The Latticework

The Psy-Fi Blog is dedicated to discussing finance and psychology and their links with physics, history, statistics, risk management, anthropology, biology, genetics, neurology, ethics, philosophy, mathematics, technology and anything else I can think of. See Mental Models, Arrayed on Charlie Munger’s Latticework and then follow the links to start to array your mental models on a structured latticework …

LINKS TO THEMES

ON BEHAVIORAL BIAS

100 Ways To Leave Your Lucre	Sutherland’s review of 100 types of behavioral bias
Anchoring, the Mother of Behavioural Biases	How we unconciously attach ourselves to arbitrary numbers
Backfiring Investment Theories	Mere evidence isn’t enough to convince a conspiracy theorist
Bamboozled by Your Blind Spot Bias	You won’t believe you’re biased, even if everyone else is
Confirmation Bias, the Investor’s Curse	Learn to seek disconfirming evidence, however uncomfortable it may be
Disposed to Lose Money	The fundamental attribution effect, why celebrity CEO’s are dangerous and Stanley Milgram electrocuted his students
Facebook Friends Can Make You Poor	Self-enhancing transmission bias and the social intelligence hypothesis
Fooled by Fluency	Moses didn’t have an ark: Zajonic and the mere exposure effect
Herd of Investors	Investors of a feather flock together
Hindsight Bias	Everyone thinks they predicted the future in the past, and everyone’s wrong
How To Be A Bad Manager: The Pygmalion Effect	Underperformance is a self-fulfilling prophesy
Investors, You’ve Been Framed	Lakoff, Goffman and the need for investors to avoid narrow frames
Loss Aversion Affects Tiger Woods, Too	Everyone protects gains and chases losses, even golfers
Market Confidence, Tricks and Placebos	The Clever Hans Effect; how horse sense fooled scientists and why market confidence is a placebo
Mental Accounting, Not All Money is Equal	Richard Thaler, on how fungible money isn’t, sometimes, maybe
Money Illusion	Focus on what it can buy, not how much you have
Moral Hazard, But Thanks For All the Fish	Moral hazard as a behavioral bias, and why Iceland needs to catch a heck of a lot of fish
One Long Argument: A Big List of Behavioral Biases	All the biases, all in one place
Overconfidence and Over-Optimism	Investors expect to win: at least half are wrong
Parsimonious, Big Picture, Behavioral Bias	Neuroscience is beginning to piece together the way our biased brains work
Perverse Incentives are Daylight Robbery	Incentives cause behaviour, make sure they’re the right kind
Recency, Hot Hands and the Gambler’s Fallacy	Randomness doesn’t exclude consistency; consistency doesn’t prove skill
Regret	How the Disposition Effect means we hang on to losers and sell winners
Risk, Stone Age Economics and the Affect Heuristic	Why stocks with buzz are thought less risky
Risky Shifts	Group polarization rules, avoid groups
Rock On, January Effect	Calendar effects are real, but aren’t understood
Seasonally Affective Investing Disorder	Are markets influenced by the changing of the seasons?
The Halo Effect: What’s in a Company Name?	Changing a company’s name can change its stock performance
Trading on the Titanic Effect	Technology change can blind pilots and traders to risk
Twits, Butter and the Superbowl Effect	Prove anything you want: Leinweiber on death by data mining

ON BEHAVIORAL ECONOMICS

Advertising on the Handicap Principle	George Stigler on price dispersion and Amotz Zahavi on the handicap principle
Bayesian Unreason in the Modern World	Are people born Bayesian reasoners?
Be a Sceptical Economist	List and Levitt on why it pays to be sceptical about laboratory experiments and the limits of the Hawthorne Effect
Behavioral Finance’s Smoking Gun	Gerd Gigerenzer and solving the Linda problem by representing probabilities as frequencies and why this means Prospect Theory is wrong
Experience, Rare Events and Risky Choice	Prospect theory works – sometimes
Have You Been Nudged Today?	How governments are using nudge theories
MIA: The Invisible Hand	Keynes on “The End of Laissez Faire”; and why markets need not be Darwinian
Predicting Information Markets	Markets may better than politicians at making tough political decisions
Satisficing Stockpicking	Herb Simon’s satisificing and why overconfidence is a figment of experimental conditions
Soros’ Economic Reflexivity	Karl Popper, George Soros and why we don’t observe markets, we participate in them
Studying Economics Makes You Mean	Economists behave as their models predict, no one else does
Tâtonnement, Groping for Stock Equilibrium	It seems that the law of supply and demand doesn’t apply to stocks
The Emergent Rationality of Markets	With a little experience rational market behavior can emerge out of the actions of irrational people
Unpredictably Rational	Irrationally defending the assumption of rationality may be economists’ way of justifying the status quo
Utility, the Deus Ex-Machina of Economics	Daniel Bernoulli, the St. Petersburg Principle and why economists are stuck with utility, which they can’t define and don’t know how to measure

