Daniel Kahneman: The Trouble With Confidence

Johnny HopkinsDaniel Kahneman, Investing PsychologyLeave a Comment

Here’s a great little video by Daniel Kahneman on the trouble with confidence. Kahneman makes the point that from a societal perspective confidence is generally very good, but from an individual’s point of view confidence is typically not always good. Here’s an excerpt from the video: Society rewards overconfidence. We want our leaders to be overconfident. If they told us … Read More

Howard Marks: The Pendulum of Investor Psychology

Johnny HopkinsHoward Marks, Investing PsychologyLeave a Comment

We’ve just been reading Howard Marks’ new book – Mastering The Market Cycle. In it there’s a great chapter titled – The Pendulum of Investor Psychology which discusses the impact of investor psychology on markets. Marks writes: One of the most time-honored market adages says that “markets fluctuate between greed and fear.” There’s a fundamental reason for this: it’s because … Read More

Daniel Kahneman: Investors Should Consider A “Regret Proof” Policy To Overcome Loss-Aversion

Johnny HopkinsDaniel Kahneman, Investing PsychologyLeave a Comment

Here’s a great article from Morningstar in which Daniel Kahneman provides financial advisors with advice on how to better steer clients towards their investment goals using a “regret proof” policy. The policy could also be adapted by individual investors in managing their own portfolios. Here’s an excerpt from that article: Finding out how people tick is a vital part of the … Read More

Dan Ariely: 3 Simple Tricks To Help Investors Overcome Their Internal Biases

Johnny HopkinsDan ArielyLeave a Comment

We just listened to a great podcast with Dan Ariely being interviewed by Shane Parrish at The Knowledge Project. During the interview Ariely provides investors with three tricks that can help overcome internal biases and change subconscious defaults to more of a conscious state of mind which in turn lead to better financial decisions. Here is an excerpt from that … Read More

Robert Cialdini – Just How Do Uncertain Investors Pick Their Stocks

Johnny HopkinsRobert CialdiniLeave a Comment

The simple truth is that a lot of investors don’t have the time or won’t make the time to research the companies in which they’re going to invest. So how do uncertain investors pick their stocks? One answer can be found in the book, Influence: The Psychology of Persuasion, by Robert Cialdini. Here’s an excerpt from the book: We first need to … Read More