If you ask a neuroeconomist about the markets, they will say markets are NOT risky. In fact, they are 100% certain that risk is not the issue in markets. What you say? Isn’t that the whole point – judging risk? Well yes… but, well actually no. Let me explain. To a neuroecon type risk = [...]
Archive: November, 2008
On
11.18.08 • In
Emotions & Decisions • by
DKS •
Sunday’s NYTimes included an article about the study done by John Coates at Cambridge – you know – the one that talked about hormones – particularly testosterone fueling male traders to take more risks and cortisol to show up when traders are losing money. I don’t know about the experimental design as I am being [...]
Last night I turned on the 7pm CNBC show and listened to not one but two money managers make the case that October 10th was the low. It would make me wonder if they have ever heard of momentum but in reality, what they are doing is finding confirming data in positions they already have. [...]
Treasury Acts Ridiculously _____________________? …. fill in the blank. If the markets are based on confidence (or lack thereof) then where are we in the spectrum between panic and overconfidence? We are certainly on the left-end of this tug of rope. The panicked selling seems to be gone but now we are in a market [...]
well they asked…. and yes we are in a bear market i.e. sell the rallies and buy the dips. I hated to sound like a downer but hey, Roubini I am not (although so far…. ) MONEY MATTERS on ABC NEWS NOW Having said that, 900 in the S&P futures held like a rock. Talking [...]
well they asked…. and yes we are in a bear market i.e. sell the rallies and buy the dips. I hated to sound like a downer but hey, Roubini I am not (although so far…. ) MONEY MATTERS on ABC NEWS NOW Having said that, 900 in the S&P futures held like a rock. Talking [...]
… most of which are human. I saw this in the NY Times… and here is says from the WSJ but in any event, the word is out. Math wizzes are human. The human brain does funny things with biases and predispositions that causes it to not see the data clearly. In fact, one solution [...]
On The Ubiquitous Missing Information in Markets: What Neuroeconomics Has to Say ‘Ambiguity’ is the Hallmark of Trading and Investing The situation of taking a position when the odds are uncertain because of missing information is referred to by economists as “ambiguous”. F Knight in his book Risk, Uncertainty, and Profit was the first to [...]
On
11.02.08 • In
Learning Psych Cap • by
DKS •
Robert Shiller writes in the New York Times about the role of group-think during the upward phase of our blown-up housing bubble. He recounts the polite discounting of his warnings in Irrational Exuberance (see all of Shiller’s books) and says “speculative bubbles are caused by contagious excitement.” He segues to the remaining gap between economics [...]
Robert Shiller writes in the New York Times about the role of group-think during the upward phase of our blown-up housing bubble. He recounts the polite discounting of his warnings in Irrational Exuberance (see all of Shiller’s books) and says “speculative bubbles are caused by contagious excitement.” He segues to the remaining gap between economics [...]