…a higher Price/Book ratio. This can have the effect of making a company look less attractive from a valuation standpoint, even though it is engaging in behavior that is beneficial…
Search Results for: psychology OR behavior
Ritholtz on Why We're Bad at Forecasting
…forecasting their own behavior, what you are getting is a read of their emotional state.” Random and unforeseeable events introduce more error; Bad forecasts, writes Ritholtz, “are quickly forgotten, while…
The Biggest Failure of the Investment Management Industry
…efforts being made in the area of investor behavior and psychology, but the “behavior gap” has been shown to adversely affect returns significantly more than fees, so there is no…
Can Behavioral Economics Be a Channel to Profits?
…to psychological phenomena to try and explain it.” It cites examples of funds that attempt to “capitalize on the behavioral biases of investors,” such as those funds overseen by behavioral…
Wording in Press Affects Investor Expectations
A recent issue of the Journal of Economic Behavior & Organization offers insights as to how wording in the financial press affects investor expectations. Researchers conducted a study asking participants…
Four Thaler-Inspired Takeaways Investors Can Learn From
…paragraph could just as easily lead into a stock market chronicle outlining the vagaries of business cycles, stock price volatility and investor behavior. Which may explain why, after last week’s…
Podcasts of the Week: Pysh, Arnott & Thaler
…they should. The problem is that never happens in the real world. Richard Thaler is a leading voice in Behavioral Economics, which looks at how people actually behave and how…
Lessons From Over a Decade of Managing Money Using Quant Strategies
…and the introduction of investor behavior into the equation can make things even more complicated. While it would be impossible to document all the knowledge I’ve gathered in over a…
Housel's Fundamental Investing Skills
…vs. psychology is necessary.” Arguing that investing involves both analytics and psychology, Housel says, “The trick is knowing when which skill is necessary, and how one affects the other.” …
Three Slogans that Don't Work for Money Managers, But Should
…is Terrible Fees are a huge focus of the financial press these days, and rightly so, but behavioral biases play a much larger role in reducing investor returns over time….