Posts filed under “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 on the usual suspects as a source of insight. This is especially the case when the usual suspects have been so wrong for so long about these issues.

Ask yourself the following questions:

• When has the mainstream media made a timely warning about an imminent recession?

• Has the punditocracy ever correctly identified a bubble in real time?

• When have the public’s perspectives on market valuation ever been right?

Look at mutual fund flows if you want to see how wrong individuals are; check out various valuation methods to see how much bias and data cherry-picking goes on.

Continues here

 

 

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

The Spending Habits of the 0.01%

Attention peasants: The Greubel Forsey GMT at $549,000 Source: Greubel Forsey I have been hearing a lot about the spending habits of the 0.01 percent lately. Perhaps, a little bit too much. Don’t worry, this isn’t going to be a class-warfare rant or a treatise on living the simpler, less materialistic life. Rather, it is…Read More

Category: Consumer Spending, Psychology, Really, really bad calls

MTA Presentation: Risk, Trading & Neurofinance

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 honored to have Barry Ritholtz, founder and chief investment officer of Ritholtz…Read More

Category: Markets, Psychology

PSYOPS – Wars Are Fought On and Off the Battlefield

Source: Online-Psychology-Degree.com h/t Washington’s Blog

Category: Digital Media, Psychology, War/Defense