Posts filed under “Psychology”

Masters in Business: Rob Arnott of Research Affiliates

Rob Arnott turned the world of passive index investing upside down. Best known for creating “smart beta,” Arnott creates models weighted b y four factors: Sales, profits, book value and dividends. Market cap is not relevant to him.

Funds running Arnott’s models manage about $200 billion dollars in smart-beta strategies. Assets have increased by 59 percent last year.

You can stream the full interview — radio + podcast — with Arnott here; we should have the MP3 of the interview up later this week.

This is the second episode in our new series “Masters in Business” that I’ve created with Bloomberg Radio and Bloomberg View. Our goal is to turn the usual Wall Street interview show upside down by ignoring short-term market concerns and focusing instead on how some of the modern masters in business and finance developed their personal philosophies and strategies.

You can listen to “Masters in Business” on Bloomberg AM on weekends and nationally on Sirius XM channel 119. Listen to last week’s interview with Jeff Gundlach on SoundCloud, and check back next week for a chat with Arthur Levitt.

 

 You should listen to this despite that terrible picture . . .

Category: Financial Press, Index/ETFs, Investing, Psychology

Nick Epley: Why You Should Talk to Strangers

Nicholas Epley is the John T. Keller Professor of Behavioral Science at the University of Chicago Booth School of Business. He was named a “professor to watch” by the Financial Times, is the winner of the 2008 Theoretical Innovation Prize from the Society for Personality and Social Psychology, and was awarded the 2011 Distinguished Scientific…Read More

Category: Psychology, Weekend

How to Change a Habit

Click for the ginormous version. Source: Charles Duhigg

Category: Digital Media, Psychology

It’s a Bubble! It’s a Recession! It’s a Crash!

When was the last time anyone got good investing advice from the front page of a newspaper or magazine or from a television pundit? That is the question I have been pondering during this market cycle. Whether it is the price of equities or the state of the economy, I have grave reservations about relying…Read More

Category: Cognitive Foibles, Financial Press, Markets, Psychology, UnGuru

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…Read More

Category: Cognitive Foibles, Investing, Markets, Psychology

Personality Research Says Change in Major Traits Occurs Naturally

Source: WSJ

Category: Digital Media, Psychology

Single Variable Market Analysis is for Losers

If you work in finance, you will invariably come across an example of single-variable analysis. Almost daily, we see terrible examples of this sort of analytic error, rife with logical weakness, yet offered with the highest degree of certainty. The way this works is as follows: Some ominous data point will be shown, along with…Read More

Category: Analysts, Data Analysis, Investing, Philosophy, Psychology, Quantitative, Really, really bad calls

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

Frustrating the Majority

Jeff Saut dug into the archives for this one on Monday: “Money managers are unhappy because 70% of them are lagging the S&P 500 and see the end of another quarter approaching. Economists are unhappy because they do not know what to believe: this month’s forecast of a strong economy or last month’s forecast of…Read More

Category: Investing, Markets, Psychology

Market Sentiment Screams Crash! Or Buy! Or Something…

Today, let us briefly address sentiment – what it is, what it means and how to use it in your everyday trading. There is no piece of market data that is more misused, misunderstood or misapplied than sentiment. The spark for today’s diatribe was a State Street study of cash allocations in investment portfolios. The…Read More

Category: Psychology, Sentiment, Trading