Someone named Robert Skidlesky wrote a book called John Maynard Keynes: 1883-1946: Economist, Philosopher, Statesman. He says that Keynes said "not all future events could be reduced to measurable risk. There was a residue of genuine uncertainty and this made disaster an ever-present possibility, not a once-in-a-lifetime 'shock'. Investment was…
Check this out ....A study done in conjunction with a Harvard neuroscientist - unconscious processes in the most unlikely of places - a complete loss of vision.(Today's New York Times Science Times) Go see the video at the website of Beatrice Gelber The brain is an amazing thing. Happy Merry…
WSJ Weekend: "Fund Fraud Hits Big Names". New York Times Sunday Business: Schiller talks confidence and beliefs and Ben Stein talks fear. Madoff's investors "felt confident" in his long-time consistent returns. Yet every article indicates there were multiple red flags. No investment fees? Not even a 1% management fee when…
Portfolio selection: Let's exhume the buried man! In his milestone paper "Portfolio Selection" published in the Journal of Finance in 1952, Harry Markowitz, the pioneer of "modern finance," recommends to use the Expected return-Variance (E-V) rule, both as a working hypothesis to explain investment behavior and as a guide to…
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…
... 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…
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…
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 NY Times esteemed Op-ed and they leave out the best part - as mentioned in our earlier post today. It is all fine and well to notice that we behave irrationally, it is all fine and well to say that some things are Black Swans... what it is NOT…
The unexamined truism, old wives tale advice ... from a CNBC guest blog ...scroll down the the part where it says this -"2. These are trading markets where the ability to execute without emotion is the key to success." I realize that neuroeconomics is a new field and that the…
