All about your brain & obtaining real-world behavioral finance knowledge! Listeners have access to original and engaging discussion of behavioral finance and cognitive bias.
Dr. Daniel Krawczyk & George Baxter, JD, CFA
GameStop shops mainly sold physical video games. They would also stock many resale items. The physical locations capitalized on the same type of business that comic book shops often had by selling collectibles as well. Many projected that Game Stop had a very limited future and had been cut out of the supply chain as many electronic games are simply sold online in recent years. Hedge funds had high interest in shorting GameStop at the end of 2020. In January 2021 a long position idea existed with the idea that a pivot to in-person gaming meetings could be a way forward. Michael Burry was featured in the Big Short and he had advocated for a potential bright future for GameStop lending credibility to the value position. Melvin Capital was known for this, and was pretty aggressive in advocating for the short position. “Deep F…ing Value” (aka “Roaring Kitty”) entered the scene with the WallStreetBets crowd and advocated for buying GameStop and driving up the price. Around GameStop there was herd mentality forming and a desire to squeeze the hedge funds. It was equivalent to an ‘occupy Wall Street movement’. Everyone online had to going to buy Game Stop stock and not sell it for the short squeeze to work. These are known as “diamond hands”, which also happens with cryptocurrency. It became the ‘Prisoners Dillema’, a trust game, where everyone has to stay the course and not sell. A religious fervor built up as online investors from Robinhood wished to take down hedge funds that were seen as greedy. We discuss the typical scenario around short selling and short squeezes. There is some value for markets to have short sellers as they act as a shock absorber. Contrarian short sellers are naturally unpopular due to the historical interest in companies continuing to succeed. A set of factors aligned in 2021: the bull case for the stock, an online sentiment to stick it to short sellers, and the natural appeal of using Robinhood to become wealthy from the comfort of one’s own home. Meteoric rises in the price continued until it had reached three hundred dollars per share. This scenario may serve as a sign that retain online investors are coming online. It’s a case where people with limited investing skills scored a victory in this risky scenario. Some people may have participated simply to experience the thrill of being part of this movement as entertainment for some people. It is not healthy for society overall to have people treating the stock market like a casino. It had a sports betting feel to it. AMC theaters was on the way to bankruptcy, but took advantage of a price rise to raise capital to help their business. GameStop might have done this same thing. Financial markets serve a purpose and this type of scenario goes against the natural functionality of markets. The risk levels always rise with betting on perception this way. Perhaps GameStop will act as a gateway stock for people to begin investing careers.
The Electric Vehicle (EV) Bubble is rising and appears to be starting to burst. Issuances continue to pick up. The entire basket of EV stocks that we discussed in Episode #68 of Mental Models Podcast is now DOWN 42 % (at the time of this recording). The market will fluctuate and we will likely experience a surge with the approval of the US government stimulus. At this point it’s fair to declare the EV bubble BURST! Observing the current market is analogous to being a sea captain in the 1700’s. One has to wonder whether there is really land up ahead, or is it an illusion? What type of winds are about to blow in? In early 2021 It is like being in an El Nino year in the 1700’s, and everything is shrouded in mist. There are many unknowns, and a matter of waiting to see what is coming. We focus on what cognitive biases can tell us about investing. People may become more tolerant of risk when they use their stimulus checks to invest in the stock market, because this feels like found money. When you didn’t directly earn money, you have less personal attachment to it, which makes it easier to lose and enhances the tendency to take risks. By contrast, when the stock is declining, loss aversion can take over. This occurs when an individual refuses to sell because they do not want to feel foolish, or have to reverse themselves publicly. Experience in watching the market has shown that when a bubble bursts, it continues to decline for the next two years. During the extended fall, prices will typically level out, and then fall again. Individuals involved in the bubble may be prone to undesirable anchoring bias as they continue to wait for the price to recover to a previous level and then sell. You are not alone if you experience this happening to you! The 2021 "Alice in Wonderland Market" with all of its twists, turns and volatility will continue. Keep you eyes on the horizon, there is no easy fix! Don’t fall down the rabbit hole of cognitive biases along the way. Links Play and Understand Stock Market Bubbles: #68 https://podcasts.apple.com/us/podcast/mental-models-play-and-understand-stock-market-bubbles-68/id1458795155?i=1000505145809 #EV #electricVehicle #StockMarketBubble #EVBubble #Mentalmodelspodcast #cognitiveibias
Financial insecurity impacts our brain and body throughout human development. Stress is increased with more authority & responsibility. Lessons from of Robert Sapolsky’s book “Behave: The Biology of Humans at Our Best and Worst” For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Continue to listen to Mental Models Podcast to avoid the biases that are keeping you from making a profit in the market. Stay safe and healthy out there! Sapolsky's book provides a bird’s eye view on how our behavior evolves from seconds to months and years prior to the time that we act. It is well-stocked with excellent lessons about neuroscience, biology, genes, and culture. This lengthy book is engaging throughout and tackles complicated and controversial topics. Sapolsky provides an important biological link to explain the ways that we behave. He emphasizes that our biology is inextricably linked to our cultures and hierarchies. He takes on the challenges of social comparisons, wealth inequality, and systemic poverty. Relative positions in society link back to our mental health with implications for our health and biological function. Human happiness in the corporate world is discussed. It is impacted by A. Autonomy, B. Place in the hierarchy, and C. Number of direct supervised employees. A and B impact our well being in a positive way, while C increases our perceived stress. Three keys to lowering executive stress are noted: 1. Maintain a strong place in a hierarchy 2. Gain autonomy over your decisions 3. Outsource much of the daily micro management Other critical drivers of behaviors are discussed related to market participation. These include economic exchange games including the ultimatum game. People who participate in high trade volume (whether it be in a financial market or a street market) tend toward making fair offers. This establishes trust and reputation which lead to human thriving and the development of productive civilizations. This has implications about need for autonomy and experience in growing your own success. Zero-sum thinking leads toward people avoiding you. There needs to be a healthy balance between cooperation and competition. You can go very far in life if you ensure that you maintain mutual benefit with any sort of deal you make. The book frames many sophisticated and complex behaviors in terms of evolutionary theory, genes, and neurobiology. Honor and revenge cultures lead to tremendous stress and unhappiness. Sapolsky reminds us that so many systems from culture down to genes is one of modulation. Links: Robert Sopolsky’s book “Behave: The Biology of Humans at Our Best and Worst” https://www.amazon.com/Behave-Biology-Humans-Best-Worst/dp/1594205078
