Dont Worry It Will Bounce
One of these things I have been hearing a lot lately during the current drawdown in equity prices is that you don’t want to sell because you will miss the inevitable bounce. Consider the chart of MSFT below – A close look tells you it took 16 years for MSFT to move beyond its 2000…
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The Halo Effect: Bad Forecasts by Billionaires
This week, the real estate mogul and billionaire Sam Zell said, “There is a high probability that we are looking at a recession in the next 12 months.” The culprit, he told “Bloomberg Go,” was the strong dollar and slowing global trade, the beginnings of layoffs at multinational companies and a general lack of demand. The bears of…
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Seven Varieties of Stupidity
“There are so many kinds of stupidity, and cleverness is one of the worst.” Thomas Mann. Many words have been expended on the nature of intelligence, while the topic of stupidity is comparatively neglected – even though it is all around us, screwing us up. That’s probably because we assume stupidity is just a lack…
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Why Negativity Dominates Your Daily Thoughts
We’ve all been there, mired in the throes of pessimism when life just doesn’t seem to be going our way. For the lucky ones, this entirely natural, though disconcerting, feeling ebbs and flows, ultimately dissolving into a more balanced, healthier state of mind. For hapless others, though, the extreme negative thoughts and ideation can overwhelm—even…
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What Is The Number One Mistake Traders Make
IG Markets community blog recently printed an article with the title What Is The Number One Mistake Traders Make? In this piece, the author looked at the impact of Prospect Theory on traders’ decision making and it repeats what I think is the mistake used when applying this to trading. At its core Prospect Theory…
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Noisy Decisions
Nobel memorial prize winner Daniel Kahneman is one of the world’s most famous psychologists, known particularly for his work identifying the role of cognitive bias in everyday decision making. In this edition of More or Less he talks to Tim Harford about his latest book, Noise – A Flaw in Human Judgement, in which he…
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