tag:blogger.com,1999:blog-7366878066073177705.post3577293506286826637..comments2024-02-09T18:16:45.614+00:00Comments on The Psy-Fi Blog: A Keynesian Theory of Mindtimarrhttp://www.blogger.com/profile/06254802085744425067noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-7366878066073177705.post-13007439952376726932011-03-08T00:38:23.189+00:002011-03-08T00:38:23.189+00:00Theory of mind is a very old and very well develop...Theory of mind is a very old and very well developed topic in psychology and neuroscience. In fact there are two known neural networks in the brain - one you use when you can physically see the person and one you use when you interpret through symbols - as we do with investing and trading decisions. <br /><br />The latest neuroscience work show that traders who use ToM are better tape readers... and that study was done at Cal-Tech. <br /><br />Keynes was right - in the end all you want is for someone else to value an asset at a higher price. To best judge that, it helps to think of it directly as opposed to indirectly. <br /><br />Denise Shull <br />The ReThink Group<br />TraderPsychesDenise Shullhttp://traderpsyches.com/noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-920246977416474222010-10-22T01:40:16.380+01:002010-10-22T01:40:16.380+01:00Bonjour,
Vous trouverez ci joint l'...Bonjour,<br /> Vous trouverez ci joint l'adresse de mon Blog ( fermaton.over-blog.com).<br /><br /> C'est une théorie mathématique de la conscience reliant très bien Art-Sciences-Mathématique.<br /><br /> Cordialement<br /><br /> Dr Clovis Simardfermaton le code d'einsteinhttp://fermaton.over-blog.comnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-31168299527690403742010-09-19T12:19:41.280+01:002010-09-19T12:19:41.280+01:00Keynes lost all his money trading because he sucke...Keynes lost all his money trading because he sucked at trading. His Daddy bailed him out.<br /><br />He then took out his inferiority complex of losing all his money by trading by creating an entire economic theory where the other traders were not as smart as he was.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-65073364516654591872010-09-16T15:25:08.681+01:002010-09-16T15:25:08.681+01:00This is just great. I am a college student taking ...This is just great. I am a college student taking up Economics and this article and the comments just cleared me on some issues regarding Keynesian Theory of Mind. My other concern is regarding the Keynesian Model of Unemployment and Growth. Can somebody enlighten me about this one? Thanks!Kristinehttp://www.tradestocksamerica.comnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-47853300373148084402010-09-10T02:45:42.069+01:002010-09-10T02:45:42.069+01:00In the short run, the market is a voting machine. ...In the short run, the market is a voting machine. In the long run, it is a weighing machine.<br /><br />If it is possible to use financial statements to predict (at least on a statistical basis) the future performance of a company, then it is not necessary to judge shifts in the mood of the crowd - eventually the evidence will be plain for all to see.Unknownhttps://www.blogger.com/profile/11394409575254934751noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-50641361579909451132010-09-04T11:47:58.634+01:002010-09-04T11:47:58.634+01:00It's clear reading Buffett's biography The...It's clear reading Buffett's biography The Snowball that the man is at least Aspergic, if not a high functioning autistic.<br /><br />People wanting to copy Buffett will have to add that mental condition to 'am I a genius?' and 'was I born before stocks became sexy?' when asking searching questions of their chances of success.Monevatorhttp://monevator.comnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-87044194468864162652010-09-04T02:53:07.213+01:002010-09-04T02:53:07.213+01:00It took me 5-10 years to train myself to ignore my...It took me 5-10 years to train myself to ignore my emotions and the opinions of others. Then I created my rules to make sure I did not act out of those opinion influencers. <br /><br />It has helped make me a good value investor.David Merkelhttps://www.blogger.com/profile/05073877918072914309noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-50866617602122469022010-09-02T21:30:25.634+01:002010-09-02T21:30:25.634+01:00Interpreting "animal spirits" seems to b...Interpreting "animal spirits" seems to be an old chestnut. Richard Posner makes the same point in his <a href="http://www.tnr.com/article/books/shorting-reason" rel="nofollow">review</a> of Akerlof and Shiller's book of that title.mchlnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-24860207530309122312010-09-01T21:49:01.206+01:002010-09-01T21:49:01.206+01:00I think it’s possible to make a case that Keynes w...I think it’s possible to make a case that Keynes was arguing against value investing even while practicing it: the man was a mass of contradictions. But really the article's about Theory of Mind as applied to investing, not Keynesianism or Keynes' own investing approach: I was using Keynes's description of the mental processes behind speculation to segue from psychology to investing.<br /><br />However, the trajectory of Keynes’ own investment philosophy is worthy of an article in its own right. He started out as a pure animal spirits investor engaging in currency speculation during the initial breakdown of the Gold Standard in the early twenties and promptly went bust. He then moved onto something called the “credit theory of investment” which supposedly allowed the smart investor to swap between treasuries, cash and stocks based on a bunch of forward economic indicators: in essence an economist’s version of a beauty contest. Like so many other investors he learned the hard way that this didn’t work in ’29. Only after this did his investing style move radically towards value investing. <br /><br />As DIY Investor states, about Keynes' comments on animal spirits investing: <i>“He was actually saying that this behavior is what is wrong with investment markets - investors do not look at the long run in making decisions."