Andre Kostolany "Psychology of the stock exchange" [REVIEW]

When we hear that a book tells about the events that took place decades ago, we often find it is just a story that has little to do with the rules governing today's trade. Nothing could be more wrong. In the book "Psychology of the stock exchange" we will find timeless examples that will allow you to look at your own trading differently, especially emotions, which can often significantly interfere with it. 

Andre Kostolany is undoubtedly a rebellious investor. He has not studied economics or psychology and it seems to bother him a bit - because, as he admits, he was often reproached by the academic community. However, he claims that he has it in ... let's say, deep respect, because he earned more on stock exchanges on different continents than professors - precisely because he studied in practice, and not in a library. 

And it must be admitted that it shares them in a fairly accessible way. It is not a trading manual, consisting of charts, numbers, leverage formulas, probabilities and percentages. Yes, we will find stock exchange terms that may be new to some beginners, but all are explained in a transparent way. 

This is the greatest advantage of this book. Anyone who is just starting, or even wants to start their adventure with investing in securities, will understand it. 

Technical or fundamental analysis? No, psychology

Although the author presents his strategy, he does not base it on indicators or their combinations. It focuses on something completely different.

“The stock exchange in the short and medium term consists of  90% in psychology. " - we read in the book "Psychology of the stock exchange".

But the psychology here is not predicting investor behavior, but conclusions based on hard data that form a logical whole. Because how can you not agree that when the price of a given stock reaches the value that most assumed, it will start to fall? After all, if we buy shares costing, for example, PLN 100, which have a growth potential up to PLN 200, it is around this price that most of us will want to sell. And when most of them sell, the price has to go down.

They throw money and everyone runs away

But can it all be that simple? Yes and no. The author gives a lot of examples, but he focuses on one thing: he always earned the most and fastest when he acted completely different from the market. 

War starts and everyone panics? I am buying stocks because they will grow for months. Everyone is selling because the company is in crisis and has losses? I am starting to accumulate because they have a new president and it cannot be worse.

Of course, each time it requires a slightly deeper analysis whether a given company actually has reasons to overcome the crisis, but even if it does not always succeed, one good shot will more than cover the cut losses from unsuccessful investments.

Andre Kostolany describes such situations vividly: someone throws money into the crowd, and everyone runs away because analysts say that they are worth nothing. Impossible? And yet on the stock market they often even throw shares that "burn", and then it turns out that you can earn millions on them. You just need to stop, take time to reflect, not follow the crowd and just take them.

Simple isn't it?

About the author

Andre Kostolany is of Hungarian origin, but he started his adventure with finance in Paris in the 20s. It was there that he learned to earn money from arbitration as well as speculation. He became famous above all for his huge successes in 1929, because during the Great Depression and just before it, he made short positions that allowed him to make a fortune. When World War II began, he moved to New York, where he was in charge of an investment firm. He did not return to Europe until the 50s. He quickly realized that good money could be earned on the economic reconstruction of Germany, so he had his main office in Munich at that time, taking full advantage of the local economic boom that lasted many years after the end of the war. It is estimated that he spent over 70 years of his long life on stock exchanges. He died at the age of 93.

Strategic partner

The release partner is an international Forex / CFD broker - TICKMILL.

Where to buy

The book is available in Maklerska.pl bookstore at the price of 79 PLN.

We have a discount of all for our club members -5% to buy this book. Soon, a review of the book and a competition will appear in our website, in which you'll be able to win two copies.