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. Our upcoming book "Understanding Behavioral Bia$" will include this topic and more - November, 2019. Be sure to listen to Mental Models: Group Think Part 1 and Mental Models: Group Think Part 2 for biases when borrowing an idea and how to manage and or...
Biases can come about and trip up your investing decisions when your moving to fast. Incorporate speed bumps into your process, such as a check list. Have a coffee (or a scotch) and think through your process! There is an upside to biases - consider the slow mode advocated by Daniel Kahneman.
Behavioral finance book "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making" available November, 2019. Available on Amazon soon.
More information at...
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.
Behavioral fimamce book "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making" wiil launch on November 4, 2019, starting with the e-reader. The book is Available on Amazon.
Passive index funds (ex. S & P 500 can be over performed if an edge can be found. Ways to avoid bias in active and passive management. Episode #29 is discussed in our new book "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making", specifically Chapter 8. Tentative release of the e-reader book is November 4, 2019.
More information at https://www.mentalmodelspodcast.com
This is a listener requested topic - Thank you Waco of Dallas for your question and support....
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.
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!
Artificial Intelligence expert 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 PutSystems low-code platform. Sound has been updated for audience!
Artificial expert Mike Hughes discusses a range of topics including machine learning and the future of computing. Part 1 of a 2 Part interview. Mike is an accomplished "IT Renaissance Man". Mike is part of the OutSystems IT success story, which helps clients to become their own success stories using OutSystems low-code platform.
Consider the "bias luggage" that comes along with your frame and the frame of the market while investing and making investment decisions.
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.
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 they they might not be.
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. Visit mentalmodelspodcast.com for more insights and watch our for forthcoming book November, 2019 on Bia$:A guide to improving your financial success.
The macro economy picture NOW (8/2019)in the US that would have a world impact. What to watch: Consumer is strong; Fed has eased, but there is an inversion of the yield curve. Mental Model Podcast discusses other factors that could indicate a recession is 22 months away and George Baxter's mental model of a possible recession.
Forthcoming book: "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making" AVAILABLE...November, 2019
By Dr. Daniel Krawczyk &...
Use the mental model of reflexivity as applied by George Soros to capital markets leading to investing success. In summary, a rising stock price can reflect the fundamentals of the business which can lead to a rising stock price. More at MentalModelsPodcast.com and on twitter @ModelsFinance. As always thank you for listening and please follow, subscribe and like the podcast - it matters!
Forthcoming book: "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making" ...
Helpful to have a schema or picture of how the economy works so you don't overreact to news reports such as Chinese tariffs, that might rattle the market. Further discussion of predictors of recession and investing strategies in a turbulent market. Visit Mental Models Podcast for link to video mentioned in the podcast and links to our YouTube channel. As always thank you for listening and please follow, subscribe and like the podcast - it matters!
Is the US headed into a recession or contraction in the economy? Confirmation Bias is when we force our views upon the macro data, and there is always something there. What are indicators of a recession? Humans are excellent data processors for the short term, we need indicators to watch for. It is necessary to identify what is actionable, but macro events in the Economist Magazine for example, can obscure our perspective, due to over coverage. A better strategy would be to step back and...
Understand your mental model, and develop a competitive advantage of investing strategies, and learn the brain science behind the knowledge illusion. Like a 'prosthetic for your brain' extra knowledge can appear to expand your horizons, but beware it maybe an illusion.
"Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making" AVAILABLE...Fall, 2019
Authored by Dr. Daniel Krawczyk & George Baxter, JD, CFA
A challenge for investors is get the timing correct in their forecasts. How does the timing of current events impact the market and what is your brains role? This is relevant to the Equifax data breach and the 2008 housing crisis. Some experts were calling out the possibility of an economic crisis linked to subprime mortgage practices, but their timing was early. Predicting the speed at which events will unfold is extremely difficult. One particular speculation is the current day 'loss of...
Learn strategies to fix memory biases that keep you from financial success. Increase your profit margin! Learn the science of memory to truly understand how you are being tripped up by memory bias. Followed by tips from a hedge fund manager who currently uses these strategies in his shop leading to great $$ success. Investors, sales people, business, entrepreneur or solo-E can increase profit margin with these strategies, tips and fixes.
Expertise can serve an investor very well, although it can take 10,000 hours to be a true expert in a particular field. Skills developed in another discipline that has a similar process, can allow an investor to build grit by sticking to a specific discipline, while building a mind set to build towards expertise. Top tip, prioritize sleep because it is restorative and helps with memory and building of expertise. Also, investors will rely on industry 'experts' to understand a particular...
Not being able to see the difference between what you know NOW relative to what you KNEW before IS hindsight bias - a psychological bias that can be overcome in investing. How? Choose stocks based on a sound analysis of company financial performance and for their true market value. Like politicians and weathermen, investors can't predict the future. Investors can focus on their process and recheck their thinking leading to greater profits. Remember that the world is complex and many factors...
Short sales are rarely the simple inverse of a long sale-LEARN 3 strategies for investing success in short sales. A monkey cannot out perform an investment professional-the monkey doesn't know about the 10% of stocks that out performs every-time. Are emotion and reasoning connected? Also, learn what became of Einstein's brain after he died, did he use 100% of his brain? Not likely, since using 100% of our brains would likely result in seizures and hallucinations as your motor and visual...
Investors should be aware that stocks are not always normally distributed and when this fact is overlooked they may suffer from the 'regression to the mean' bias! What is a regression to the mean? When a stock price is extended either to the upside or downside, then it will usually correct toward its average price. However, there are many exceptions since above or below average performance does not always mean revert because of outlier events beyond a normal distribution. Listen in and learn...
Embrace that we think at multiple levels, not just fast and slow. Our thought process is constructed in 3 levels, due to the complexity of our brains. The first level is instinct, which is our emotional response, the second level is intuition, a learned response or skill, and the third level is reasoning, which is your conscious mind involved in complex thought. Be disciplined in your investment decision making while playing the long game. A loss is felt more keenly than a win, and there...
Illusions of control or illusion of invulnerability bias, is in response to the complications of the world and your brain. We think we have everything worked out and are overly confident which can lead to disaster. For example, when an investor or a manager is on a winning streak for a while they will tend to think that the success is an outcrop of their brilliance and any move they make will be successful and they don't consider their process. The subcortical area of the brain, specifically...