Your Mind and Your Money

By Barry Ritholtz - March 14th, 2010, 12:30PM

There is an interesting PBS series titled “Your Mind and Your Money,” with an extensive section on Behavioral Finance.

There is a full run of video discussions with the likes of Daniel Kahneman of Princeton (Prospect Theory), Richard Thaler of University of Chicago (practical implications of behavioral finance) and Robert Shiller of Yale (How psychology impacts investor behavior).

Edutainment video for a rainy Sunday afternoon . . .

click for video menu page

PERMALINK
Category: Psychology/Sentiment, Television.

Comments

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “Your Mind and Your Money”

Arequipa01 Says:
March 14th, 2010 at 12:54 pm
Thank you for the link.

A few thoughts:

In the interview with Thaler, the journalist asks him what is the ‘key reason’ people make the wrong investment decisions. His answers are interesting, but I guess I have a couple of beefs.

1. People take disadvantageous market positions due to distraction. We often (almost always) use the wrong referent reality to interpret the present moment(s) in the market.
2. Distraction is often manufactured. (They call it Public Relations because ‘Phucking You in Public’ would be counterproductive).
3. Due to lack of information (real, concrete, detailed knowledge- this costs money and even then, hoo boy).
4. Market prices and economic ‘realities’ interact in ways that most of us do not recognize.
5. Retail investors operate at a massive disadvantage to market-making participants and would be better off investing locally (glocalization).

This reduction of our decisions and their consequences to our collective biological ‘limitations’ should be coupled with a discussion of the various strategies that can be employed to avoid the pitfalls (just like we hominids do with every thing else).
keithpiccirillo Says:
March 14th, 2010 at 2:22 pm
“The emotional tail wags the rational dog”…. over confidence and over trading seems to be a suit men wear that ends up getting sent to the cleaners….women trade less, and are wired much differently.
Mike in Nola Says:
March 14th, 2010 at 8:36 pm
What rain? We’ve had beautiful early Spring weather down here in Houston :)