Well the wave has finally hit… it seems everyone on or connected to a Wall Street event is interested in hearing more about behavioral finance. PBS’ Nightly Business Report is doing a year-long special, private wealth managers are calling me to speak almost monthly, the largest “alternative investment” conference in the world called…
Yet underlying much of what I hear is still the SAME assumption – control your emotions and in turn control your thinking. But ironically NOTHING could be further from the truth. Know your emotions – yes. Control – NO. Plus, why doesn’t it occur to anyone that logically you only have to control your actions… and emotions and actions are actually two different things.
It is actually a case of “focus bias” or the tendency to confirm what you already think that even though many many scholars and practitioners are interested now in investing behavior, their discussions return right to the same underlying and outdated theories.
If you don’t have your emotional neural networks working, you can’t decide what to wear in the morning and chances are, you may not even recognize clothes as clothes! The latest research shows we need the contextual information – which we feel – for our visual cortices to work.
I am thrilled in the interest … but now let’s take it a step further and get down to business figuring out how to understand and leverage the difference between Emotional Intelligence, blink and The Black Swan!