ON BEHAVIORAL INVESTING

Are Traders Dumber Than Drooling Dogs?	Pavlov’s reinforcement learning applies to investors: but bad experiences make you better if you stick at it
Behavioral Portfolios	Investors divide portfolios between downside protection and upside potential and aren’t rational at all
Bulletin Boards are Bad for Your Wealth	From group effects to simple envy, ways to make you poor
Buy and Hold, the Least Worst Option?	Investors are hopeless at market timing
Contrarianism	When the Wisdom of Crowds goes wrong: Asch’s conformity experiments
Finance: Where the Law of One Price Doesn’t Apply	How strategic price complexity makes it difficult to compare financial products
Idiot Noise Traders	As predicted, people trade on noise not information, and generate most of it themselves
Investing With a Time Machine	Using Cyclically Adjusted Price Earnings as a timing mechanism: safe or not?
Investor Decisions: Experience is Not Enough	The Allais Paradox and why it may be illusory
Investor Decisions: Experience is Still Not Enough (But It Helps A Bit)	Experienced investors trade (a bit) less
Irrational Numbers: Price Clustering and Stop Losses	How round numbers change trading patterns and why this means stop losses are dangerous
It’s How Big, Not How Often, That Counts	Winning big, not often, is the key to investing success
It’s Not Different This Time	The Lollapalooza Cascade on how banks went bad
Jam Today – Tyranny Tomorrow?	Limiting choice reduces procrastination, but at what cost?
Limit Orders, on the Crumbling Edge of Behavioral Finance	Limit orders can make investors look irrational, even when they’re not
Moats, Unbundled	Media companies are in denial
Money Matters, Your Opinion Doesn’t	Post-modernism, Sokal’s Hoax and the Cramer Bounce
No Need for a Drawdown Drama	You’ll see your portfolio drop 50% at least once in an investing lifetime
Noise, Sentiment and StockTwits	StockTwits does predict future sentiment, although it’s nothing fundamental
O Investor Why Art Thou Rational	Quantitive Behavioural Finance: fundamentalists and chartists in competition
On the Invariant Nature of Investor Ineptitude	We never learn
Profit from Self-Knowledge	Coleridge is a better investment adviser than Martha Stewart
Quality Signalling for Quality Stocks	Adverse selection, moral hazard and when a signal isn’t signalling
Save Our Short Sellers	Shorters promote efficiency and prevent bubbles forming
Seeking Alpha, Finding Omega	Professional investment funds chase returns and fail just like everyone else
Self-Organizing The Investment Blogosphere	How to invest in the modern world
Technical Analysis on Display	Human visual analysis of trading patterns may tap neural abilities that aren’t yet fully understood
The 160 Billion Dollar Bezzle	Overtrading costs – lots
The Proper Etiquette for Market Panics	Don’t eat soup with a fish knife: social proof and market manias
Trimmed By The Hedge Funds	Secrecy is critical to hedge funds, but at what cost?
Unfriend Those IPOs	Investors love glittery things, like IPOs. Beware
Unrealistic Optimism and the Impoverished Investor	Hyperbolic discounting rules, eventually.
What’s YOUR Competitive Advantage?	Private investors can’t beat institutions at their own game, so why do they persist in trying?
Why There’s Never Been A More Dangerous Time To Invest	Just because it’s easy to invest doesn’t mean investing is easy
Your 6% Self_Inflicted Trading Tax	Most of us start each year 6% down

