Book Review : Mean Markets And Lizard Brains
I usually read books to help me find trading and indicator ideas. This book doesn’t really address either of those points. This is more about the psychology of trading and ‘beahvorial finance’.  It is more of a ‘Intro To Behavioral Finance” you might say.
 I have talked about behavioral finance before here .
This book caught my eye because [1] It had a picture of a lizard on it , and [2] Taleb recommended it, and I am a big fan of his even if I think he is a bit too pompous on TV.
SHORT REVIEW
Good book if you liked Taleb’s Black Swan book. It is an easy read and makes you think about how our ‘Lizard Brain’ causes us to make crappy trading decisions. Recommended.
Keep reading for the full review.
INTRO BEHAVIORAL FINANCE
The author , Terry Burnham, worked on behavioral finance for 10 years at Harvard including teaching, which puts him in the egg head category.
The book is divided into four sections. The first part , The New Science of Irrationality, and the last part, Profiting from the New Science of Irrationality are the most interesting to me.
EDUTAINMENT
The book tries to Edutainment ( hat tip to Boogie Down Productions) , which is entertaining and educational. It does not excel at either , but also does not fail.
Edutainment (also educational entertainment or entertainment-education) is a form of entertainment designed to educate as well as to amuse.
There are a lot of stories in the book, and I think this guy would have been a pretty fun professor in class.Â
 If you have been around for a while, you probably have heard a lot of these stories, but he does put them into context.  Things like German Hyperinflation, the chances of making it to the NBA and ‘This is Spinal Tap’ quotes.
LIZARD BRAIN
The book centers around our ‘lizard’ brains. Which is non ‘pre frontal cortex part of our brain. The ‘pre-fontal cortex is what we use for rational thought, trading decisions, etc.
The rest of our brain, the lizard part , is responsible for everything else. Fight or flight, loss aversion, fear of being eaten and things like that are all handled by our lizard brains.
The final part of the book gives rules on how we can invest without out using our lizard brains.
GOOD PARTS
- Excellent intro to behavioral finance
- Good attempt at making a subject more relatable
- The author was bearish on the market in 2005
NOT SO GOOD PARTS
- The book is dated. Has a lot of references to the housing crisis.
- Tries to be ‘edutainment’, does neither well
- The author was bearish on the market in the book
It is surprising hard to write a post about this book without overusing the term Lizard brain. My apologies.