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Think Like the Great Investors: Make Better Decisions and Raise Your Investing to a New Level

ISBN: 978-1-118-58714-0
280 pages
September 2013, Wrightbooks
Think Like the Great Investors: Make Better Decisions and Raise Your Investing to a New Level (1118587146) cover image


Achieve a new level of investing and trading success by defeating your worst enemy—yourself

Successful trading relies on three vital skills: market analysis, money management, and decision-making. The first two are straightforward skills anyone can learn, but the third is much more difficult. Your ability to make the right decisions isn't based on hard facts, but psychological realities like your own temperament, your own biases, and the biases of other traders. In essence, you can only master the stock market when you master yourself first, and that starts with making the right decisions habitually. Think Like the Great Investors is organised into four distinct parts that show you how to understand your own temperament, the psychology of the market as a whole, your own biases and decision-making errors, and how to practically apply your understanding of these factors into your decision-making system.

  • Written by highly respected investment teacher, speaker, and writer Colin Nicholson
  • Ideal for both inexperienced traders who want to lower their risk as well as experienced traders who lack that one final piece in the trader's skillset

For anyone looking for that final piece of the investing puzzle, the answer is right here. With Think Like the Great Investors, you'll leap beyond the final hurdle to super-successful investing . . . yourself.

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Table of Contents

About the author xi

Important note xiii


1 Shaping our destiny 3

2 Men and women (overconfidence) 7

3 I am absolutely certain (overconfidence, confirmation and availability) 13

4 Mine, all mine (mental accounting) 33

5 Why we never learn (reinforcement and punishment) 41

6 Love is blind (cognitive dissonance) 47

7 A little knowledge is dangerous (representativeness) 53

8 It must be tails next (the gambler’s fallacy) 59

9 Dangerous rewards (random reinforcement) 69

10 How much is it? (anchoring) 73

11 Reconstruction (hindsight) 81

12 Why we get it wrong (disposition effect and prospect theory) 87

13 We cannot change the past (the sunk cost fallacy) 95

14 I remember it all too well (availability revisited) 101

15 What goes up . . . (small numbers, reversion to the mean) 107

16 What is it worth? (overreaction) 113

17 He who hesitates is last (inertia) 119

18 What do you want to do? (regret) 127

19 Ask why not? (confirmation revisited) 135

20 I want it now (impulsiveness, immediate gratification) 141

21 Tell me why (randomness) 147

22 It can’t happen (normalcy) 153


23 Mob rule (crowds) 163

24 Notes and commentary on Gustave Le Bon's The Crowd 169

25 Contrary to popular belief . . . 187


26 Nine keys 195

27 Failure traits 199

28 Dealing with loss 203

29 Plan to succeed 207

30 Seven investing sins 211

31 The wall 215

32 Capitulation 219

33 Tough going 225

34 Be early 229

35 Blinded by fear 235

36 Conquer fear 239

Further reading 243

Index 247

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Author Information

COLIN NICHOLSON BEc, SF Fin has been investing his own money in Australian shares for over 45 years and publishes his returns on his website www.bwts.com.au. He has taught both technical analysis and fundamental analysis at a postgraduate level. Students at the Securities Institute of Australia rated him an 'Outstanding Presenter'. Colin has been a highly ranked speaker at Australian Investors Association and Australian Technical Analysts Association conferences as well as being a sought-after speaker to investing associations and at expos nationally. He has written five books on investing, including Building Wealth in the Stock Market, The Psychology of Investing, The Aggressive Investor, Hot Stocks 2007, and Hot Stocks 2008.

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