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Behaviour & biases

Value Investing and Behavioral Finance

Parag Parikh

The market's biggest edge is mastering your own greed, fear and herd instinct - value investing works because most people can't sit still.

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Chapters

12
  1. Chapter 01Success and FailureWinners aren't the cleverest - they keep their temperament when others panic, and learn from losses.Read this chapter →
  2. Chapter 02Understanding Behavioral TrendsMarkets move in herds - crowds swing between greed and fear, and prices follow the mood, not just the facts.Read this chapter →
  3. Chapter 03Behavioral Obstacles to Value InvestingYour own mind fights value investing - fear of loss and anchoring to old prices stop you buying cheap.Read this chapter →
  4. Chapter 04Contrarian Investing: The Psychology of Going Against the CrowdThe best prices come when the crowd is fearful - going against the herd is uncomfortable but where value hides.Read this chapter →
  5. Chapter 05Growth TrapA great company can be a terrible investment if you overpay - fast growth already priced in often disappoints.Read this chapter →
  6. Chapter 06Commodity InvestingCommodity businesses are price-takers with no moat - their profits swing with cycles, not skill.Read this chapter →
  7. Chapter 07Public Sector UnitsIn government-owned companies the owner's goals aren't always yours - the minority shareholder comes last.Read this chapter →
  8. Chapter 08Sector InvestingChasing whatever sector is hot means buying high, after the story is already famous.Read this chapter →
  9. Chapter 09Initial Public OfferingsAn IPO is priced to benefit the seller and sold in a hype window - most are bad deals for the buyer.Read this chapter →
  10. Chapter 10Index InvestingA cheap index fund quietly beats most stock-pickers - you keep the returns instead of paying them away in fees.Read this chapter →
  11. Chapter 11Bubble TrapEvery bubble sings 'this time is different' - the greater-fool game always ends, usually suddenly.Read this chapter →
  12. Chapter 12Investor Behavior Based FinanceMarkets aren't perfectly rational machines - they're crowds of emotional humans, and that's the patient investor's edge.Read this chapter →

This is my own plain-English understanding of the book’s ideas, in my own words with my own ₹ examples, laid out against the book’s real chapters so you can relate the two. It is not the book and reproduces none of its text - if it helps, please buy the book. Not affiliated with the author or publisher. The author is not SEBI-registered; nothing here is investment advice.