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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Joben rated it it was amazing Mar 24, And that is where this book comes useful. During the course of my investing education I bought into index investing for a brief period of time and gave up because the returns were not in sync with that of the respective indices.

One, rapid PE expansion to abnormal levels and two, entry of new and small companies into market through IPO. This way Index is never resting on the past laurels and is always focused on future potential. Value Investors should know value investing and behavioral finance by parag parikh difference between the above concepts of value and only buy those companies that has good value in exchange which appreciates over time.

Value Investing And Behavioral Finance by Parag Parikh Tata McGraw-Hill EducationDec 1, – pages 2 Reviews Smart and successful way of investing calls for a thorough understanding of behavioral finance not just market sentiments, crowd behavior or company performance.

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Prabhanjan Behaviorral rated it really liked it Mar 04, Some may be beneficial, some may be detrimental. The chapter analyses the behavior of various stakeholders in IPO market and come to the conclusion that the idea that IPOs are normally under-priced is incorrect. When a sector becomes fancy, investors start hearing a lot about the prospects of the sector availability heuristicvalue investing and behavioral finance by parag parikh the stocks in finznce sector appreciate irrespective of fundamentals Representative Heuristiceveryone starts investing in the sector Herdingeveryone becomes optimistic OverconfidenceTaking wrong decisions Winner’s curse, as when TISCO purchased CORUS etc.


The key objective of the book is to sensitize the readers to many decision making patterns called ‘Heuristics’ that an individual investor uses when behaviorzl in equity market. Also a very rare finding because very very few Indians have contributed to the field of behavioral finance.

Investors want answers to four questions.

Praise for Value Investing and Behavioral Finance

Each phase of a bull market is led by different sectors. Contrarian investor is one who goes against the conventional wisdom when picking investment opportunities. However if you are new to value investing the book goes well, however if you already did read many others in value investing, you can skim through.

Just a moment while we sign you in to your Goodreads account. At the time of writing this book the Indian market had corrected from a high of to about Manoj rated it really liked it Jun 26, Contrarian Investing is the focus of Chapter 4. In its quest for instant gratification, it has woven a web of complexity to confuse the investors. I got answers to both these questions when I was reading the chapter on ‘Index Investing’ in this book.

value investing and behavioral finance by parag parikh

Value Investing And Behavioral Finance – PARIKH PARAG. – Google Books

The behavior heuristics followed by investors chasing growth stock are Availability Heuristics: Investors should be very careful when investing in sectors. As Livermore mentions in the book Reminiscences 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, vy will cover the entire coast of England’.

Few chapters actually present some very simple but interesting insights backed by data e. This book is well structured through its 12 chapters taking the reader through the behavioral impact on various aspects Indian equity markets. Kushagra Mittal rated it it was amazing Jun 19, The other point is that the basic cause of failure is our penchant for ‘Instant Gratification’. 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.


value investing and behavioral finance by parag parikh So what are the bebavioral obstacles to value investing? As a corrective, it spells out long-term value and contrarian investing strategies based on the principles of behavioral finance. In the chapter on IPOs, I read about how the companies and that investment managers have a motivation to inflate the price of IPO offering. Corporations focus on continuity. Fundamentals deal with the returns from growth in earnings and dividends.

Some of them are: No book ever has done valke work on Indian Stocks.

Value Investing and Behavioral Finance by Parag Parikh – Review by Manish Bansal

ijvesting Speculative component is due to PE expansion or contraction. Chapter two talks of human behaviors applicable to stock market and how these behaviors make the market risky for investors.

Trivia About Value Investing A Manish Bansal manish smevalueadvisors. It is very important to get out at the right time. Return to Book Page. Lists with This Book.

Chapter 11 on Bubble Trap answers these questions. As readers of my blog, especially of the Book Review Series on 50 Books on Financewill no doubt know, I love reading and reviewing books that contain pearls of wisdom, great insights and which are conceptually compelling.