ON COMMODITIES, BONDS AND ALTERNATIVE INVESTMENTS

A Bias For Real Estate	Mimetics and herding behavior in real-estate investors
Caught in a Rat Trap: Jevons’ Paradox	Increasing oil prices leads to efficiencies, which leads to more oil use
Copper at Morewellham Quay	Growth, decline and the importance of copper
Dear Auntie, Why Are My Bonds Bubbling?	Safety doesn’t necessarily make for a good investment
Economic Value in Aitch-Two-Oh	The economics of water and why not everything can be measured easily by money
Gold!	Is gold a proper investment?
Hedge Funds Ate My Shorts	How hedge funds became uncool
Peak Oil, the Revenge of Planet Earth	The end of oil is in sight, but is anybody ready?
Salience is Golden	Gold doesn’t always glitter, but we’re usually not aware of that
Spamonomics	Spammers obey economics as well, and they trap unwary investors all too often

ON CORPORATE IRRATIONALITY

Buyback Brouhaha	Companies buy back stock when they shouldn’t and don’t when they should
CEO Pay: Because They’re Worth It?	Deference to authority, the Miligram experiment and how aligning executive rewards with stock performance is peverse
Euphemisms for Morally Disengaged Managers	Bandura’s moral disengagement, deferral to authority and why good behavior comes from the top
Greed’s Not Good for Shareholders	Short-term profit maximisation is a long-term ticket to failure
Inside Trading – the Director’s Cut	How insider trading laws make markets even more irrational
Mayhem with M and A	Merger success is dependent on the 52-week effect and other behavioural flaws
Moral Corporations: An Oxymoron?	Tenbrunsel on self deception and why Friedman’s profit maximising corporations end up behaving unethically
The Psychology of Dividends	Why Miller-Modigliani was wrong and investor psychology makes corporations pay dividends, whether they should or not
When Incentives Go Bad	Incentivizing managers to align them with shareholders is a really bad idea, if you’re a shareholder

ON DEMOGRAPHICS AND RETIREMENT

A Yen For Yield	Markets will recover: by 2027, in the meantime look for yield
A Yen For Yield Redux	The future is uncertainty, so look for surety in stocks
Be Kind To An Old Person, Start With Yourself	If we don’t connect with our future selves we’ll have a miserable old age
Looking for a Demographic Dividend	Stockmarket movements appear to be tied to demographics
Retirees, Procrastinate at Your Peril	We discount the future in favour of the present, and retirement planning goes out the window
Save More … Tomorrow	Nudge techniques for retirement saving and the consequences for freedom
The End of the Age of Retirement	Demographic trends suggest we’ll all have to delay retirement
The Secret of a Healthy, Wealthy Life	Self-control is the key, and you can tell who has it at 3 years old

ON ECONOMICS, STATISTICS AND UNCERTAINTY

Akerloff’s Lemons: Risk Asymmetry Dangers for Investors	George Akerlof’s Risk Asymmetry; or why not to buy a used car
Ambiguity Aversion: Investing Under Conditions of Uncertainty	Frank Knight’s Uncertainty and Daniel Ellsberg’s Ambiguity Paradox
Benford’s Law: Are US Stocks and Euro States Fiddling Their Books?	If you want to cook the books don’t rely on a human to generate random numbers
Cardano’s Gambit	Girolama Cardano, medieval mathematican, and the problem of probability representation
Complexity in Financial Systems	Markets as complex adaptive systems and the Theory of Rational Ignorance
Exit the Walrus, Followed by Equilibrium	Leon Walras and how not to apply science to economics
Forensic Finance, Benford’s Way	Benford’s Law: why numbers starting with 1 are most common in economics and how this helps catch fraudulent corporations
Gambling, From Iowa to Soochow	From phantom limbs to the Somatic Marker Hypothesis and The Soochow Gambling Task
Games People Play	From Pliny to Nash via Von Neumann
Laplace’s Hammer: the End of Economics	Simon-Pierre Laplace, observer bias and the failure of economic determinism
Mandelbrot’s Mad Markets	Benoit Mandelbrot and why Gaussian models of economics are wrong
Markowitz’s Portfolio Theory and the Efficient Frontier	Harry Markowitz, portfolio design and why risk is not always volatility
Monty Hall Economics	Three doors, one decision and why behavior isn’t Bayesian
The Tragedy of the Financial Commons	Hardin’s Tragedy of the Commons writ large with everyone’s financial future
Time for Shiva and Schumpeter	Why Schumpeter’s creative-destructionism could do with an outing