Brain and Investing lessons that we took from the book Sapiens by Yuval Noah Harari (2017). An excellent read covering many surprising insights about human behavior from individuals to global institutions. From a scientific standpoint this book highlights the unique cognitive capacity of Homo sapiens. We can imagine theoretical constructs that cannot actually exist. This tendency gave rise to our ability to create other fictions that we live by. These include monetary systems, corporations, and law structures. Group behavior and trust underlie many phenomena that we take for granted in our lives. The book discusses the development of money, a powerful fictional construct that works because we all believe in the fiction and agree upon its value. Money can be viewed as a contract that enables us to transact on the fly. For more depth on this topic, please listen to Episode #2 of this podcast “Value drives our lives” Another remarkably important development the book covers is the willingness of people to admit that they do not know something. Professing uncertainty serves as a driver for human progress. Admitting ignorance gives us a reason to explore the world and run experiments so that we find better answers. Our quest for learning enables us to fill in the blindspots that exist within our mental models of the world. Another fascinating feature of our lives is that we now imagine a better future filled with dramatic progress. This is a new phenomena relative to many prior civilizations that did not have reasons for optimism, since they were much more subject to disease, lack of progress, and stagnation. Trust leads to cooperation which leads to growth. This leads to greater optimism and even more trust, which can transform a society for the better. Chapter 16, The Capitalist Creed is likely the most interesting chapter for our audience. The insight that trust underlies credit is fundamental to progress. With credit, growth is possible in a nearly magical way. Paying back loans led to further extension of investment and this drove history forward, rather than the dictator model where a monarch determines that land should be acquired by conquest. History is not predetermined. Rather, it is a dynamic series of complex interactions that can take unexpected turns and is often only predictable in retrospect. Please see our previous episode #13 on the Hindsight Bias if you find this topic compelling and want to hear more. A final interesting point about human progress is asking the question “are we happier?” after all of the progress that we have made. This remains open for debate and may inspire new research aimed at addressing our core needs as our lives become further enmeshed within technology and widespread information availability. We end by touching upon the intriguing topic of “brain hacking”. Links: Sapiens by Yuval Noah Harari (2017) Read more on Amazon https://www.amazon.com/Sapiens-Humankind-Yuval-Noah-Harari-ebook/dp/B00ICN066A/ref=as_li_ss_tl?pf_rd_m=ATVPDKIKX0DER&pf_rd_p=fcaa6d12-8b2b-4ad7-b277-864b2da79f6e&pf_rd_r=6FFDPEP8Z6AEX1RBSPTF&pd_rd_wg=Rl5OI&pf_rd_s=desktop-dp-sims&pf_rd_t=40701&pd_rd_w=T017i&pf_rd_i=desktop-dp-sims&pd_rd_r=3fdfa333-966e-11e8-a126-fd3c94bb211d&pd_rd_i=B00ICN066A&psc=1&refRID=6FFDPEP8Z6AEX1RBSPTF&linkCode=ll1&tag=natsite-20&linkId=42ececba032ff9e0d90705e1943bacac&language=en_US
Mental Models Podcasts predicts that this historic and unprecedented bubble will crash by the second quarter of 2021. Bubbles are driven by narratives. Bubbles have an end but timing the end of the bubble is unknown, which is the risky part, and very different than sports betting. Predictors are, volatility, age tilt, issuance, market cave, and acceleration. How do you understand bubbles...visiting with historical features of bubbles, academic literature, lessons learned from Saberpoint Capital’s review, biases, and looking forward into 2021. Robin Greenwood, Andrei Shleifer, and Yang You (2017) observed the period of 1926-2014 identified 40 different bubbles, suggesting bubbles are not that common. The four main findings are presented on pages 2-3 in Greenwood, et al, paper based on Eugene Fama’s work, see Link https://doi.org/10.1016/j.jfineco.2018.09.002. [Eugene Fama (academic papers listed below)] A SPAC investment is a Special Purpose Acquisition Company (SPAC)”created solely to merge or acquire another business and take it public”, this is often a cheaper option to a PO (public offering). Biases to be aware of are optimism and fear of missing out that could push your towards the bubble. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Continue to listen to Mental Models Podcast to avoid the biases that are keeping you from making a profit in the market. Stay safe and healthy out there! Fama’s Academic papers: Fama, Eugene F., 1965, “The Behavior of Stock-Market Prices,” Journal of Business 38, 34-105. Fama, Eugene F, and Kenneth R. French, 1992, “The Cross-Section of Expected Stock Returns,” Journal of Finance 47, 427-465. Fama, Eugene F, and Kenneth R. French, 1997, “Industry Costs of Equity,” Journal of Financial Economics 43, 153-193. Fama, Eugene F., 2014, “Two Pillars of Asset Pricing,” American Economic Review 104, 1467- 1485.
COVID-19 has created an unprecedented impact on the stock market. There have been clear wining and losing stocks in 2020, where will these stock go in 2021? We review the uncharted stock market ahead, stocks to consider travel, #RV, #technologies, & #paper products. So much more to think about with the change that the vaccines for COVID_19 will bring - #hope for a healthier economy. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Continue to listen to Mental Models Podcast to avoid the biases that are keeping you from making a profit in the market. Stay safe and healthy out there!
Analogies help when we are faced with new challenges. Current events matter for the stock market, let’s frame these current events in relationship to historical perspective of the 2016 election and the impact of the market. ‘Political theater’ impacts the stock market, with the unknowns of the last 4 years and the uncertainty of the control of the senate for 2021. The. Market is a forward looking mechanism and what is the market thinking about the future, in terms of the most positive and most negative outcomes. In reality even if you know the outcome, you don’t know the response that the market will take. In six to 12 months there will be an economic recovery as the vaccine is distributed, the market will continue to watch . Currently, There is a great deal of bullishness and optimism. As the year ends that pattern will continue into 2021. Our next podcast #66 will focus on the stocks and industries that are the winners and losers of 2020, going into 2021 due to the COVID-19 effect. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Continue to listen to Mental Models Podcast to avoid the biases that are keeping you from making a profit in the market. Stay safe and healthy out there!
A talent that you have, but will it last, unlikely! We all want that superior money earning performance to continue, and we enjoy the success of an individual over a team (Jessie Walker and Tom Gilovitch reported on it in 2020, links below). Because we like narratives and we want to be the hero of our story, just like Kolby Bryant or LeBron James were for the Lakers. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Continue to listen to Mental Models Podcast for updates on the current state of the market. Stay safe and healthy out there! Links: Walker & Gilovich (2020) Journal of Personality and Social Psychology https://doi.apa.org/doiLanding?doi=10.1037%2Fpspa0000256 More on Streaking Star effect in Science Daily https://www.sciencedaily.com/releases/2020/08/200831094719.htm
Hot hand effect is the mystic behind your winning streak, despite all of your theorizing. There are many factors that explain the wins in the stock market, but the hot hand effect/bias is one to consider. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Continue to listen to Mental Models Podcast for updates on the current state of the market. Stay safe and healthy out there!
