Know This First: Risk Perception Is Always Irrational.
Our perceptions, of risk or anything else, are products of cognitive processes that operate outside our conscious control — running facts through the filters of our feelings and producing subjective judgments that disregard the evidence. The behavioral scientists Melissa Finucane and Paul Slovic call this the Affect Heuristic; it gives rise to what I call…
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Emotions Are Not A Trading System
At our recent gathering in Perth we looked at quite a bit of the trader psychology that occurs around certain moves. LB has an exercise where she puts up a given chart with the sort of generic responses that traders generate at each phase of the move. The audience is then asked to critique what…
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Thought Of The Day
I saw this pop up today. The tale of Ronald Wayne is somewhat legendary. He was one of Apples original founders but sold his original stake for $800 and later on accepted an additional $1500 to forfeit any future claims against the company. As the billboard states his stake today would be valued at around…
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Metaphors
Trading is an arena that is rife with metaphors. Every so often some taking head or idiot broker will trot out Rothchilds remark about not buying until there is blood in the streets. Or you will be told to buy Sun Tze Art of War. If they are slightly better educated (doubtful) they might mention…
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Adventure
Adventure is merely bad planning – Roald Amundsen I have talked about Amundsen before and focussed in particular about how his success as an explorer was a function of his obsessive planning. What strikes me about people who are successful in very difficult fields is that they all share similar traits, attributes or philosophies. Much the…
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Economists
I has completely forgotten about this. Click on the pic to be taken to a great little time waster.
