Posts filed under “Psychology”

Why Are Risky Assets Wobbly?

From Torsten Sløk of Deutsche Bank:


click for full size image
Source: Deutsche Bank Securities

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Category: Federal Reserve, Fixed Income/Interest Rates, Investing, Psychology

Uneven Recovery, Noise & Ignorance: Why People Missed the Recovery

There has been a steady drumbeat of dissatisfaction about the post-credit-crisis recovery. No matter how much the economy improves, a good number of people insist it hasn’t. Now, in the midst of the political silly season, it has intensified as candidates pander to voters. This is a subject near and dear to me (see this, this, this, this, this, andthis),…Read More

Category: Cognitive Foibles, Currency, Economy, Inflation, Politics, Psychology, Really, really bad calls

The Long (Behavioral) History of Long Yields

I love this long term chart via Ben Carlson looking at the various behavioral issues that arise around every major Treasury peak over the past few centuries.   click for ginormous chart Source: A Wealth of Common Sense  

Category: Cognitive Foibles, Fixed Income/Interest Rates, Psychology, Really, really bad calls

Crashes & Terrorists & Sharks – Oh, My!

I created a new presentation on Why Traders & Investors Misunderstand Risk and What They Can Do About It. I gave it a test run this weekend at the conference T3 Live and Todd Harrison put together which was a great event. If I can say so myself, it was very well received. Its tough…Read More

Category: Cognitive Foibles, Investing, Psychology, Think Tank

Ain’t No Such Thing As A Free Lunch . . .

Deep down inside, you already know this: There ain’t no such thing as a free lunch, financially or otherwise. Yes, of course, you understand that. You have heard it over and over your whole life. If you want anything – especially something lots of other people want, too, like money – there is a simple…Read More

Category: Investing, Psychology, Really, really bad calls

Always Consider Sources & Disclosures

This morning’s column began as a discussion about biases — how you need to know what may be influencing the sources you read; however, it has morphed into a look at transparency and conflicts of interest. What prompted this was a post defending the payday lending industry that appeared on Liberty Street Economics, the blog…Read More

Category: Cognitive Foibles, Federal Reserve, Psychology, Really, really bad calls

Bubbles and Fools

Category: Psychology, Think Tank

No Free Lunch

    My Sunday Washington Post Business Section column is out. This morning, we look at the very human habit of seeking something for nothing. Its a suckers play that leaves investors vulnerable to sharpies and clever salesmen. There are numerous examples where pursuing a free lunch (not unlike Alpha) leads to losses. Here’s an excerpt from…Read More

Category: Asset Allocation, Investing, Psychology, Really, really bad calls

America’s Top Fears 2015

Click for the full breakdown. Source: Chapman University

Category: Psychology

Don’t Suffer From Denominator Blindness

Today I am going to indulge in a pet peeve of mine, one that I hope you will find helpful. It’s about a bias called denominator blindness and it is the scourge of anyone who has even the most rudimentary understanding of mathematics in the real world. A quick definition: Denominator blindness is the failure…Read More

Category: Bad Math, Cognitive Foibles, Psychology