1 Dec Smart and successful way of investing calls for a thorough understanding of behavioral finance not just market sentiments, crowd behavior or. Value Investing And Behavioral Finance. Front Cover. PARIKH PARAG. Tata McGraw Hill Education Pvt. Limited, – Electronic books. Value Investing and Behavioral Finance: Insights into Indian Stock Market Realities [Mr. Parag Parikh] on *FREE* shipping on qualifying offers.

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This involves macro economic analysis, industry analysis, company analysis, talking to the company There are two types of value, Value in use and Value in Exchange.

The division of actual returns into real returns and speculative returns is something that I learned from this book. As I mentioned in the beginning, the field of equity investing is heavily influenced by the emotions and behavior of the investors.

Akshay Singh rated it really liked it Mar 01, Some investors may be focused on the Organization, for some others focus may be on the management, for some it will be strategic direction of the company and some others may be only focused on the financials. Market goes through the phases of so called emotional disorders under fear and greed. No eBook available Amazon.

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Another point discussed is ‘winner’s curse’, where uninformed investors tend to get full allocation of bad IPOs, I remember receiving full allocation of Orient Green IPO and lost money heavily. Also check out their web-site www. The bankers to the issue get their bonuses depending on how much money the IPO can accumulate from the nivesting. Corporations focus on continuity. Aug 07, Amrutayan Pati rated it liked it.

Praise for Value Investing and Behavioral Finance

It is very important to get out at the right time. An understanding of these emotions is primary to become a successful investor. Bubbles start to form based on real information.


Key recipe for success is the ability to lnvesting our goals and the self discipline to ignore temptations and strive relentlessly towards achieving those goals.

Investing is simple, but the industry has made it complicated. Despite the stock being a growth stock, the investor do not gain any return since he paid a high price for the stock. Lots of his videos are also available on www. The key objective of the book is to sensitize the readers to many decision making patterns called ‘Heuristics’ that an individual investor uses when investing in equity market.

Value Investing And Behavioral Finance: Insights Into Indian Stock Market Realities

To understand this one must know the difference between the philosophies driving a corporation and index. Author illustrates growth trap through multiple examples from Indian Markets. This approach is close to my heart. Author discusses the absence of Availability Heuristics not much information is available about those companies unlike private finnce company which is tracked by every analyst and his mother in law and Herding – All PSUs are grouped together, as some of the reasons for this.

Book also carries interesting quotes. Want to Read saving…. The motivation for the company coming to IPOs is to get as much money from the market as possible, so they have a motive to steeply price the IPO. In its quest for bejavioral gratification, it has woven a web of complexity to confuse the investors.

And still we are talking about ‘India being at the beginning of the next bull market’.

Value Investing And Behavioral Finance – by Parag Parikh – Google Books

Contrarian Pariih is the focus of Chapter 4. Kumar Diwesh rated it liked it Apr 18, Value Research has given 5 Star rating to some index funds and 2 Star rating to others. This book was written ininvesitng value investing and behavioral finance by parag parikh last major bull run from to was winding down. For example, the cue for the bubble of was the real GDP Growth from 6 to 9 percent. Goodreads helps you keep track of books you behaviiral to read.


Chapter 2 titled ‘Understanding Behavioral Trends’ starts off by looking at the two components of equity returns vis. As soon as they see PE expanding beyond reasonable limits, they should sell and exit. He will be alert to the representative heuristics and will not invest in all the stocks in a sector just because the sector is going up. As Livermore mentions in the book Ajd of a stock operator’If all the people who lost money waiting for the first 5 percent or last 5 percent and laid end to end, they will cover the entire coast of England’.

Smart and successful way of investing calls for a thorough understanding of behavioral finance not just market sentiments, valje behavior or company performance. Behavioral obstacles to value investing include Recency effect – giving more importance to recent information at the cost of inveshing but relevant information, Prospect theory – People give more value to value investing and behavioral finance by parag parikh aversion over profits and tend to sell off profitable investments soon and tend to keep and add to the loss making investments in their portfolio and Instant Gratification – Not having the patience to stay invested over a significant period of time.