The Behavioral Investor
by Daniel Crosby (2018)
I enjoyed this book on behavioural investing a lot (Crosby is a US author, hence the US spelling), and not just because it covers similar ground to my own book The Sceptical Investor. Crosby knows his stuff – he’s a proper psychologist as well as an asset manager – and it’s always fun to read about the long list of flaws that get in the way of our ability to invest, particularly when it’s presented in a chatty, approachable voice.
However, most people who are fans of James Montier or Kahneman and Tversky will have read these sorts of books before, and know the case studies and famous experiments inside out. Where Crosby scores highly and differentiates himself is in gathering these flaws into a manageable mental framework (each falls under one of four main categories of behavioural vice) and then giving practical ideas on how to structure your investment process to avoid falling prey to them. Well worth your time.
