Hedgeye CEO Keith McCullough is back with another edition of “Keith’s Book Club” to discuss Daniel Kahneman’s seminal book, Thinking Fast and Slow. According to McCullough, this must-read book written by the Nobel laureate and founder of behavioral economics has been an invaluable resource in enhancing his approach to investing.
“This book provides a real baseline for understanding, ‘What is behavioral finance?’” McCullough explains in the brief video above. “What this book does is it teaches why human beings should embrace uncertainty.”
(Note: Behavioral finance is a relatively new field that seeks to combine behavioral and cognitive psychological theory with conventional economics and finance to provide explanations for why people make irrational financial decisions.)
McCullough says Thinking Fast and Slow should push anyone “who is not a believer in behavioral finance” to prove “why this isn’t a better way.”
Click here to watch another installment of “Keith’s Book Club” where McCullough explains why Benoit Mandelbrot’s book The Misbehavior of Markets is “the Bible of financial markets.”