Book review: "Investing and the irrational mind: Rethink risk, outwit optimism and seize opportunities other miss"

Throughout economic history, one of the most of popular questions under discussion among economists and finance theorists alike has been whether the practice of successful financial investment can be defined as an art or a science.

A science, in order to be applied, requires a sound framework of principles to serve as its foundation, upon which all other related concepts and operations will be built.

Alternative thinking, otherwise called “out of the box thinking”, may not be officially accepted as legitimate, unless it has been proved logically and by applying recognized scientific methods.

This procedure is just a tiny percentage of the procedure followed by artists. On the grounds that investing is an art, subjectivity would play the biggest role during the financial decision-making process.

In this book, Robert Koppel puts in use his personal experience and conclusions, which resulted from his career, serving for many years as a major financier at the Chicago Mercantile Exchange and elsewhere.

Furthermore, he attempts to show that although mathematical and numerical models can be highly idealistic and represent objective descriptions of reality, they cannot remain unaffected from human subjectivity. This fact becomes more apparent during their application in practice.

This conclusion serves as the basis for the development of theoretical foundations for new scientific disciplines, such as Behavioral Economics and Neuroeconomics, and makes interdisciplinary knowledge more necessary than ever.