Category Archives: Psychology

Or would they rather just make money by themselves? We used to take banks for granted as places to store our money, and sometimes we borrowed money from them as well.  But recently it has looked like banks were getting … Read More

I don’t hate all models. I’m quite keen on the tall, leggy ones.  It’s the mathematical ones that come trailing clouds of false precision that are the subject of my ire.  Yet the world is a complicated place, too complex … Read More

The paradox of investing is that the best investors have a system, but that this system, mindlessly applied, exposes them to the very risks that they’re trying to avoid.  Markets go through phases, and systems and concepts developed during one … Read More

Every so often in an investor’s lifetime the markets will throw us a completely unexpected curve ball.  Markets will fall off a cliff or soar off into the stratosphere. Whether we like it or not, if we invest in the … Read More

The key phrase here is situational awareness.  It’s about having the big picture as well as the focused analysis.  The world, even that part of it tracked by stockmarkets, is a complex adaptive system made up of many working parts.  … Read More

Simplifying things is what we do, habitually.  The world is too complex, too multi-faceted for us to do anything else.  We develop a specific, individual mindset which we use to frame the world we operate in.  Sometimes this is a … Read More

Tim Richards is away, analysing the Eurozone crisis from the lofty vantage point of a Alpine bar. In the meantime this is a series of mini-posts on how to avoid the worst faults of the behaviorally compromised investor based around the … Read More

Dead or Alive, It’s all the Same Amos Tversky’s and Daniel Kahneman’s 1981 paper on The Framing of Decisions and the Psychology of Choice demonstrated that people are risk averse in situations involving potential gains and risk takers in situations involving … Read More

Money Maketh Woman The research showing that women are better investors than men has been around for a while.  This is linked to the evidence that women are more risk averse than men – they tend to take less chances … Read More

A vast gap has grown up between the financial industry and the rest of us.  The evidence is piling up – and it’s not just a matter of wealth. Too Big to Fail?  Too Big to Care?  Or Are We … Read More