1) Turn off the financial noise machine. Information overload is the norm in today’s world. We demand it. We expect it. Your mind, my mind, and all of our minds are wired to digest information, emotionally respond to the information, and then to do something as a result. This is why and how advertising works. [...]
The most interesting research project I worked on in graduate school was a study of statistical inefficiencies in sports gambling markets. My small team of fellow classmates hypothesized on all kinds of possible anomalies in sports. Was the over/under line inefficient when high scoring NBA or NFL teams were competing? Were teams coming off a [...]
On a recent visit to the Museum of Modern Art (MoMA), I surprisingly stumbled upon an exhibit featuring classic video games such as Tetris, Asteroids, and Pac-Man. The games were displayed on active video screens with an adjacent explanation of the creativeness or design elegance for why they were each chosen. In their heyday, these [...]
The following is an excerpt from the quarterly letter we recently sent to clients on the lure of investment prediction. Rock-paper-scissors ranks somewhere near the top of a list of universally known childhood games. The game separates itself from games of pure chance like coin flipping or the card game war in that participants can gain an [...]
One of the most common questions facing families and individuals is whether to accelerate mortgage payments and forego the potential mortgage interest deduction or borrow as much as possible, make minimum debt payments, and save for retirement. Simply, is it better to save or pay off debt? The question comes in a variety of flavors: [...]
The following is an excerpt from the letter we wrote to clients this month. It offers a useful lesson in the behavioral tendencies of humans. Many Americans tuned in to watch the World Cup during the past month. Some even learned player names and now better understand the game’s subtleties. From this experience, it likely became [...]
The following is an excerpt from the letter we wrote to clients in July 2013 and provides a worthy lesson in behavioral investment. Peter Bernstein in Against the Gods states that the evidence of investor behavior “reveals repeated patterns of irrationality, inconsistency, and incompetence in the ways [they] arrive at decisions and choices when faced with uncertainty.” [...]