ON ECONOSCIENCE

Adam Smith’s Monkey Business	From moral sympathy to monkey mirror neurons
Altruism: Signalling Corporate Fitness	Kin selection, culture, reciprocation and the Prisoner’s Dilemma
Are You A Born Investor?	How genes explain the stockmarket participation puzzle
Bacteria, Boids and Market Instability	Investors as bacteria and how phase transitions may model market breaks
Capitalism Evolving: Be a Cockroach, Not a Dinosaur	The Adaptive Markets Hypothesis and cyclically adjusted PERs
Craving a High: Trading on Dopamine	Dopamine can predict your trading style
Cyclical Growth, Form and Fibonacci	From Fibonacci to D’Arcy Thompson and the historical nature of spurious stockmarket cycles
Darwin’s Stockmarkets	Natural selection and contingency at work in stockmarkets
Deep Time and the Fallacy of Frequency	Why our lack of self control means we see patterns where there aren’t any
Econophysics, Conciousness and Cosmic Karma	Physics in economics, from Bachelier to modern econophysics
Investing at the Edge of Reality	The double-slit experiment and why we’re not designed to invest in conditions of certainty
Investing by Jerks	Punctuated equilibrium and mass extinction in markets
Maxwell’s Demon Investor	Why entropy means markets are unpredictable
Memes, Money, Madness	Why Dawkin’s memes are good ideas but bad investment tools
Newton’s Financial Crisis: the Limits of Quantification	From Isaac Newton to the problems with modern quantitative financial models
Physics Risk Isn’t Market Uncertainty	The uses and limits of financial modelling and why CEO’s need maths degrees
Perpetual Novelty, Santa Fe Style	When the physicists told the economists to get real
Quantum Conciousness is Market Uncertainty	Reality’s an illusion, economics doubly so
Sexual Trading	Six degrees of separation and how epidemiology helps model contagion in financial markets
Science, Stocks and Superstition	Most of us are superstitious and most don’t understand science: why should markets ever behave rationally?
Stocks Aren’t Snakes	How our reptile brains make unnecessary time critical decisions
The Neuroeconomics Revolution	How lizards are better investors than humans: probably
Trading at the Speed of Light	Special relativity and high-frequency trading
Whither Forecasting? The Butterfly Stirs	Chaos Theory and why financial forecasting is a triumph of hope over experience

ON FINANCIAL EDUCATION

Financial Education Doesn’t Work	Education doesn’t seem to improve financial literacy
Freedom of Financial Choice is a Myth	Financial Education worsens people’s financial decision making
The Tyranny of Numeracy	Investing is about more than simple numeracy

ON FINANCIAL MORALITY AND DEMOCRACY

A Lollapalooza Effect – Capitalism and The Death of Wang Yue	What the death of a Chinese child can tell us about capitalism and human nature
Bad Habits: The Greenspan Put	Markets rule and it’s not OK, not OK at all
Ending the Divine Right of Bankers	Bankers aren’t kings and Thomas Jefferson was right (as usual)
Greece, Catharsis and the ECB Moneylenders	The Euro money-go-round is morally and financially bankrupt
Foresaken Liberty, A Behavioral Legacy?	Foresaken-Liberty Syndrome – is government use of behavioral techniques infringing personal freedoms?
How Sneaky Governments Steal Your Money	Financial repression, twenty-first century style
Ideology, Paving the Road to Financial Ruin	How neoliberalism overreached itself
Is Your CEO A Psychopath	Psychopathic executives are on rise, no surprise that corporate morality isn’t
On the Corrosion of Moral Leadership	Most corporate scandals start from the top, even without a smoking gun
Manifesto for a Low-Growth World	Growth may not return quickly, so may be happiness is a better choice
Screwed: Fictional Profits, False Accounting and Financialization	The accountants shall inherit the Earth. Heaven help us
Shareholders Are Revolting	Shareholder democracy is on the march
Socialism on Wall Street	Occupy is not UnAmerican, and Marx wasn’t a socialist
Stuxnetting the Eurozone’s Trust	Differing cultural attitudes to corruption and trust are deep-seated and dangerous
Tax Notes To An Unborn Grandchild	Intergenerational fairness is not on our agenda