Moving parts of the current economy has been influenced by the pandemic. This is an unprecedented time and reflects a poor experimental design. What is changing and what is holding steady, if anything? The government continues to print money, but has delayed another stimulus package. At one end the economy is being squeezed, (leisure and travel) and at the other end expanded, (home goods and home improvements). 2020 is about trying something new and innovative as we continue to adjust to the rise and fall of the impact by COVID-19 and the individual states response in opening and closing of society. We have to consider multiple possible futures, so acting with certainty on anything is difficult! Recommended to play both ends, products that are strong now, and others that will be sure to come back, such as concerts. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Continue to listen to Mental Models Podcast for updates on the current state of the market. Stay safe and healthy out there!
Compassion and our basic human values drive us. In this episode we revisit a popular episode, and discuss values in detail from both an investing & psychological perspective. Our mental models of other people’s behavior. As the market turns…Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Join Dr. Dan Krawczyk, host of Mental Models Podcast and Deputy Director of the Center for BrainHealth(Dallas TX)and Bonnie Pitman (former director of the Dallas Museum of Art, Bonnie is a national leader in the public engagement of art) for a FREE virtual talk on compassion. How can we become more compassionate? How do our brains accomplish compassion? What effects does compassion have on others and on ourselves? They will tell us more about the biology and psychology of compassion, who will explain the benefits of leading a compassionate lifestyle. Bonnie will also teach us skills and methods for us to refine our practices to become more compassionate individuals. LOCATION Virtual: A link to access the event will be provided upon registration. DATE: 9/17/2020 TIME: 7:00-8:00 PM (central time) TICKETS: Free! Pay it forward by sharing with a friend. REGISTER (copy and paste link) https://brainperformanceinstitute.force.com/BPI/evt__QuickEvent?id=a233u000001UUaG Links: Chart of Basic Human Values by Schwartz: https://en.wikipedia.org/wiki/Theory_of_Basic_Human_Values Mental Models Podcast Episode #2 "Value Drives our Lives! Your Brain Response to Value and Investing" listen on Apple Podcast https://podcasts.apple.com/us/podcast/value-drives-our-lives-your-brains-response-to-value/id1458795155?i=1000434905197 or SoundCloud https://soundcloud.com/user-682136294/2-value-drives-our-lives-your-brains-response-to-value-how-it-affects-our-investing-lives Mental Models: "Inside Bill's Brain: Decoding Bill Gates": #28 listen on Apple Podcast https://podcasts.apple.com/us/podcast/mental-models-inside-bills-brain-decoding-bill-gates-28/id1458795155?i=1000453548100 Teed, A. R., Rakic, J., Mark, D., & Krawczyk, D. C. (2019). Relative activation patterns associated with self-transcendent and self-enhancement core values: An fMRI study of basic human values theory concepts in males. Social Neuroscience, 25,1-14.
Spotify changing up the podcasting distribution - does it make Spotify a good investment? Spotify is scooping up top podcasters like Joe Rogan and Kim Kardashian to enhance their reach and overall product. Mental Models Podcast is waiting on the phone call from Spotify, we are ready to join the A listers! As the market turns…Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Join Dr. Dan Krawczyk, host of Mental Models Podcast and Deputy Director of the Center for BrainHealth(Dallas TX)and Bonnie Pitman (former director of the Dallas Museum of Art, Bonnie is a national leader in the public engagement of art for a FREE virtual talk on compassion. How can we become more compassionate? How do our brains accomplish compassion? What effects does compassion have on others and on ourselves? They will tell us more about the biology and psychology of compassion, who will explain the benefits of leading a compassionate lifestyle. Bonnie will also teach us skills and methods for us to refine our practices to become more compassionate individuals. LOCATION Virtual: A link to access the event will be provided upon registration. TIME: 7:00-8:00 PM (central time) TICKETS: Free! Pay it forward by sharing with a friend. REGISTER (copy and paste link) https://brainperformanceinstitute.force.com/BPI/evt__QuickEvent?id=a233u000001UUaG
How does COVID-19 continue to influence market decisions? Online and e-commerce are impacting the market, as is the upcoming presidential election. What opportunities will the stock market provide? Small cap and large cap are seeing growth, and the indices are up, despite the “wall of worry” from possible presidential change. There is a tremendous liquidity put in the market and indices are up. As the market turns…Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE
What is the psychology of HOW Disney stock is traded due to #COVID-19? Disney provides ‘top notch escapism’ via multiple arms of the corporation. Additionally, psychology of Disney power is the ‘autobiographical memories’ associated with the Disney ears, Walt Disney himself, and the Disney Park experience. The stock will likely ride the COVID_19 wave despite, at least 50% of their operations having been impacted by COVID-19. Disney stock has held up; trading from about $150 to about $120. Fortunately, Disney has the ‘Castle in the sky’ AKA Disney Plus. Disney Plus is providing Disney stock with the illusion of doing well. Disney plus may become more habit forming during the pandemic or more people will buy Disney Plus for greater variety with more family time at home. For now, Disney Plus is not enriching Disney stock value, but the illusion of the ‘castle in the sky’ is likely keeping the stock stable. The recent reopening of Disney World in Florida has surely added to the stabilization of Disney stock. Due to these psychological factors we are cautiously optimistic, that the future for Disney stock looks rosy…also, when companies have a draw down they proactively make transitions to improve product and strengthen stock value in the future. In Chineses the symbol for crisis is the same for opportunity. What opportunities will the stock market provide? Listen to Mental Models Podcast show #60 to learn more about stock opportunities (coming soon). Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Links: Bob Igor CEO of Disney retires when stock was at $125. https://www.nytimes.com/2020/02/25/business/media/bob-iger-disney-ceo.html Disney Stock Price https://www.marketwatch.com/investing/stock/dis Autobiographical Memory https://en.wikipedia.org/wiki/Autobiographical_memory
Risk is always a part of investing but even more with the unknowns of opening and closing of the economy. Another factor driving the market is the money the feds are pumping out. Also, the influx of Robinhood accounts, driven by the lack of outlet for risky behavior (i.e. sports betting) and the stimulus checks. What happens to the stock market when sports open back up and those investors jump ship? There is a gap between Main Street and Wall Street, where will it take the market? Fear, Stress, and Optimism are driving the current market. Continue to listen to Mental Models Podcast for updates on the current state of the market. Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Links: Discussed but not recomending…Bar stool investing with Davey at Bar Stool Sports https://www.barstoolsports.com Robinhood accounts for individual investors. https://robinhood.com/us/en/
