John Allen Paulos9781567318289, 0-465-05480-3
Can a renowned mathematician successfully outwit the stock market? Not when his biggest investment is WorldCom.
In A Mathematician Plays the Stock Market, best-selling author John Allen Paulos employs his trademark stories, vignettes, paradoxes, and puzzles to address every thinking reader’s curiosity about the market-Is it efficient? Is it random? 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? Are there any approaches to investing that truly outperform the major indexes?
But Paulos’s tour through the irrational exuberance of market mathematics doesn’t end there. An unrequited (and financially disastrous) love affair with WorldCom leads Paulos to question some cherished ideas of personal finance. He explains why ”data mining” often leads to self-fulfilling beliefs, why ”momentum investing” is nothing more than herd behavior with a lot of mathematical jargon added, why the ever-popular Elliot Wave Theory cannot be correct, and why you should take Warren Buffet’s ”fundamental analysis” with a grain of salt.
Like Burton Malkiel’s A Random Walk Down Wall Street, this clever and illuminating book is for anyone, investor or not, who follows the markets-or knows someone who does.
Table of contents :
TeamLiB……Page 0
Cover……Page 1
Contents……Page 8
1 Anticipating Others’ Anticipations……Page 10
2 Fear, Greed, and Cognitive Illusions……Page 22
3 Trends, Crowds, and Waves……Page 46
4 Chance and Efficient Markets……Page 66
5 Value Investing and Fundamental Analysis……Page 94
6 Options, Risk, and Volatility……Page 126
7 Diversifying Stock Portfolios……Page 150
8 Connectedness and Chaotic Price Movements……Page 172
9 From Paradox to Complexity……Page 196
Bibliography……Page 212
Index……Page 214
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