ON FORECASTING AND ADVISORS

Clueless: Meet the Overprecise Pundits	We like precision, but too much is bad for us
Disclosure Won’t Stop a Conflicted Advisor	Disclosure as a perverse incentive
Forecasting a Financial Earthquake	We can’t predict earthquakes, what chance markets?
Investment Analysts, Sunk by Deepwater Horizon	Behavioral analysis showed BP was an accident waiting to happen, and why investment analysts had no idea
Investment Forecasts: Known Unknowns	Investing lessons from Socrates, Donald Rumsfeld and Alfred Cowles
James Randi and the Seer-Sucker Illusion	Forecasting is about luck, not skill
Minding the Chastity Belts: Fiduciary Duties and 900 Pound Lemmings	Don’t trust advisors who don’t meet fiduciary standards, or who don’t believe in psychology
Sharpshooting the Investment Gurus	Most gurus and commentators paint targets after they’ve finished shooting
You Can’t Trust the Experts with Your Investments	Tetlock on why the experts we should trust are the ones we ignore
What’s the Shape of Your Recession?	How to choose an investment expert
Why Markets Crash	Traders didn’t forsee the Wall Street Crash or either World War: history only looks inevitable with hindsight

ON FUNDS AND INVESTING

Are IPO’s Bitter Lemons?	Explaining the IPO first day pop: the winners curse, or the corruption hypothesis?
Arnott: 40 Years of Bonds Beating Equities	The equity-risk premium is much lower than we think
Debt Matters	Why large amounts of debt doesn’t work for investors or companies
Diworsification is Good For You	Why 15 stocks, or 50, isn’t enough to diversify away risk
Do Behavioural Funds Work?	Funds investing on behavioural principles have a lot to prove
Investing in the Rear View Mirror	We can’t rely on the past to predict the details of the future
It’s OK to Lose Money	Anchoring and the problems of DCF analysis
Lifestyle: Are You a Stock or a Bond?	How lifestyle funds interact with human capital
Momentum Trading Madness	Why momentum can’t work as a trading strategy – eventually
Real Fortune Telling: Dividend Forecast Indexing	Forecasting using dividends rather than earnings is more accurate where insider trading laws are more stringent
Risk := ON	Earnings levels are high: mean reversion awaits
Survivorship Bias in Magical Mutual Funds	How mutual fund groups exploit survivorship bias to improve their historical returns
Technical Analysis, Killed by Popularity	Why technical analysis shouldn’t work, on Heisenberg’s Investment Principle
The Case Against Re-Emerging Markets	The risks of emerging markets where boom often predicts bust
The Case of the Delusional Investor	Sherlock Holmes on investor madness
The Lottery of Stockpicking	Why we buy insurance and lottery tickets under the Illusion of Control
The Special Theory of Behavioural Finance	Behavioural bias affects markets all the time, but mostly we can’t tell
The Small Cap Trap	Why regulatory arbitrage makes small cap stocks peculiarly tricky for investors

ON INVESTMENT GURUS

A Keynesian Theory of Mind	How a theory of mind is necessary to implement Keynesian beauty contests
Invert, Always Invert	Munger’s Mantra
Investing Like Berkshire Hathaway	The four point investing checklist
Jack Bogle and the Bogleheads	Jack Bogle and the arguments for standard market cap weighted index trackers
John Kay’s Obliquity	How achieving direct goals is often best done by indirect methods
Keynesian Investing: Changing Facts, Changing Minds	How Keynes became a successful investor
Of Mice and Templeton Moments	How mice show us the way to invest at the Templeton Moment
One Price To Rule Them All	Emanuel Derman on market modelling and misbehavior
Robert Cialdini and the Weapons of Influence	How we’re persuaded to do stuff we don’t want to, aided and abetted by our own minds
The Anatomy of a Growth Investor	Philip Fisher, scuttlebutt and long-term lessons for investors from the front-line
The Buffett Munger Paradox	Marrying Munger’s latticework of mental models and Buffett’s incredible focus
The Unintelligent Investor	Even the greatest investors get caught out sometimes
Warren Buffett Bias	How following Warren Buffett’s advice is a one way ticket to the poor house

ON GENDER AND INVESTING

A Woman’s Place is in the Money	Nurture, not nature, explains gender specific risk tolerances
Become A Safer Investor – Get married	Unmarried men make worse fund managers
Investors Embrace Your Feminine Side	Women take less risks, but this may not be because of gender
Sexism and the City	Stereotyping begets sexism but women are less volatile

