Posts filed under “Cognitive Foibles”

What to Do in a Market Correction

Things to try in a market correction:

• Respond emotionally, giving in to your lizard brain. It does a good job of keeping you alive, so you might as well hand over management of your portfolio to it.

• Rely on your gut instinct to lead you out of trouble. After all, your instincts helped you buy gold at $400 and sell Apple at $700, right?

Deviate from your plan, because really, what’s the point of having a plan if you can’t change it on a whim?

• Aggressively overtrade, because all of those capital gains taxes are helpful in reducing the federal deficit.

• Rely on the pundits’ market calls, because their sole interest is making sure you are comfortable in retirement.

Flail aimlessly, and with any luck, something you do will turn out well.

Hope is good. Hoping that things turn out for the best never did anyone any harm.

Panic is always an option, because that always works out so well for people.

Continues here

 

 

 

Category: Cognitive Foibles, Investing, Markets, Psychology

How Not to Beat the Market

Hat tip Josh Brown   Today’s chart comes to us from Patrick O’Shaughnessy, author of the forthcoming book, “Millennial Money: How Young Investors Can Build a Fortune.” O’Shaughnessy makes the observation that investing is “almost free” and investor behavior tends to matter more than their actual investments. As an example, he cites this chart.  Continues…Read More

Category: Cognitive Foibles, Investing

I Love the 80′s: 1982 Low vs 2009 Low

click for ginormnous chart Source: The Chart Store   “I Love the ’80s” was a BBC television miniseries that examined the world through the lens of 1980s pop culture. (VH1’s riff on the show can be found here). I bring up the ’80s because of a wonderful chart from Ron Griess who runs The Chart…Read More

Category: Cognitive Foibles, Investing, Markets

Last chance to sign up for today’s MTA presentation!

MTA Presentation: Risk, Trading & Neurofinance: “This Is Your Brain On Stocks” Click through for the free registration:   MTA New York Chapter Meeting June 23, 2014 Featuring Barry Ritholtz presented by Bloomberg L.P. The New York Chapter of the MTA invites you to our next chapter meeting on Monday, June 23, 2014. We are…Read More

Category: Cognitive Foibles, Psychology, Trading

Be Wrong Like Ray Dalio

In yesterday’s column, I wrote: If you have an issue with Social Security, then fix it. The regressive taxes to fund retirement benefits top out at about $117,000 in 2014. Why not simply raise that to $250,000 next year and $500,000 during the next 20 years. Congratulations, you just made Social Security solvent for the…Read More

Category: Cognitive Foibles, Corporate Management, Hedge Funds, Psychology

NorCal FPA: This Is Your Brain On Stocks

This is the presentation I gave this week out in San Francisco:

Category: Cognitive Foibles, Investing, Psychology, Think Tank

What You’re Hearing Is Noise

In a new project at Bloomberg I will interview some of Wall Street’s most influential thinkers. I’ll share more details with readers when we get closer to a launch date, but several consistent themes have become clear to me, even at this early stage. The one I want to discuss this morning is the concept…Read More

Category: Apprenticed Investor, Cognitive Foibles, Financial Press, Investing

Once Again, The Narrative Fails

Late last year, we had a wholesaler from a major ETF firm in our office. At the time, the chatter was all about the upcoming Alibaba IPO. It was going to be (in his words) “huge, disruptive, incredibly powerful – and you cannot get any.” Never mind that IPO returns are on average mediocre or…Read More

Category: Cognitive Foibles, Investing, IPOs

Radiolab: Memory and Forgetting

This hour of Radiolab, a look behind the curtain of how memories are made…and forgotten.

Remembering is an unstable and profoundly unreliable process–it’s easy come, easy go as we learn how true memories can be obliterated, and false ones added. And Oliver Sacks joins us to tell the story of an amnesiac whose love for his wife and music transcend his 7-second memory

SOURCE: WNYC

Category: Cognitive Foibles, Psychology, Science, Video

Greg Harmon: We Are All Useless Morons that Suck

Let’s face it you suck at investing. Your adviser sucks at investing too. If you had picked the best stock to buy every day you could have turned $1000 into $264 billion by mid December. That is a 26.4 billion percent return. Did you even get a 1 billion percent return? How about 1 million…Read More

Category: Cognitive Foibles, Psychology, Think Tank, Trading