MARKET MIND GAMES, A Radical Psychology of Risk

Risk ain’t what it used to be – if fact, most of the time it isn’t even risk at all. Instead it is something called Knightian Uncertainty – or the fundamental inability of humans to know for sure what will happen tomorrow. Yet we have to make decisions about tomorrow all the time.

Reams have been […]

By |January 8th, 2012|Perception, ReThinking|0 Comments

Having Forgotten to Doubt, “Modern Finance” drove us Insane

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 “investment” – as distinguished from speculative […]

By |December 8th, 2008|French PhD Chick, Markets|2 Comments

Risky, Uncertain or Ambiguous?

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 = known probabilities […]

By |November 24th, 2008|Emotions & Decisions, Learning Psych Cap, Markets|0 Comments

David Brook’s “Behavioral Revolution”

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 fine and well is to ignore […]

By |October 29th, 2008|Definitions, Emotions & Decisions|0 Comments