Book Review: ‘Financial Speculation: Trading Biases and Behaviour’ by Gerald Ashley

Financial Speculation: Trading Financial Biases and Behaviour
by Gerald Ashley

Reviewed by Max Zeledon

Trading is a risky business for both newbies and experts alike. Indeed, the more we learn about the markets the less confident we feel about our own abilities to manage risk and uncertainty. Are we investing, speculating or gambling when we enter the market? Financial speculation, of course, is the topic of the day and everyone seems to have an opinion. Books on the subject abound and the clichés are almost pornographic in their redundancy. It’s rare to find a good book on trading biases and behavior but Gerald Ashley has written a first-rate book on the subject and the latest edition has been updated marvelously. What is Ashley’s central thesis? Scientists and fancy math models took over the markets (giving us the illusion of sophistication) but the core principles of finance and speculation remain the thing because behind the complex math and jargon is the human variable.

The last thing I wanted to do this summer was read another finance book but that’s precisely what I did when I got Mr. Ashley’s book in the mail. I could not put it down–instead of pondering about useless models and “trading” secrets he dutifully set out to demythologize finance, writing a highly instructive and engaging work full of colorful historical personalities, market anecdotes, and useful lessons that will definitely make you a better trader.

Mr. Ashley provides a fresh assessment of the core principles that have ruled finance for decades and plucks the most useful elements to shows us what really drives the market in booms and busts. He writes with the thirty plus years of experience he accumulated in the financial markets and his passion for the subject is obvious in every page. This is not a book for beginners but you certainly don’t need an MBA to grasp the concepts covered. However, if you want to mature as a trader this is the book for you.