risk psychology

Beyond Behavioral Finance to the Brains Making the Decisions

The market meltdowns of last few years spawned an interest in the research and theoretical field of Behavioral Finance that simply didn’t exist before. Books like THINK TWICE, Harnessing the Power of Counter-Intuition garner great attention and great crowds for Michael Mauboussin the author. Calls to our office for talks, interviews or articles on “Irrationality” […]

By |June 25th, 2010|Perception, ReThinking|1 Comment

My Journey to Self-awareness, by JON

I knew I needed emotional help the day I became so angry that I punched my bedroom door, stomped down the stairs, and kicked over a living room end table—shocking my wife and two boys, and, most of all, myself. I’ve always been known as the “laid back, non-emotional German from Minnesota.” I was […]

By |June 7th, 2010|Learning Psych Cap, Trading Education, Worth Reading|1 Comment

Don’t want to be an alarmist … but

As long as we do not know what caused the flash crash, why isn’t sabotage on the table? Or, is it on the table and we don’t know it.

I mean are we looking at the obvious and overlooking what we don’t want to see? Why would P&G, MMM and Accenture have relatively more erratic […]

By |May 11th, 2010|"Flash crash"|1 Comment

Market Personality Change

… well I feel rather obligated to go through with my bullish ITM put spread but honestly, since I didn’t manage to get it on, I also feel a personality change in the market. For me, I sense these things through speed and rhythm and the s/r of yesterday and this morning, is striking my […]

By |May 5th, 2010|Markets, Membership in the Options Counter-Culture|2 Comments

How We Decide

Between the avalanche of neuroimages, the financial crisis and its aftermath and Jonah Lehrer’s book entitled How We Decide, interest in figuring out the answer has probably never been so attenuated.

Allow me to submit a new model that I will believe will come to be the way we understand our own decision making come 10 […]

By |February 26th, 2010|ReThinking|1 Comment

Risky Business, It Ain’t What You Think

We like to believe we make well-analyzed, rational decisions. We consciously evaluate data, massage statistics and assign weights to the pros and cons of what we think are potential outcomes. Yet time and time again, we realize in hindsight that we didn’t make a rational decision – buying that stock near the top, investing in […]

By |February 6th, 2010|ReThinking|1 Comment

Exploring the Nature of Trader Intuition: Research from Cal-Tech

In short, ..."tests show that Theory of Mind (ToM), rather than mathematical, abilities are better predictors of success in forecasting stock markets".

By |January 9th, 2010|Definitions, Pure Science, Risk Decisions|0 Comments

The Rose Bowl & Risk Decisions

60 seconds in and Ohio State is plowing down the field. As I write this sentence, they dropped the ball in the end zone. … Try it again – 3 and 10 and in!! Now the question relevant to trading and risk psychology is … 15 minutes ago did they KNOW that was how it […]

By |January 1st, 2010|Learning Psych Cap, Markets, Risk Decisions|0 Comments

Risky Business

Here’s an ironic twist – research shows it is easier for the human mind to comprehend and leverage probabilities and logic IF the question is posed in terms of people versus cards, numbers or objects. Yet research also shows that we continue to build arsenals of data in the form of numbers and that in […]

By |December 28th, 2009|Risk Decisions|0 Comments

What I Learned/Re-Learned @ Harvard

A few weeks ago I trekked to Cambridge for Harvard’s annual Investment Decisions and Behavioral Finance conference. Excited to hear a speaker list that included renowned economist Richard Zeckhauser, MIT’s Andrew Lo and Michael Mauboussin who recently authored THINK TWICE, The Power of Counter-Intuition, I admittedly however didn’t know quite what to expect.

Reflecting now – […]

By |November 22nd, 2009|Emotion Analytics, Learning Psych Cap, Risk Decisions|0 Comments