Everyone needs toilet paper! The initial increase in buying of toilet paper (AKA tissue paper) at the start of the COVID-19 crisis was likely due to a hoarding response, which is an instinctive psychological bias response found in nature. Hoarding is not always negative, in this case those that bought lots of toilet paper and hand sanitizer were more prepared. Tissue/Toilet paper made for home use is a different product, then toilet paper made for a public toilet. Although hoarding may not be continuing, more time is being spent at home has changed the needs for public vs home toilet/tissue paper. Thus, there is an increase in tissue products for at home use, and likely an increase in private label AKA store brand use of tissue. Why? Once you have tried private label tissue you may not feel there is much of a difference, and you can save money. With more people out of work, private label brand tissue will be one way they can save money. However, the ‘status quo bias’ also known as the default effect will keep us buying name brand tissue products over private label. It avoids us having to take a risk of an unknown product, which might result in money wasted if we don’t like the private label product. Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE
Psychological research can inform our behavior during the COVID-19 pandemic. How do we decide what is the most effective response and how we will act? Follow along with the research article from Nature Human Behaviour “Using Social and Behavioral Science to Support COVID-19 Pandemic Response” (link below). First, as humans we have a tribal response, and we stick with our group and take advice from our group leader. Who we listen too depends on our tribal orientation. Other factors on advice we follow, is if the advice is relevant to us - ‘think globally, but act locally’. Which can lead to group effects, see the link below on the study of the longest lines, which is linked to group conformity. Third, we will also follow modeled behavior of those we respect. Also, it is important that leaders reach all people through a diversity of perspectives, think MORAL behavioral and the benefits to all. Most important be wary of ‘idea inoculation’. Which is when the initial idea is presented in a weak argument, resulting in people not following the advice. For example, think of individuals who might wear a recommended face mask on their chin, vs. over their mouth and nose. A better argument to encourage engagement with wearing face masks, and protect from ‘idea inoculation’ is: “when you are wearing a mask, it protects you from me”. Final thought, keep physically distant and stay psychologically engaged for stress reduction and positive health outcomes. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE
Jan. - Feb., 2020 was a period of ‘psychological inoculation’, in that we have heard this before, viruses come and go, like the flu and N1H1, and we will be okay. March - April, 2020 was a period of acknowledgment, that this virus is real and dangerous. Followed by the rapid onset of fear, resulting in a stress response. Fear is usually a quick moment that passes. That has not happened with the pandemic. Stress usually results in action, and there was some actions by individuals and governments that were surprisingly bipartisan and encouraged safety measures. Although these government responses across the world were confusing at times, which increased stress from more unknowns. Continued stress response can be physically and emotionally damaging. Read more on stress in #1 bestselling stress book “Why Zebras Don’t get Ulcers” by Robert M. Sapolsky (link below). For many people there are continued unknowns associated with job loss and financial and or food insecurity which may continuing the fear and stress response long past the current time period. May - June, 2020 is a period of psychological relief from virus concerns in that there is a period of predictability. Good health practices and ‘physical distancing’ are being setup and implemented. Links: “Why Zebras Don’t get Ulcers” by Robert M. Sapolsky https://www.amazon.com/Why-Zebras-Dont-Ulcers-Third/dp/0805073698 Guide to stress and stress related diseases.
Norepinephrine sends signals widely throughout the brain that move us into a task motivated stated. A brain regain called the locus coeruleus located in the brain stem is involved in the release of norepinephrine. As we shift to a more passive state, another type of brain cell called astrocytes take over (they get their name from their star shape). Astrocytes cells support neurons in the brain, and are the most abundant glial cells in the brain. A study by Yu Mu et al, 2019 (link below) with Zebra fish shows that Norepinephrine was released when they are moved to actively swim. Meanwhile, astrocyte activity increased when the fish moved to a passive state. When workers get tired, just like the Zebra fish who felt they were not getting anywhere with their swimming, a passive state sets in the brain. To overcome this passive state and increase Norepinephrine release into the brain, take a break or change up work pattern to increase productivity again. Other ways to increase task-engaged brain activity include getting early light exposure and exercising. Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Links: Glia Accumulate Evidence that Actions Are Futile and Suppress Unsuccessful Behavior https://www.cell.com/cell/pdf/S0092-8674(19)30621-X.pdf Decision Fatigue Mental Models podcast…. Russell Foster book on sleep. https://www.amazon.com/Circadian-Rhythms-Short-Introduction-Introductions/dp/0198717687 Video of Dr. Daniel Krawczyk and George Baxter on ETFguide Which Behavioral Traits are Hurting Your Investment Results? https://youtu.be/34VnOUyNgcA Investors are often their own worst enemies. That's what investing great Ben Graham once concluded. In this episode, Lynn Dolan @ETFguide TV talks with Authors Daniel C. Krawczyk and George H. Baxter, JD, CFA about their new book Understanding Behavior BIA$: A Guide to Improving Financial Decision Making. Both men also host the Mental Models Podcast. https://youtu.be/34VnOUyNgcA Other resources for ETFguide TV viewers: 1. Free ETF Guides https://tinyurl.com/y2gep5kj 2. Habits of the Investing Greats https://tinyurl.com/y6cg9n4v 3. Index Investing Show https://tinyurl.com/y3862uaa
Global economy has stalled in early 2020 due to COVID-19 and governments have provided stimuli. The stock market has rallied; SMP is up from the bottom which is the most dramatic rise of the market EVER! CONCERN: exuberance in the market does not take into account the return to normal, as there is a new normal, which is still unknown. Narratives fill the gaps of unknown reality, and the narratives are less reliable than ever before, since analogies are made in the context of experience. Many business will be gone, or have take on significant indebtedness. Largely what has driven the stock market to rally is corporations borrowing at low interest rates, then buying more expensive equity. TWO trillion $ of equity expansion! “Punctuated Equilibrium” by Stephen J. Gould explain the evolution of ecological system of the stock market and the global business system. In the current business world the environmental shifts in business have created a ‘disequilibrium’ due to breaks in business and lifestyle. This alteration in business ecological system is looking for ‘Equilibrium’, which is not likely to occur very soon, and possibly not without a vaccine for COVID-19! Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE Links: Robinhood to track individual investors on individual stocks. https://robinhood.com/us/en/ Punctuated Equilibrium by Stephen J. Gould. https://www.hup.harvard.edu/catalog.php?isbn=9780674024441 Peppered moth of UK. https://www.bbc.com/news/science-environment-36424768 Have you heard ‘Mental Models: Reflexivity: #20’ by Mental Models Podcast | Behavioral Finance https://soundcloud.com/user-682136294/mental-models-reflexivity-20
