The Psychology of Money (Morgan Housel)

Trader's Library #68 · Investing and the stock market. Short essays on how money is above all about behaviour.

Author: Morgan Housel · Original: The Psychology of Money · Year: 2020 · Usefulness for traders: ★★★★☆

What it's about

Short essays on how in finance behaviour matters more than knowledge: on the role of luck and risk, compounding, what “enough” is, and why people do things that look crazy from the outside.

What it gives a trader

Housel reminds us that survival is the most important feature of financial success. For a trader it's a warning about the risk of ruin and about comparing yourself with others. The best of these books to recommend to people outside trading.

Lessons for traders

• survival matters more than maximum profit
• luck and risk are two sides of the same coin (self-serving bias, Atlas of biases #14)
• know when you have enough: no limit leads to excessive risk

What to watch out for

More about personal finance than trading. The essays are light and short.

Discussion

The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →

Navigation

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Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.