ON INDEXING

Don’t Give Index Trackers the Bird	Index trackers may be the least worst option for most investors
Exotic ETFs are Toxic ETFs	When anyone can make up indexes to track against the trackers are meaningless
Fundamental Indexing Can’t Save You From Aliens	Index trackers gravitate to hot stocks, fundamental trackers don’t, but bring their own risks
Hubble, Bubble,Index Trouble	Market cap index trackers may be a trap for the unwary: i.e. most index tracking investors
Index Tracking at the Omega Point	For the long-term investor there’s only one point that matters: the time at which we need to start living off our portfolios
The Wrong Way To Use An Index Tracker	Timing using index trackers is just as irrational

ON INVESTING HISTORY

An Age of Miracles and Wonders	William Bernstein on the Birth of Plenty
Behavioral Anti-Trust: Microsoft to Apple	Why most new market entrants fail and why anti-trust law assumes that everyday corporate behavior is impossible
Behavioral Law and Disorder	Why judges shouldn’t interfere with investing decisions
Capitalism Rising, the Lessons of Lepanto	Capitalism is the worst system, apart from all the others
Copernicus, Muddling Through	Most advances are incremental, not revolutionary, look for corporations that work on this basis
Crash 2012: The Sunspots are Coming	Why economists shouldn’t use analogies with physical phenomena
Dying to Invest	Learn from the lessons of the past or die wondering
Eat Your Stocks	Does food explain behavioral finance?
Economics & Psychology: The Divorce	The birth of economics, hedonic utility and why economists don’t understand the psychology of snail eating
Economics & Psychology: Reconciliation	The madness of utility and why economics got the trembles and had to let psychology back in
Frankenstein’s Corporations	How the Supreme Court created artificial and immortal life, and why we’re all paying for it
In the Beginning Were the Accountants	From the birth of zero to creative accounting; how accountants rule the universe
From the Railroad to the Internet … and Back Again	The death of distance, or maybe not
Going Dutch, The Benefits of Sound Money	Why always paying your debts drives economic growth
History’s Financial Shadow	Geography matters for wealth, but history does too
Pulling Up the Intellectual Property Ladder	The Tragedy of the Anti-Commons
Property Rights and Wrongs	Country wealth depends on respect for property rights, investors take note
Revisiting Volker	Changing an inflationary psychology meant changing central bank behavior
Sir Hugh Invents the Share and Gets Lost	The origin of the joint stock company and why entrepreneurs often make lousy explorers
Stuck in a Weimar World	German psychology is key to understanding the Eurozone crisis
The Zeitgeist Investor: Wheels, Arrows and Buggy Whips	If you focus on fundamentals and ignore the bigger picture you’ll end up invested in the best buggy whip manufacturer
Unit Bias: Cooking, Dieting and Investing	From food to finance, via Darwin and roast hogs

ON INVESTING PSYCHOLOGY AND EMOTION

A Tall Tale of Risk Aversion	Tall people are less risk averse: why?
Arbitraging Embeddedness	Mark Granovetter and how being embedded in social networks causes the appearance of mass trading insanity
Bad Press: The Sad Demise of Financial Journalist	What’s wrong with the financial press
Born Rich, Born Greedy	Wealth corrupts, but why?
B.F. Skinner’s Stockmarket Slot Machines	How operant conditioning of investors leads to market breaks
Bah Humbug … The Value of a Child’s Gift	It really is the thought that counts
Depressed Investors Don’t Need Feedback, Everyone Else Does	Rapid feedback makes better investors
Dirty Money: There IS Accounting for Taste	Moral Accounting: how we spend it depends on how we earn it
Don’t Lose Money in the Stupid Corner	The Dunning-Kruger Effect: stupid and don’t know it?
Dread Risk: Investing Outside the Goldfish Bowl	Slovic on risk perception: dread and uncertainty in markets
Fairy Tales for Investors	Why narratives trump numbers, but shouldn’t
Financial Lessons in Mass Deception	As Paul Ekman shows, we all lie and we can’t tell
Financial Memory Syndrome	Loftus on fake memories; we can’t trust it, especially with our financial futures
Gaming the System	Dan Airely on how we all cheat, if we can
Get an Emotional Margin of Safety	Antonio Damasio: emotionless people make better investors and poor drivers
Get Rich, Flee Temptation	Temptation is endemic; consumers need help with their self-control
Happy People Make Terrible Traders	If you’re happy you’re optimistic, and that’s depressing
In Markets Bad Stuff Happens – Frequently	Just not frequently enough for people to learn the proper lessons
Intelligence Can Seriously Damage Your Wealth	Dumb investors do badly, but better than smart ones
Love Your Kids, Not Your Stocks	Love stuck investors lose money, confusing stocks with their kids
Mindless With Money	How the Illusion of Control promotes mindless investing
Panic!	Kindleberger, the fallacy of composition and the regularity of Minsky Moments
Puke: Don’t Invest in the Familiar	Sauce-Bearnaise Syndrome; or why personal experience is a rubbish investment technique
Putting Down the Credit Cards	On anchoring, hyperbolic discounting and a total lack of self control
Risk, Reality and Richard Feynman	How risk and reality get separated and what happens when they get back together
The Curse of Seven	Information overload: more is not necessarily better
The Language of Lucre	Discourse analysis, the familiarity effect and how news makes us trade
The Media, Fear and Stockmarket Manias	How the media’s attraction to extreme events causes investors to react inappropriately
The Psychology of Scams	Some people are natural born victims
Triumph of the Pessimists	Being pessimistic about markets is the sensible approach, always
Trust is in the Eye of the Beholder	Internet lenders can accurately assess trustworthiness from photos
Unemotional Investing is Best	Emotionally braindamaged people make better judgement calls on money
What’s Your Financial IQ?	Frederick’s Cognitive Reflection Test, problems with IQ and an issue for Prospect Theory
When a Dollar’s Not Just a Dollar	Sod economics, rely on reciprocity
Your Financial Horoscope	Cargo cults, supersitition and the Barnum Effect
Zombies in the City of London	Pay attention! The Incomplete Revelations Hypothesis