African Swine Fever in China has depopulated the hog heard in China. China is responsible for 50% of global production and consumption of pork. The coronavirus was completely unexpected and has further impacted the pork market with meat packing plants closing due to workers and their family members, sadly becoming ill or dying from Covid-19. Closure of meat packing plants to protect the meat packing workers and their families is necessary and the right this to do! The amount of pork in cold storage has decreased as of the recording of this podcast from 4 weeks to 3 weeks, and may have dropped further. The breaking of the Global protein chain, is an event that was never expected to be seen in the modern world and is a solid reason for continuing to reinvestigate the markets. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE
Our basic human values drive us and drives up our oxytocin levels in our brain. Provided are applied examples of values in the investing world. We consider the basic human values by Shalom Schwartz tying together and the interesting relationships among the different values.We talk conservatism, openness to change, benevolence, universalism, achievement, and power. We discuss how these values are embedded and carried out within the networks of our brain. The pie chart of basic human values theory by Shalom Schwartz, will help you navigate Episode #51 and Episode #47: "Mental Models: Motivations That Drive You Part 1“. Listen here on the Mental Models Podcast website: https://www.mentalmodelspodcast.com/post/motivations-that-drive-you-basic-human-values-47. Interested in more on this topic and learning about your brain Buy“Understanding Behavioral Bia$” to learn more about overcoming biases that are keeping you from investment success! http://amzn.to/2XHtsOE LINKS: Mental Models: Motivations That Drive You: Basic Human Values-Part 1 #47 listen on Apple Podcast https://podcasts.apple.com/us/podcast/mental-models-motivations-that-drive-you-our-basic/id1458795155?i=1000468730689 Mental Models Podcast Episode #2 "Value Drives our Lives! Your Brain Response to Value and Investing" listen on Apple Podcast https://podcasts.apple.com/us/podcast/value-drives-our-lives-your-brains-response-to-value/id1458795155?i=1000434905197 or SoundCloud https://soundcloud.com/user-682136294/2-value-drives-our-lives-your-brains-response-to-value-how-it-affects-our-investing-lives Mental Models: "Inside Bill's Brain: Decoding Bill Gates": #28 listen on Apple Podcast https://podcasts.apple.com/us/podcast/mental-models-inside-bills-brain-decoding-bill-gates-28/id1458795155?i=1000453548100 Teed, A. R., Rakic, J., Mark, D., & Krawczyk, D. C. (2019). Relative activation patterns associated with self-transcendent and self-enhancement core values: An fMRI study of basic human values theory concepts in males. Social Neuroscience, 25,1-14. https://www.tandfonline.com/doi/abs/10.1080/17470919.2019.1598893 Wealth of Nations by Adam Smith. https://en.wikipedia.org/wiki/The_Wealth_of_Nations Jane Goodall: https://en.wikipedia.org/wiki/Jane_Goodall #mentalModels #MentalModelsPodcast #UnderstandingBehavioralBias #Bias #DecisionMaking
Analogies help our brains understand a current event often using a past event, but with our brain filling in unknown gaps and creating possible dangerous inferences. Comparisons between the flue, N1H1, SARS, 1918 flu or even 9/11 are likely dangerous for understanding how society and investments will be impacted. Current events are different than past events. Analogies start forming from a ‘target analogy’, such as a believed equivalent past event, then our brains begin a mapping process from ‘source analogy’. Interested in learning more about investing, analogies, YOUR #Brain, and how we think to improve your financial gain in the market, read the five star reviewed book “Understanding Behavioral Bia$” amzn.to/2XHtsOE #learn Researchers Dr. Krawczyk has worked with in the filed analogy include Dr. Keith Holyoak http://reasoninglab.psych.ucla.edu/KeithHolyoak.html and Dr. John Hummel https://psychology.illinois.edu/directory/profile/jehummel
How do we think psychologically about numbers? Especially in relation to the Covid-19 2020 pandemic and the impact on the stock market. Take into consideration the effect of the Anchoring bias and Base Rate Neglect in your mental model and decision making. A recession will come following the 2020 pandemic along with changes in behavior which will unmask unexpected changes. Be prepared, learn more on the topic of Cognitive Biases and how we think to improve your financial gain in the market, read “Understanding Behavioral Bia$” http://amzn.to/2XHtsOE #learn
Biases investors need to be aware of include ILLUSIONS OF INVULNERABILITY and ILLUSIONS OF CONTROL. Due to years of investing success investors feel invulnerable and are making decisions from their mental model which needs recalibration, along with the bias Illusion of Control. For more on this topic explore FIVE STAR reviewed book “Understanding Behavioral Bia$” http://amzn.to/2XHtsOE There will continue to be an evolution to biases that impact us as the pandemic unfolds. Consider the REFLECTIVE EFFECT - the actions and beliefs investors have and are self reinforcing, we need to recalibrate things we believe to be true based on life PRE-PANDEMIC. See George Soros book “Alchemy of Finance” for more on this topic. https://www.amazon.com/Alchemy-Finance-Reading-Market-1994-05-06/dp/B01A65GK8Y/ref=sr_1_2?dchild=1&keywords=alchemy+of+finance&qid=1585680691&s=books&sr=1-2. Investors need to make rational decisions and beware that they are emotional charged. It is necessary to rationally assess the market despite the environmental influences. VIDEO of Dr. Daniel Krawczyk on Fox4News discussing new book “Understanding Behavioral Bia$" https://www.fox4news.com/video/655696
Our basic human values drive us. In this episode we discuss values in detail from both an investing and psychological perspective. Our mental models of other people’s behavior and our own can helps us to predict steps management might take in a company that we are considering purchasing. We discuss a variety of the basic human values outlined by Schwartz. Note that these have been examined across numerous cultures. All cultures show evidence of these values, but they are expressed somewhat uniquely- just like individuals. We have all of these values available in our psychology, but we emphasize some more than others in our daily lives and over the course of our human development. We talk conservatism, openness to change, benevolence, universalism, achievement, and power. We discuss how these values are embedded and carried out within the networks of our brain. The pie chart of basic human values theory by Shalom Schwartz, will help you navigate Episode #47: "Mental Models: Motivations That Drive You". Listen here on the Mental Models Podcast website: https://www.mentalmodelspodcast.com/post/motivations-that-drive-you-basic-human-values-47. Don’t miss Part 2 of Mental Models: Motivations That Drive You: Basic Human Values-Part 2 where we provide applied examples of the investing world. We also encourage you to review Mental Models Podcast Episode #2 "Value Drives our Lives! Your Brains Response to Value and Investing" which is a similar but different perspective on the human value system and its relationship to our brain; listen on Apple Podcast https://podcasts.apple.com/us/podcast/value-drives-our-lives-your-brains-response-to-value/id1458795155?i=1000434905197 or SoundCloud https://soundcloud.com/user-682136294/2-value-drives-our-lives-your-brains-response-to-value-how-it-affects-our-investing-lives …Buy…our BOOK “Understanding Behavioral Bia$” to learn more about overcoming biases that are keeping you from investment success! http://amzn.to/2XHtsOE Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. #mentalModels #MentalModelsPodcast #UnderstandingBehavioralBias #Bias #DecisionMaking
