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This book has potential, but it fails to meet it. I found it littered with unquestioned assumptions,  (trading stocks is a zero sum game ) misleading analogies, (prices are like coin tosses) and other comments that undermine market credibility. He cites one example of a friend who bought stock at $1.00, watched it go to $8.00 and then come back to $3.00. Very bad according to the text, but many readers would still be happy with a  300% profit!


Perhaps the best example of the problems with this book is the failure to understand the survivor bias in the construction of Indexes. Winner, or survivor bias, means that the index is comprised only of winners. It is a less than accurate way to measure market performance. He discusses survivor  bias on page 169, but through the use of a basketball analogy manages to  miss the essence of the problem. His conclusion: US Stock returns suggest that the US has been the luckiest of all countries. 


Statements such as “In a rational market, prices move like coin flips,” are indicative of the conceptual problems with the rest of the book.  Failure to understand that price events are dependant events and that coin flips are independent events leads to some unusual conclusions. The challenge is not between rational and irrational behavior, but in the way that different people take what they believe to be rational action and develop many  responses to a single situation. Understanding this behavior gives a trading edge. The lizard brain does have as role to play, but not in this book.


Those who trade the market will find this book has  little to offer in terms of new perspectives.


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