Posts that are related to behavioral biases and how they impact investment decision making
Over the last several years, I have explored the impact of behavioral and structural biases in markets, as well as how they impact investment decision making. Recently I have been reading about the physiological changes that occur in our body Read More …
I recently started following Stephen Duneir’s “Seeds of Thought”, and have developed a healthy respect for Steve’s insights around applying cognitive science toward investment and business decisions. In a recent article, Steve wrote about technology and investing, and compared the use of Read More …
This post deviates from what I normally write, but I think it will be worth it. Improving yourself comes from an appreciation and understanding of different points of view, and influences from people and disciplines that are outside your immediate Read More …
Stability, not low rates is likely to drive spending Uncertainty about the future leads to conservative spending lower employee benefits and higher future expenses Unreliable investment returns Central banks are doing what they can, but spending is out of their hands, and Read More …
Using asset returns to discount liabilities has important behavioral implications Choice of a discount rate should not impact investment strategy Pensions and endowments might create issues for themselves by relying on high expected returns How do you think Read More …
For quite a while now, I have been following the excellent blog Farnam Street, where Shane Parrish delves deeper into the benefits of slowing down. After working on a trading floor, multi-tasking, “working” long hours, and getting overwhelmed balancing the Read More …
In its Third Quarter 2014 publication of Alternative Thinking, AQR discusses how our behavioral biases as investors can affect potential returns. The entire article is an excellent read and focuses on return chasing, under-diversification, and comfort-seeking while selecting investments. Two particular biases Read More …
Behavioral bias exists – using financial theory to inform, data to validate and learn, and technology and design to implement, can help us make the best out of behavioral biases Don’t be fooled by randomness Human beings are predictability irrational Understand Read More …