Robert Shiller: Animal Spirits and Phishing for Phools
Trader's Library #88 · Market history, crises and scandals. Two Nobel laureates on emotions in the economy and how the market hooks the naive.
Author: Robert J. Shiller, George A. Akerlof · Original: Animal Spirits; Phishing for Phools · Year: 2009 · Usefulness for traders: ★★★☆☆
What it's about
Two books by Nobel laureate Robert Shiller, written with another laureate, George Akerlof. “Animal Spirits” describes how confidence, stories and emotions drive the economy and markets. “Phishing for Phools” shows how the market exploits our weaknesses.
What it gives a trader
Shiller, who foresaw the dot-com and housing bubbles, teaches that stories (narratives) move markets as much as data do. “Phishing for Phools” is a reminder that the market sells what tempts us, not necessarily what serves us – in the world of products for traders too.
Lessons for traders
- stories move markets as much as data do (the narrative fallacy, Atlas of biases #26)
- the market sells what tempts us
- confidence and sentiment change in waves
What to watch out for
More economics and policy than markets. His “Irrational Exuberance”, on stock and housing bubbles, is also worth reading.
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.