Emotion, neuroscience and investing: Investors as dopamine addicts
January 31, 2005
Once again we look at one of my favorite analysts and behavioral finance thinker, James Montier of Dresdner Kleinwort Wasserstein in London. James wrote a fascinating book two years ago called "Behavioural Finance: A User's Guide" and puts out ongoing research like the one we will enjoy today. Long time readers will recognize the name because I have discussed many of his ideas in my weekly letter "Thoughts From the Frontline," my book "Bull's Eye Investing" and in "Outside the Box." While the article is a little long, I think the insight you get will be able to help bring you to a new level of control over your investing and emotions (or at least your understanding).
This report by James explores how are hard-wired brain affects investing. Emotional decision-making, dopamine, herding and self-control all play a part when are brains are trying to make decisions and James will help you think "Outside the Box." (Footnotes are at the end of the article.)
Complacency, elections and year-end rallies
December 6, 2004
Once again we look at one of my favorite analysts and behavioral finance thinker, James Montier of Dresdner Kleinwort Wasserstein in London. James wrote a fascinating book two years ago called "Behavioural Finance: A User's Guide" and puts out ongoing research like what we will enjoy today. Long time readers will recognize the name because I have discussed many of his ideas in my weekly e-letter "Thoughts From the Frontline," my book "Bull's Eye Investing" and in "John Mauldin's Outside the Box."
This report by James explores many of the global markets to determine if they are overvalued or undervalued. We get an inside look into some historical data and financial models, plus a non-US perspective on the current condition of several world markets. Enjoy this week's "Outside the Box."
Are two heads better than one?
October 11, 2004
This week's letter is from my favourite behavioural finance thinker, James Montier of Dresdner Kleinwort Wasserstein in London. James wrote a fascinating book two years ago called "Behavioural Finance: A User's Guide" and puts out ongoing research like the one we will enjoy today. Long time readers will recognise the name because I have discussed many of his ideas in my weekly letter "Thoughts From the Frontline" and my book "Bull's Eye Investing."
In the past we have looked at individual behavioural biases. This report by James explores why groups of otherwise intelligent people often make worse decisions as a group. You would think that the collective minds of a committee, sharing data and experiences, should perform better than the individual. But that is not always the case. A Camel, it is said, is a horse designed by a committee. Many of the examples will probably give you an "aha" moment, and in the end some strategies to overcome group behavioural biases are suggested. Let's see if James can make you think "Outside the Box."