Do you have the will power to keep from buying that stock too early? Humans need the will power to delay gratification - how do we get it? Discipline is important to success. Walter Mischel’s, research which is commonly called the “Marshmallow Test” with preschoolers and self-control provides great insight. Video of Marshmallow Experiment https://youtu.be/Rwxf1BTyKz4. Although, discipline is the key, such as waiting to buy or sell that stock at the perfect moment. Some of the toddlers in the Marshmallow experiment who ate the Marshmallow right away, went on to have metoric careers. What is most important is getting the timing correct and having a plan. Another tip with self control, is being aware of the environment and having a diversity of skills, which helps with avoiding groupthink biases. Listen to Mental Models Podcast #’s 3 & 4 on GroupThink. We can use nudges towards our passion and healthier options. See the book “Nudge” by Thaler & Sunstein for tips and successful outcomes: https://amzn.to/2Q4Uihd …Buy…“Understanding Behavioral Bia$” to learn more about overcoming biases that are keeping you from investment success! http://amzn.to/2XHtsOE Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. #mentalModels VIDEO of Dr. Daniel Krawczyk on Fox4News discussing new book “Understanding Behavioral Bia$" https://www.fox4news.com/video/655696q
The keys to flexible thinking come from exploring the different solutions to a problem vs. exploiting the rewards, resulting in perseveration behavior. In this episode we explore the ‘set effect’ which is linked to problem solving. An example of successful flexible thinking and over coming the ‘set effect’ is when Warren Buffet realized that investing had changed and it was time to find a new approach and move away from Net-Nets, which he had learned from his mentor Benjamin Graham. Investing tips include discipline, awareness too changes and sticking to the circle of competence. See Chapter 8 in our book “Understanding Behaviorally Bia$” to learn more about these 3 tips, as well as post-moretems and deep analysis. http://amzn.to/2XHtsOE Chess experts such as the chess masters at the University of Texas at Dallas (UTD) are experts and can utilize flexible thinking and overcome the “set effect.” As we become experts in a field, such as investing we can become more flexible thinkers. Research by Dr. Daniel Krawczyk on chess experts. https://www.utdallas.edu/reasoninglab/research/expertise-and-cognition/ UTD chess team: https://www.utdallas.edu/chess/chess-team/ “Understanding Behavioral Bia$” will help you overcome the biases that are keeping you from investment success! http://amzn.to/2XHtsOE Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. #mentalModels VIDEO of Dr. Daniel Krawczyk on Fox4News discussing new book “Understanding Behavioral Bia$" https://www.fox4news.com/video/655696
In this episode we consider how our memory systems are organized and what we can do to help become better at remembering in a variety of areas of our lives. We consider memory from a multiple memory systems approach focusing on working memory- our short-term store. Working memory has a clear limit and we can use a “chunking” strategy to group items together allowing us to remember more. We discuss the extreme versions of this tactic described by expertise researcher K. Anders Ericsson and his book “Peak” https://www.amazon.com/Peak-Secrets-New-Science-Expertise/dp/1531864880 We also discuss how you can employ tips to maximize your memory performance in the context of work and investing. We touch on a variety of other factors that may also impact your working memory. - BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. #mentalModels VIDEO of Dr. Daniel Krawczyk on Fox4News “Understanding Behavioral Bia$" https://www.fox4news.com/video/655696
Selection Bias can keep us hunting for what is most present on our mind, Waldo or the new Toyota we are planning to buy. Once we have committed to a decision we will see that specific brand everywhere. We are experiencing selection bias. Our brain is guiding us to what is most present on our minds. “The Invisible Gorilla” book by C. Chabris and D. Simons explores this famous experiment on how your mind actually works - our intuition can deceive us. https://www.amazon.com/Invisible-Gorilla-Other-Intuitions-Deceive-ebook/dp/B0036S4EYQ - BUY BOOK “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | by hosts of Mental Models Podcast: Dr. Daniel Krawczyk & George Baxter, JD, CFA. Behavioral finance advice and solutions. The sales of the book support the Mental Models Podcast directly! Positive reviews on Amazon increase the likelihood that others will become aware if the book “Understanding Behavioral Bia$”. VIDEO of "Understanding Behavioral Bia$" https://www.fox4news.com/video/655696 This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #UnderstandingBehavioralBias. #mentalModels
Be the courageous investor! Fear linked to 3 things: 1: To little information 2: Potential Threat 3: Helplessness Investing is linked to 2 things: 1: Fear 2: Greed The Salience Bias is linked to fear and uncertainty and your primal brain functions in your amygdala. There are 2 types of cognition 1)hot and 2)cold. Hot cognition is primal and linked to lymbic system, while your cold cognition is your rational view. Engage your investing process and training established during cold cognition and NOT during points of fear motivated by investing or hot news cycle (i.e. hot cognition). @ 20 mins in review the Papa John Pizza stock effect - use that cold cognition and eliminate the fear! -Thank you to all who have bought our book “Understanding Behavioral Bia$” - Please write a review on Amazon http://amzn.to/2XHtsOE. The sales of the book support the Mental Models Podcast directly! Positive reviews on Amazon increase the likelihood that others will become aware if the book “Understanding Behavioral Bia$”. - BUY BOOK “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | Behavioral finance advice and solutions. #mentalModels This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #UnderstandingBehavioralBias
