Book Review > Fear, Greed and Panic

The author is a psychologist, writer and film-maker. It examines the British market (FTSE) and looks at the market from a psychologist's point of view as to how brokers behave and their relationship with clients.
The author examines the real stockmarket, not the share prices or companies. In fact the book suggests that Economic Facts are LESS IMPORTANT than feelings, for both the professional investor and lay people.
I found it heavy reading to start, but once into the book you realize the extensive research and interviewing of the brokerage industry and how the markets really work from a psychological point of view.
Cohen points out that almost all brokers he interviewed told him that the psychology of the market was simple. Markets are driven by greed and fear, and human nature doesn't change. It certainly is an intersesting insight into the investment industry and at times the author is direct as to what he uncovered during his analysis of the market. For example, "The worst private client, though few brokers will say so publicly, are those who are on the phone all the time, wanting advice, needing a chat, those who actually insist on a relationship and demand to know more than every six months how brokers are handling their money."
However the book also gives insight into how brokers do have a good and trusting relationship with clients. It also may help the individual investor to better understand their own psychology and how you react under pressure.
Towards the end of the book the author introduces dry shares and wet shares. Dry shares do not arouse emotional associations easily e.g Vodaphone, Amazon, British Biotech. Wet shares arouse high emotional associations e.g. Sainsbuury's, Marks & Spencers, The Body Shop, Manchester United. They arouse strong feelings and loyalty, both conscious and unconscious. They can attract emotional support which can outweigh financial realities.
All in all an intersesting read and I conclude with this snippet from the book (tongue in cheek):

"Keep the psychological high ground. Find out the personality of your broker. Try this test...Offer him or her a boiled sweet (oz lollie).If he sucks it slowly fine. If he crunches it and eats up the little pieces, beware he is an impatient oral type and may lose you lots of money."

Author note...(I DO NOT CLAIM TOTAL RELIABILITY FOR THIS TEST, but of course, to try it you have to meet your broker face to face. For many clients, the broker is just a voice on the phone.)