As part of a recent discussion in the Mentor Program we looked at the nature of returns and how they can be distributed in the real world which is very different to how you want them to be distributed in your head. For the conversation I posted the graph below which is a series of…

I found this fascinating and it had me drawing bikes on a blank piece of paper. The central issue is that we actually know less about he world than we think we do.  These errors abound in simple tasks and in our understanding of the way the world works. It is natural therefore that such…

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…

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…

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…