Phil Pearlman, executive editor of Stocktwits, wrote an insightful article discussing “that universities still do not formally teach the study of price behavior (technical analysis)!” Read entire article here
Phil goes on to say …”The study of price behavior is as basic to markets as the study of human behavior is to psychology. It is directly observable.”
My mentor, Sir John Templeton shared that outside of the Bible, the most important book he had ever read was the “Extraordinary Popular Delusions and the Madness of Crowds” by Charles Mackay.
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Why did Sir John feel this book was so important that he made it a mandatory read for his portfolio managers? He believed it was important to study human behaviors throughout history. What is a chart? A visual picture of how investors feel about an asset.
Sir John was one of the greatest fundamental investors of all time. What else was he good at? Understanding human behaviors! Sir John suggested that I read this book almost 20 years ago and I was lucky that he gave me a copy of this book, published by his own publishing company. I am forever grateful to him for getting me this book and I have benefited greatly from reading it!
If you are interested in understanding more about human behavior and how it can impact investments, give this book a read!