ON MACROECONOMICS

Basel, Faulty?	The fire-sale externality and the credit crunch externality and why we need to prevent them
Blood on the Street	If something can’t go on forever it will stop: the limits of quantitative easing
Breaking the Guild of Macroeconomics	Why medieval doctors didn’t cure anyone and why bloggers may be the future of macroeconomics
Europe, Taxed by Tobin	Tobin Taxes don’t curb speculation, they just move it
Fear and Loathing in the Eurozone	Fixed or Floating? The biploar Optimal Currency Theory
Game On: Basel III	Banks will game Basel III, regulators need to stop them
Losing the Lender of Last Resort	It’s a capital mistake to assume government bonds are risk free, but that’s what many financial models and investors do
Regulatory Omniscience is A Fictional Conceit	Regulators are biased, too
Religion in EconoLand	The bizarre behavior of the economic priesthood
Springing the Liquidity Trap	Liquidity – or the lack of it – is the key to most financial crises
The Business of Capital is Bust	Investment banking exports its own instability to the rest of industry, with predictably dire results
To Predict the Next Bust Ask An Austrian	Austrian economists predicted the last bust and reckon procyclicality is setting us up for an even bigger one
Totally Addicted To Debt	Banks are junkies, they need cold turkey
Weightless Economies	Manufacturing isn’t necessary for a modern economy but information is power

ON MATHEMATICAL MODELLING AND RISK

Alpha and Beta: Beware Gift Bearing Greeks	CAPM, the Capital Asset Pricing Model, and its illogical conclusions
Black Swan Down	Montier’s White Swans and the Crash of ’87
Black Swans, Tsuanmis and Cardiac Arrrests	Taleb, Posner and disaster myopia
Correlation is Not Causality (and is often Spurious)	Hidden third variables and the dangers of using historical data to prove anything
Holes in Black-Scholes	The dangers of tail-end events for option pricing models and the opposing conclusions of longshot-favorite bias
Metaphors of Mind and Money	Why economists model finance on the latest big idea, whatever it is
Monte Carlo Simulation or Nuclear Bust	OK for modelling thermonuclear reactions, less safe on stockmarket returns
Pacal’s Wager – For Richer, For Poorer	Eternal damnation and retirement poverty aren’t worth the risk of extreme gambles
Quibbles with Quants	Quantitative analysis doesn’t handle human irrationality
Regression to the Mean: Of Nazis and Investment Analysts	How Francis Galton discovered mean regression, misinterpeted its meaning and bequeathed a legacy for analysts
Risky Bankers Need Swiss Cheese Not VaR	How VaR models got gamed and risk management is about looking for risks, not thinking you’ve conquered them
The Death of Homo Economicus	Tversky and Kahnemann’s Prospect Theory and how John List’s experiments raise doubts about it
To Boldly Go: Risk and the Primer Directive	Priming makes investment professionals take more risk
When Muddled Modellers Model a Muddle	Derman on Model Risk; more on the perverse nature of badly designed incentives

