People were skeptical of Google when it IPO’d. Amazon’s own employees didn’t think Prime would be a success. Good ideas are often only known in hindsight.
Search Results for: "behavior"
The Difference
My friends in New York love to point out there’s a difference between a slice of pizza in the Big Apple and a slice of pizza everywhere else in the world. I’ve always been of the opinion that pizza is almost always good no matter where it’s from but after sampling some pizza in New…
4 Overlooked Investment Decisions
In the hierarchy of institutional investors, pension plans get picked on the most. Endowments and foundations are the mean girls of this space, generally looking down at their pension brethren because they all assume pensions are the last to the party when it comes to innovative investment ideas. In my experience, this is often unwarranted…
What a Strange Round Trip It’s Been
Well that was pretty quick. Since peaking in late-September the S&P 500 ETF (SPY) now has a slightly positive total return, wiping out a nearly 20% loss: It’s hard to believe how quickly sentiment in the market can go from “the world is coming to an end and a recession has already started” to “everything’s…
Animal Spirits Episode 74: Footing the Bill
This week’s Animal Spirits with Michael & Ben is sponsored by YCharts: Mention Animal Spirits and receive 20% off your subscription price when you initially sign up for the service. We discuss: The dreaded yield curve inversion — useful signal or noise? Who’s smarter — the bond market or the Fed? Which generation is in more trouble financially…
Why Are IPOs Oversubscribed?
Levi Strauss created the first pair1 of blue jeans in 1873. He went to San Francisco to make his money in the gold rush but found more success using denim and rivets to make pants that would last longer. They were actually called waist overalls until 1960 when baby boomers began calling them jeans. In…
Animal Spirits Episode 73: The Expectations Gap
This week’s Animal Spirits with Michael & Ben is sponsored by YCharts: Mention Animal Spirits and receive 20% off your subscription price when you initially sign up for the service. We discuss: What Congress doesn’t understand about financial services. The college admissions bribery scandal. Does it matter where you went to college? Can tech companies solve higher education?…
The Market Won’t Provide High Returns Just Because You Need Them
The late-Peter Bernstein once wrote, “The market’s not a very accommodating machine; it won’t provide high returns just because you need them.” When you do need higher investment returns because of a perceived shortfall in assets for a specific goal you generally have 3 options to remedy the situation: (1) Adjust your expectations, and therefore,…
Talk Your Book: The Low Volatility Anomaly
Today’s Animal Spirits: Talk Your Book is presented by Invesco: We discuss: What is the low volatility anomaly? Why financial theory doesn’t always translate into the real world The three behavioral and structural reasons for the low vol anomaly How often do different factors overlap with one another? How the market environment impacts low vol…
Daniel Kahneman on Intuition
Behavioral finance is still only a few decades old at this point because the finance industry was a little late to the game in understanding that investment decisions are driven almost exclusively by human emotions and biases. Now that human psychology has grown in importance in the field, the bible to anyone serious about understanding…