Rationalization and thesis drift is akin to wrestling with muddy pigs... it’s slippery and you will lose $$$. For investors ”thesis drift” is the tendency to rationalize bad news and come up with fresh reasons to still like a stock. Don’t accommodate your viewpoint for a group of facts that you were not previously aware of. Consistency Bias: don’t flip-flop! -Thank you to all who have bought our book “Understanding Behavioral Bia$” - please write a review on Amazon http://amzn.to/2XHtsOE. The sales of the book support the Mental Models Podcast directly! Positive reviews on Amazon increase the likelihood that others will become aware if the book “Understanding Behavioral Bia$”. - BUY BOOK “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | Behavioral finance advice and solutions. #mentalModels This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #UnderstandingBehavioralBias
“Understanding Behavioral Bia$” follow along with book by Dr. Daniel Krawczyk and George Baxter, JD, CFA, (Chapter 8) while listening to this podcast. BUY on Amazon https://amzn.to/2XHtsOE (copy and paste). This podcast is fifth in the investment process series. It is the planning up from the matters. #1 tip to avoid pain is to use stop loss techniques! -BUY BOOK “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | Behavioral finance advice and solutions. #mentalModels This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #UnderstandingBehavioralBias Visit mentalmodelspodcast.com for upcoming talks and show notes. SOLD OUT Talk on Money and Your Brain: How Cognitive Biases Impact Investing with Dr. Daniel Krawczyk and George Baxter, JD, CFA. 01/23/2020 06:30 PM - 08:00 PM Cognitive biases are often a result of your brain's attempt to simplify information processing. They are rules of thumb that help you make sense of the world and reach decisions with relative speed. Unfortunately, these biases sometimes trip us up, leading to poor decisions and bad judgments. A neuroscientist and a hedge fund manager will look behind the curtain of your conscious mind and take a deep dive into cognitive biases that impact your financial success. Together they will identify strategies to slow you down so you avoid unnecessary risk and make better decisions. Read more about this topic in Dr. Daniel Krawczyk & George Baxter, JD, CFA latest book “Understanding Behavioral Bia$: A Guide to Financial Decision Making”. Sponsored By: Bank of Texas Where & When Brain Performance Institute 2200 W Mockingbird Lane Dallas, TX 75235
Recap of general market trends experienced in 2019 and interpret what they might mean for the economy in 2020. The expansion is the longest we have see, we are now beyond what it occurred from 1990-2000. Growth has been tepid so it might continue. We discuss economic indicators and historical trends from the past. BUY BOOK “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | Behavioral finance advice and solutions. #MentalModels This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #UnderstandingBehavioralBias Visit mentalmodelspodcast.com for upcoming talks and show notes. SOLD OUT Talk on Money and Your Brain: How Cognitive Biases Impact Investing with Dr. Daniel Krawczyk and George Baxter, JD, CFA. 01/23/2020 06:30 PM - 08:00 PM Cognitive biases are often a result of your brain's attempt to simplify information processing. They are rules of thumb that help you make sense of the world and reach decisions with relative speed. Unfortunately, these biases sometimes trip us up, leading to poor decisions and bad judgments. A neuroscientist and a hedge fund manager will look behind the curtain of your conscious mind and take a deep dive into cognitive biases that impact your financial success. Together they will identify strategies to slow you down so you avoid unnecessary risk and make better decisions. Read more about this topic in Dr. Daniel Krawczyk & George Baxter, JD, CFA latest book “Understanding Behavioral Bia$: A Guide to Financial Decision Making”. Sponsored By: Bank of Texas Where & When Brain Performance Institute 2200 W Mockingbird Lane Dallas, TX 75235 01/23/2020 06:30 PM - 08:00 PM
How politics might influence the stock market in an election year! All of this while the standing president of the United States is under investigation for impeachment by the Senate. What are your predictions for the next president of the United States of America? Which stocks do you seeing impacted? @ 11:30 minutes George discusses his stock pick that could be influenced by the election year and why. Listen in. BUY BOOK “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | Behavioral finance advice and solutions. #mentalModels This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast, it's not a brain in a jar. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #UnderstandingBehavioralBias Visit mentalmodelspodcast.com for upcoming talks and show notes. SOLD OUT: Talk on Money and Your Brain: How Cognitive Biases Impact Investing with Dr. Daniel Krawczyk and George Baxter, JD, CFA. 01/23/2020 06:30 PM - 08:00 PM Cognitive biases are often a result of your brain's attempt to simplify information processing. They are rules of thumb that help you make sense of the world and reach decisions with relative speed. Unfortunately, these biases sometimes trip us up, leading to poor decisions and bad judgments. A neuroscientist and a hedge fund manager will look behind the curtain of your conscious mind and take a deep dive into cognitive biases that impact your financial success. Together they will identify strategies to slow you down so you avoid unnecessary risk and make better decisions. Read more about this topic in Dr. Daniel Krawczyk & George Baxter, JD, CFA latest book “Understanding Behavioral Bia$: A Guide to Financial Decision Making”. Sponsored By: Bank of Texas Where & When Brain Performance Institute 2200 W Mockingbird Lane Dallas, TX 75235 01/23/2020 06:30 PM - 08:00 PM
There won't be any regular episodes of Mental Models Podcast as we take a holiday break. Regular service will resume the first full week in January 2020. In the meantime, enjoy a holiday message and we have recapped a popular podcast on Behavioral Bia$. Join Dan and George at the Center for BrainHealth, Dallas, TX on 1/23/20 as they discuss “Money and your Brain: How Cognitive Biases Impact Investing” based on their book "Understanding Behavioral Bia$" link below. Thanks to everyone for listening and we wish you and yours a happy and healthy 2020! BUY BOOK “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | Behavioral finance advice and solutions. #mentalModels This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #UnderstandingBehavioralBias Join Dan and George at the Center for BrainHealth as they discuss “Money and your Brain: How Cognitive Biases Impact Investing” on 1-23-20 @6:30pm link: https://brainperformanceinstitute.force.com/BPI/evt__QuickEvent?id=a233u0000008KvU Sips & Science Money and Your Brain: How Cognitive Biases Impact Investing with Dr. Daniel Krawczyk and George Baxter, JD, CFA Cognitive biases are often a result of your brain's attempt to simplify information processing. They are rules of thumb that help you make sense of the world and reach decisions with relative speed. Unfortunately, these biases sometimes trip us up, leading to poor decisions and bad judgments. A neuroscientist and a hedge fund manager will look behind the curtain of your conscious mind and take a deep dive into cognitive biases that impact your financial success. Together they will identify strategies to slow you down so you avoid unnecessary risk and make better decisions. Read more about this topic in Dr. Daniel Krawczyk & George Baxter, JD, CFA latest book “Understanding Behavioral Bia$: A Guide to Financial Decision Making”. Sponsored By: Bank of Texas Where & When Brain Performance Institute 2200 W Mockingbird Lane Dallas, TX 75235 Visit mentalmodelspodcast.com for upcoming talks and show notes.