ON PRICING ANOMALIES

Birds, Bees and Decoy Effects	Adding a third, useless, price option causes people to make more expensive choices
Death of the Accrual Anomaly	Why accruals aren’t cashflow but the investment opportunity’s vanished
Do Stocks Always Outperform (in the Long Run)	The equity-risk premium: fact or fiction?
Exploiting the Anomalies	From data snooping to trouncing the market through anomalies
Losing Momentum: Is It Time To Exploit Mean Reversion?	The momentum effect seems to be disappearing
Pricing Anomalies: Now You See Me, Now You Don’t	The mystery of the disappearing anomalies
Volatility, the Last Anomaly	Volatility shouldn’t happen, but does rather too much: thirteen times too much

ON SELF-INTEREST, HAPPINESS AND ANTHROPOLOGY

de Tocqueville: Trust in Self-Interest	Social capital and why self-interest and trust are implacibly linked
Economic Parasites	Poor nations aren’t full of stupid people, they’re full of parasites
Gross National Happiness	The Greater Happiness Principle, revealed preference theory, the Easterlin Paradox and how income differences reduce happiness and cause financial crises
Is Self-Interest Self Fulfilling?	Thomas Kuhn and why social science theories may be self fulfilling
Money Can’t Buy Happiness	People behave better if money isn’t an incentive: sometimes
On Incentives, Agency and Aqueducts	Agency Theory, self-interest, the perverse reactions of quarterbacks and the hope of social identity
Repellent; The Magical Law of Attraction	Barbara Ehrenreich on why positivity is positively negative
Weird Markets	Analysing market behavior by studying university students is unrepresentative; and what anthropology can teach economics

ON TECHNOLOGY AND THE FUTURE

3D Printing is not Exogenous	Printing guns: disruptive technology and why you can’t exclude it from economic models
Book Value	From Sumeria to the Kindle via Wycliffe and Gutenberg: the past and future of the book
Can Software Beat Penny-Flippers	Cheap computing will replace investment expertise; but it’s a race to the bottom
Crowdfunding Heroic Entrepreneurs	Successful crowdfunding depends on entrepreneurial vision: don’t hold your breath
Dark Pools and Adverse Selection	Trading stocks off-market in dark pools exposes investors to adverse selection through information leakage
Disruption By Digital Wallet: The Sailing Ship Effect	Change happens more slowly than you might expect, but mobile money is coming
Fall of the Machines	Software is a source of systemic risk for markets, but who cares?
Google Charts You Can Trust	Google search throws up investable trends, but it won’t last
Knight, Knight, Automated Trading Dreams	I told you so.
Nowcasting with Google	Using Google to forecast what’s happening now
Reality 2.0 – Interactive Porn and Crumbling Moats	From ancient music to social networking and the threat to established businesses
Rise of the Machines	High frequency trading creates an unlevel playing field, and subverts the purpose of stock ownership
Stand and Deliver, Cashtags and Highwaymen	High frequency trading creates an unlevel playing field, and subverts the purpose of stock ownershipInvesting requires structured information, not social network relationships
The End of Finance, As We Know It	Automated broking is coming
The Malthusian Prophesy	Is Thomas Malthus’ prophesy of an end to growth now inevitable?
The Wisdom of Internet Crowds	Google search volume can predict corporate earnings
Why the Growth of India and China Means Our Kids Should Do Media Studies	The globe is shrinking, but home is safest

ON VALUE INVESTING

Angels, Pinheads, Capital Gains and Dividends	From the Middle Ages to today, don’t waste time on pointless arguments a
Dividends Keep Your Anchored	For fundamental investing there’s nothing better than a dividend to keep your valuations straight
Don’t Overpay for Growth	Clairvoyant value: growth stocks outperform but we habitually pay too much for them
In Value, Risk is Not Reward	Volatility isn’t risk, value stocks aren’t always risky and stock returns aren’t normal
Is Intrinsic Value Real?	Buffett and Graham style investing requires the ability to identify moated businesses with long-term prospects
Value in Mean Reversion	The Thaler-DeBondt Hypothesis: the first shall be last and the last shall be first

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The Latticework