Showing posts with label behavioral finance. Show all posts
Showing posts with label behavioral finance. Show all posts
Why You Shouldn’t Trust Internet Comments | Science/AAAS | News
Why You Shouldn’t Trust Internet Comments | Science/AAAS | News:
In many areas the Wisdom of the crowds rules, but what is the crowd isn't as smart as we think?
From Reddit:
"The “wisdom of crowds” has become a mantra of the Internet age. Need to choose a new vacuum cleaner? Check out the reviews on Amazon. Is that restaurant any good? See what Yelp has to say. But a new study suggests
Why do I care?
I posted this on Facebook and then decided it was enough finance related to post here as well.
Yes,
it is their money (donated by Phil Knight). Yes, they can spend their
money in anyway they see fit. No, they are not the only ones to go
"overboard". I concede my "overboard" tends to be
significantly less than other people's "just right". And I even bet
that the fancy "football
Great lessons from 25IQ (and Daniel Kahneman) | 25iq
Great stuff!
Great stuff! A Dozen Things I’ve Learned About Investing from Daniel Kahneman | 25iq:
A Dozen Things I’ve Learned About Investing from Daniel Kahneman
1. “Many individual investors lose consistently by trading, an achievement that a dart-throwing chimp could not match.” Leonard the Wonder Monkey will beat a muppet in an investing contest. Not only will muppets
Brain sets prices with emotional value
Brain sets prices with emotional value:
Not super surprised by this one:
"...after a series of experiments in which subjects were asked to modify how they felt about something either positively or negatively, the Duke group is arguing that emotional and economic calculations are more closely related than brain scientists had realized. The study appears July 3 in the Journal of Neuroscience."
Forget self-denial: Key to richer, healthier life is a good imagination - Red Tape
Forget self-denial: Key to richer, healthier life is a good imagination - Red Tape:
The "He" is Joesph Kable from Penn.
"Recently, his research took an inspirational turn. He found that subjects whose brains show added activity when imagining the future also make better decisions about money. Kable suspects that consumers who can really, viscerally imagine how great that new car will smell
Mercury News interview: Meir Statman, Santa Clara University professor of finance - San Jose Mercury News
Finance (Photo credit: Tax Credits)
Mercury News interview: Meir Statman, Santa Clara University professor of finance - San Jose Mercury News:
"Santa Clara University finance professor Meir Statman believes that American employers should be forced to set up retirement plans for their workers for one simple reason: "People are stupid," he said.
Statman, an expert in behavioral finance,
aiCIO - A Neurology Lesson for Money Managers
Chief Investment Officer-CIO - A Neurology Lesson for Money Managers:
Nice short list (8 points) on how neuroeconomics effects money managers from Paul Zak.
"The crossover applications between neurology and economics don’t end there. In fact, an entire discipline has sprung up in their midst: neuroeconomics. Two leaders in this field have teamed up and crafted a list of the eight crucial
Are women better investors?
Female hedge fund managers outperformed male managers in 2012
"Meredith Jones, director at Rothstein Kass and the author of the
report, believes there are two primary factors at play in the
exceptional performance of women in alternative investments.
Women tend to be more risk-averse than men. “Women may be better
equipped to position a portfolio to handle market volatility which we
Take the money: Why we make better financial decisions for strangers than family
Take the money: Why we make better financial decisions for strangers than family
This
one should not really surprise anyone and is essentially the logic
behind my recent test question of "what is the role of a financial
planner in the face of investors prone to behavioral biases".
"They
found participants were more likely to select a smaller immediate
reward than delay for a larger
NBA Players Forced to Save Toward Retirement for First Time - Bloomberg
English: Chicago Bulls Scottie Pippen 1995 (Photo credit: Wikipedia)
NBA Players Forced to Save Toward Retirement for First Time - Bloomberg:
To combat the near epidemic problems of professional athletes going broke after failing to safe for tehir retirement, the new NBA agreement includes a forced saving plan:
"Beginning next season, players also will surrender 5 percent to 10 percent of
Futurity.org – In tool trade, chimps reveal a quirky bias
Futurity.org – In tool trade, chimps reveal a quirky bias:
The endowment effect essentially says that you value something you own more than it is worth from an outside perspective. Now it appears that chimps suffer the same bias:
"Drawing on prior theoretical work by Jones on the evolution of seemingly irrational behaviors, Brosnan and Jones found consistency between chimpanzees and humans
Why Do Individuals Exhibit Investment Biases? by Henrik Cronqvist, Stephan Siegel :: SSRN
Why Do Individuals Exhibit Investment Biases? by Henrik Cronqvist, Stephan Siegel :: SSRN
Abstract:
"We find that a long list of investment biases, e.g., the reluctance to realize losses, performance chasing, and the home bias, are "human," in the sense that we are born with them. Genetic factors explain up to 50% of the variation in these biases across individuals. We find no
Abstract:
"We find that a long list of investment biases, e.g., the reluctance to realize losses, performance chasing, and the home bias, are "human," in the sense that we are born with them. Genetic factors explain up to 50% of the variation in these biases across individuals. We find no
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