PsyFi Search

Loading...

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
Rock On, January Effect Calendar effects are real, but aren't understood
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
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
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
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
T√Ętonnement, Groping for Stock Equilibrium It seems that the law of supply and demand doesn't apply to stocks
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 PortfoliosInvestors 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
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 FinanceLimit 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
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
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

Caught in a Rat Trap: Jevons' ParadoxIncreasing oil prices leads to efficiencies, which leads to more oil use
Copper at Morewellham QuayGrowth, 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 YourselfIf we don't connect with our future selves we'll have a miserable old age
Looking for a Demographic DividendStockmarket movements appear to be tied to demographics
Retirees, Procrastinate at Your PerilWe discount the future in favour of the present, and retirement planning goes out the window
Save More ... TomorrowNudge 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
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
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
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
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
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 PopularityWhy 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 MindHow a theory of mind is necessary to implement Keynesian beauty contests
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
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 MoneyNurture, not nature, explains gender specific risk tolerances
Become A Safer Investor - Get marriedUnmarried 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 WondersWilliam 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 DisorderWhy 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 ThroughMost advances are incremental, not revolutionary, look for corporations that work on this basis
Crash 2012: The Sunspots are ComingWhy economists shouldn't use analogies with physical phenomena
Dying to InvestLearn from the lessons of the past or die wondering
Eat Your StocksDoes food explain behavioral finance?
Economics & Psychology: The DivorceThe birth of economics, hedonic utility and why economists don't understand the psychology of snail eating
Economics & Psychology: ReconciliationThe 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 AccountantsFrom the birth of zero to creative accounting; how accountants rule the universe
From the Railroad to the Internet ... and Back AgainThe death of distance, or maybe not
Going Dutch, The Benefits of Sound MoneyWhy always paying your debts drives economic growth
History's Financial ShadowGeography matters for wealth, but history does too
Pulling Up the Intellectual Property LadderThe Tragedy of the Anti-Commons
Property Rights and WrongsCountry wealth depends on respect for property rights, investors take note
Revisiting VolkerChanging an inflationary psychology meant changing central bank behavior
Sir Hugh Invents the Share and Gets LostThe origin of the joint stock company and why entrepreneurs often make lousy explorers
Stuck in a Weimar WorldGerman psychology is key to understanding the Eurozone crisis
Unit Bias: Cooking, Dieting and InvestingFrom 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
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
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 GreeksCAPM, 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

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
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 ExogenousPrinting guns: disruptive technology and why you can't exclude it from economic models
Book ValueFrom Sumeria to the Kindle via Wycliffe and Gutenberg: the past and future of the book
Can Software Beat Penny-FlippersCheap computing will replace investment expertise; but it's a race to the bottom
Crowdfunding Heroic EntrepreneursSuccessful 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 EffectChange happens more slowly than you might expect, but mobile money is coming
Fall of the MachinesSoftware is a source of systemic risk for markets, but who cares?
Google Charts You Can TrustGoogle search throws up investable trends, but it won't last
Nowcasting with GoogleUsing 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
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