“Understanding Behavioral Bia$” follow along with book by Dr. Daniel Krawczyk and George Baxter, JD, CFA, (Chapter 8) while listening to this podcast. BUY on Amazon https://amzn.to/2XHtsOE (copy and paste). Fourth in the series on the investment process - with top fund manager tips of the steps of analysis and execution. Biases to be aware of are recency bias also at minute 6:58 base rate neglect - which is also discussed in podcast #28 on Bill Gates brain. Min. 12:30 Group think biases are discussed with remedies. Min. 1645 research has value - don’t buy the sock just because you did the research. Discussion includes: Sunk cost bias Memory based bias - availability bias Attention and optimism bias EXECUTION of the Investment process Curse of Knowledge BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels Behavioral finance advice Visit mentalmodelspodcast.com for more insights. This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #understandingBehavioralbias
Follow along with our book “Understanding Behavioral Bia$” by Dr. Daniel Krawczyk and George Baxter, JD, CFA, (Chapter 8) while listening to this podcast. BUY on Amazon https://amzn.to/2XHtsOE (copy and paste). Electronic version and paperback. The purpose of fundamental research during the investment process is to understand the cooperative position of the business/stock and devise the value of the business of its ability to generate free cash flow now or in to the future. Create a predictive model of what you think the development of the fundamental aspects of the business will lead to from an operational stand point. How will Wall Street and other investors view the stock as these developments come to life. Minute 16:00: discussion of vaping stocks, industry and government oversight. Shad Row of Dallas. http://frtv.org/panelists-experts/expert-pages/frederick-e-“shad”-rowe/ https://www.craigwealthadvisors.com/blog/shad-rowe
Book review and origin story of "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making”. This book is a great tool to improve your investing skills. This is not a list of biases, but a guide that provides best practices to overcome biases when investing. Remedies to each bias are included. Learn about these biases and be able to capitalize off of the biases of other investors. Also, included is a summary of the investment process used in a successful hedge fund. Unlike other behavioral finance books, "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making” is a guide from the research side and the practitioners side. BUY on Amazon https://amzn.to/2XHtsOE (copy and paste)
Idea vetting is the second step in the Investment Process - how to improve your process and what Biases are keeping your from your financial and investing goals. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels More information at https://www.mentalmodelspodcast.com
Investment Process new series (3 parts) from Mental Models Podcast. Talking you through each step of the investment process, starting with idea generation and associated biases. Watch out for episodes II and III of the Investment Process. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels More information at https://www.mentalmodelspodcast.com NEW BOOK "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making" Available on Amazon NOW http://amzn.to/2XHtsOE Behavioral finance advice and solutions. More information at https://www.mentalmodelspodcast.com Be sure to listen to Mental Models: Group Think Part 1 and Mental Models: Group Think Part 2 for biases when borrowing an idea and how to manage and or avoid the bias pitfalls. https://www.mentalmodelspodcast.com.
Biases can come about and trip up your investing decisions when your moving to fast. Incorporate speed bumps into your process, such as a check list. Have a coffee (or a scotch) and think through your process! There is an upside to biases - consider the slow mode advocated by Daniel Kahneman. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels Behavioral finance advice and solutions. More information at https://www.mentalmodelspodcast.com
In the investing world some very distinctive feature are alerting you to a particular opportunity or something to be concerned about - Peaking your Curiosity. Base Rate Neglect Bias: Try to think in probabilities when ever possible, because there are so many statistics out there. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels Behavioral finance advice and solutions. More information at https://www.mentalmodelspodcast.com
Passive index funds (ex. S & P 500 can be over performed if an edge can be found. Ways to avoid bias in active and passive management. Episode #29 is discussed in our new book "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making", specifically Chapter 8. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels Behavioral finance advice and solutions. More information at https://www.mentalmodelspodcast.com This podcast is a listener requested topic - Thank you Waco of Dallas for your question and support. What are you interested in hearing about? Fill out this form - Thank You! https://www.mentalmodelspodcast.com/questions-you-want-answered-tell-us
A discussion of Bill Gate's mental models as observed in the 3 part documentary series on Netflix: "Inside Bill's Brain: Decoding Bill Gates". Bill Gates mental process protects him from a variety of cognitive biases, such as base rate neglect. Other biases discussed in relation to Bill Gates mental process include survivor bias, Illusion of control, and overconfidence. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels Behavioral finance advice and solutions. More information at https://www.mentalmodelspodcast.com Visit mentalmodelspodcast.com for more insights. Dr Daniel Krawczyk @TEDxUTD (10/21/19)- Brain Science for Investment Decisions. Video available soon!
Artificial Intelligence Part 2 with Mike Hughes from OutSystems in Portugal discussing uses of AI in investing, business and court proceedings as the AI judge! BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK by your hosts of Mental Models Podcast | Behavioral finance advice and solutions. More information at https://www.mentalmodelspodcast.com Be sure to listen to Mental Models: Group Think Part 1 and Mental Models: Group Think Part 2 for biases when borrowing an idea and how to manage and or avoid the bias pitfalls. https://www.mentalmodelspodcast.com. Dr Daniel Krawczyk @TEDxUTD (10/21/19)- Brain Science for Investment Decisions. Video available on you tube! #mentalModels
Artificial Intelligence enthusiast Mike Hughes discusses a range of topics including machine learning and the future of computing. Part 1 of a 2 part series in AI and investing. Mike is an accomplished "IT Renaissance Man". Mike is part of the OutSystems success story, which helps clients to become their own success stories using OutSystems low-code platform. Sound has been updated for audience! BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK by your hosts of Mental Models Podcast | Behavioral finance advice and solutions. More information at https://www.mentalmodelspodcast.com Dr Daniel Krawczyk @TEDxUTD (10/21/19)- Brain Science for Investment Decisions.
Consider the "bias luggage" that comes along with your frame and the frame of the market while investing and making investment decisions. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK by your hosts of Mental Models Podcast | Behavioral finance advice and solutions. More information at https://www.mentalmodelspodcast.com
The landscape of value investing has changed due to the availability of information. The rapid increase in information on businesses, stocks and more is decidedly liked to technology. The information highway has changed the process of value investing. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels Behavioral finance advice Visit mentalmodelspodcast.com for more insights. This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #understandingBehavioralbias
Value investing from Benjamin Graham to the lessons of Warren Buffet. Followed by what the picture is NOW. Review of modern day investing and how the landscape has changed and where the methodologies of these giants are still correct today and where they might not be. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels Behavioral finance advice Visit mentalmodelspodcast.com for more insights. This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #understandingBehavioralbias
Biases are part of the cognitive architecture of the brain. We can't avoid biases but we can think analytically and put speed bumps in our way to force us to check our assumptions. Biases covered included under the umbrellas of Attention biases, Memory bias, and Knowledge bias. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels Behavioral finance advice Visit mentalmodelspodcast.com for more insights. This book will help you overcome the biases that are keeping you from investment success! Authored by Daniel Krawczyk, Ph.D. & George Baxter, JD, CFA your hosts of Mental models Podcast. Published by Business Expert Press Behavioral Finance Book AVAILABLE NOW ON AMAZON http://amzn.to/2XHtsOE Do you want strategies to make better financial decisions? Do you need a translational guide to Thinking Fast and Slow? Do you want to be a better investor and earn more money? If you said yes to any or all of the above questions then this book is for you! #understandingBehavioralbias
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