Category Archives: Behavioral Finance

Record Low Stock Market Pessimism

One of the more striking features of the stock market is the decreasing pessimism among investors. After the dot-com bust in 2001, we sketched out an algorithm to analyze daily stock market data all the way back to 1928. This … Continue reading

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Dog takes the pill but Cat takes the cake

I’m not immune from behavioral biases. Really, no one is. There’s no cure, either; the best you can hope for is to #1 understand how behavioral quirks effect us, #2 recognize them when they show up and #3 don’t let our biases … Continue reading

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What Investors Really Want

Jonathan here. “What led you to write this book,” I asked Meir Statman, Glenn Klimek Professor of Finance at the Leavey School of Business, Santa Clara University and Visiting Professor at Tilburg University in the Netherlands, referring to his gem of … Continue reading

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Behavioral Finance: Reframing

Justin here. I, like most people, would prefer to pay less taxes. But like anything that hurts, a little “reframing” goes along way. Even though going to the dentist to get a filling hurts (both wallet and tooth,) one can … Continue reading

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Risk Appetite Hits Highest Level in Over Three Years

Warren Buffett said “Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics is equally unpredictable, both as to duration and degree. Therefore we never try to anticipate … Continue reading

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Will the Dow set a new low in 2009?

Call me old fashioned, but I think there are safer and surer ways to get paid while waiting than to own a contract, valued at approximately 79 cents on 2/3/2009, betting that the Dow will set a low that is lower than … Continue reading

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Sign of the times

Jonathan here. This week the recession hit home. It’s official. We know this because the copper lights on our company sign were wrenched off their mounting posts this weekend. I guess when the price for recycled copper cratered from over $4 … Continue reading

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The House is Falling

Justin here. When my wife and I moved to Greensboro, we looked at 10 or 15 houses before making an offer on the cheapest one of the lot. After finding out there were two other offers, we paid the asking … Continue reading

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Question: What Are You Doing?

Justin here. American Public Media’s Marketplace has been asking different people that question (“what are you doing?”) since the start of this financial crisis. Today, they asked one of our favorite people: Dan Ariely In this three minute ‘interview’ (listen … Continue reading

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The Doctor is In

Ron Lieber knows value when he sees it.  Not intrinsic value, but examination value.  In his feature article in today’s New York Times, he says good financial advisors have the examination skills of an ace psychologist.  I’ve heard financial advisors called lots of … Continue reading

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