofsinger shows how to avoid the overconfidence displayed by John Meriwether and David Mullins, and by Nobel laureates Myron Scholes and Robert Merton, the founders of the failed Long Term Capital Management hedge fund. He demonstrates how to avoid the hubris that nearly destroyed KKR in its bidding war over RJR Nabisco; how to identify and control the greed that sank Michael Milken and many of his contemporaries; and how to keep sight of the fundamentals, avoiding the disastrous investments that led to the 1980s' S&L crisis. Read each Blunder, and you will learn of a common error that you can avoid in the future.

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CHAPTER 1 Other Peoples Problems
PART 1 SelfInflicted Common Problems
CHAPTER 2 Behavioral Finance
CHAPTER 3 Patterns and Predictions
CHAPTER 4 Mood Optimism and Investing
CHAPTER 5 Profits from the Prophets?
CHAPTER 6 Foolish Risks
PART 2 Trying to Beat the Market
CHAPTER 11 Get Rich Quick
PART 3 Colossal Blunders
CHAPTER 12 The Eggheads Crack
CHAPTER 13 An Orange Squeezed
CHAPTER 14 Betting the Bank
CHAPTER 15 Invest to Win and Avoid the Blunders
APPENDIX Exchange Traded Funds

CHAPTER 7 Timing the Market
Carrying the Load
CHAPTER 10 The Social Investor
Inside Back Cover
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Page viii - Restoring Confidence in America's Companies John R. Nofsinger Investment Blunders (of the Rich and Famous)... And What You Can Learn from Them John R. Nofsinger Investment Madness: How Psychology Affects Your Investing. . .And What to Do About It H.

About the author (2002)

JOHN R. NOFSINGER is a finance professor, Department of Finance, Insurance, and Real Estate at Washington State University and one of the world's leading experts in investor psychology and behavioral finance.

Written with Richard W. Sias, Nofsinger's 1997 paper "Herding and Feedback Trading by Institutional Investors" was awarded "Best of the Best" and "Best Paper in Investments" by the Financial Management Association. He has also done advanced research for the New York Stock Exchange and the Association for Investment Management and Research.

He has been interviewed and quoted in financial media including The Wall Street Journal, Fortune, BusinessWeek, SmartMoney, Bloomberg, and the cable news network CNBC, as well as other media from the Washington Post to

Nofsinger holds a Ph.D. in Finance from Washington State University and taught for five years at Marquette University. His Financial Times Prentice Hall books include Investment Madness: How Psychology Affects Your Investing...and What to Do About It and The Psychology of Investing.

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