</i><br /><br />That’s true, but he was also, simultaneously, making the argument that if everyone does this – and relies purely on a “mathematical expectation” – then markets will fail for want of animal spirits. Speculation and enterprise are tangled together in a deathly embrace and it’s this that leads to boom and bust. <br /><br />DIY Investor also, correctly, states: <i>“Actually Keynes didn't "propose" the beauty contest as an investment approach. He was describing how investors act.”</i><br /><br />Fair point: I’ve changed “proposed” to “described”. The remainder of the article, warts and all, will have to stay as a monument to my lack of tact :)timarrhttps://www.blogger.com/profile/06254802085744425067noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-59796447297088874922010-09-01T20:22:28.862+01:002010-09-01T20:22:28.862+01:00Michael Burry is an example of someone with Asperg...Michael Burry is an example of someone with Aspergers who has been wildly successful as a value investor. In fact, you can make the case that his Aspergers has been one of the main factors behind his success. How? For starters, it allows him to ignore the crowd, form his own opinions, and swim against the tide, which is crucial for any value investor. (This is a way in which poor theory of mind is helpful, not damaging). He was one of just a handful of managers who saw the housing bust coming and had the stones to bet big against it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-2724169467096187622010-09-01T16:48:17.981+01:002010-09-01T16:48:17.981+01:00"Of course, your own beliefs need to be infor..."Of course, your own beliefs need to be informed by analysis and infused with intelligence, but quite how you can both do that and function normally in polite society is beyond me." Really ? How sad. Me, I sometimes use a little thing called Tact.<br /><br />Seriously, if you'd have included the truly hard part in value investing - expressing your opinion, and sticking to it despite the day-to-day market ruckus, the unhappy statement I chose to call out would be harder to disagree with. Value investment makes stop-loss implementation problematic.Fitzhttps://www.blogger.com/profile/09041853209874378264noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-55747057727747913812010-09-01T15:45:46.358+01:002010-09-01T15:45:46.358+01:00I think that DIY is right to say you have misread ...I think that DIY is right to say you have misread Keynes, who was himself arguably the most successful value investor in history, one whom Buffet studied and emulated.Phil Koopnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-55428237608365605982010-09-01T15:36:35.786+01:002010-09-01T15:36:35.786+01:00turning off the switch that makes us human is an i...<i>turning off the switch that makes us human is an incredibly hard thing to do.</i><br /><br />Not necessarily.<br /><br />How do free markets work? Each person makes choices that benefit the entire society, thereby creating an Invisible Hand that causes companies that do a poor job to fail and companies that do a good job to succeed.<br /><br />How did we get everyone to help out in this way? <b>By appealing to their self-interest!</b> People are incredibly responsive when you show them what is in it for them.<br /><br />So it is with investing. Show people how much sooner they can retire if they give up Buy-and-Hold investing strategies, and you get their attention. There is no one alive who does not at some level of consciousness want to become a better investor.<br /><br />This has never been tried. Not in a big way. There are niche sites where people talk about the realities. But we have never made it a society-wide thing. I am confident that, when we do, we will see that people will once again act in their own self-interest (and thereby make the entire society far richer than what it could ever have become in the Buy-and-Hold Era).<br /><br />RobRob Bennetthttp://arichlife.passionsaving.comnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-7810643629467232542010-09-01T12:52:33.008+01:002010-09-01T12:52:33.008+01:00Actually Keynes didn't "propose" the...Actually Keynes didn't "propose" the beauty contest as an investment approach. He was describing how investors act. He was actually saying that this behavior is what is wrong with investment markets - investors do not look at the long run in making decisions. <br />It was part of the reason he believed that government should be more involved with investment - something that is on the front burner today. Many economists believe that China's type of capitalism where explicit government incentives channel investment into areas productive in the long run for their economy is one reason for the continued strong growth.DIY Investorhttp://rwinvesting.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-73930285482602946242010-09-01T09:44:12.105+01:002010-09-01T09:44:12.105+01:00I think Keynes is talking about entrepreneurs rath...I think Keynes is talking about entrepreneurs rather than value investors. Enterprise wouldn't die if value investors stopped hoovering up shares in cheap companies, but it would if entrepreneurs were as risk averse as value investors. <br /><br />Value investing is a lonely and self reliant activity. But I reckon it's possible to restrict your focus in terms of investing and still be outgoing in other areas of life. Hence Graham, Buffett et al. were/are educators as well as investors and sought/seek a public profile. Michael Burry, who famously invented the Big Short on CDSs, has Aspergers, but I don't think it's necessary!Richard Beddardhttp://beddard.net/noreply@blogger.com