General Gonad said:
GG,
The more you post on this subject, the more you sound defensive and the more you sound like a phony wannabe intellectual. A man got to know his limitations. Stick to lecturing others on how to treat sps better
!
Investment Tips Anyone?
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GG,
The more you post on this subject, the more you sound defensive and the more you sound like a phony wannabe intellectual. A man got to know his limitations. Stick to lecturing others on how to treat sps better
!Thanks for the advice, I will ignore you from now on since you obviously don't have a clue of what you're talking about. BTW, I have no aspirations of being an intellectual, precisely because most of them are phony hypocrites. Learn a little more about Daniel Kahneman, Amos Tversky and behavioral finance:
Behavioral Finance, with its roots in the Psychological Study of Human Decision Making, documents how and why most investment managers:
- are more confident than they should be in their forecasting ability
- do not process information efficiently
experience the illusion of control
- do not act as if the choices they make come from a probability distribution
- make different trade-off decisions depending on the current context
- give undue credence to management and research gurus
- hang on and even add to losing positions
These psychological biases give rise to excessive trading and retention of losing positions well after the evidence indicates that the basis for the original investment has changed. The empirical results of this study show that most managers underperform their benchmarks, and intuitively most investors are aware of the facts, although the urge to deny overpowers these rational conclusions. Underperformance is typically explained away with the use of alternative time horizons, or by ascribing irrationality to recent investors (ie, the market is wrong), or by confidently asserting that things are just about to turn favourable.
Several useful suggestions have been advanced to help investors deal with these behavioural impediments to investment success. These are:.
REFERENCES:
Kahneman, Daniel, Paul Slovic, and Amos Tversky, eds. Judgment Under Uncertainty: Heuristics and Biases, London: Cambridge University Press, 1982.
Poundstone, William. Prisoner's Dilemma. New York: Anchor Books (Doubleday), 1992.
Cialdini, Robert B. Influence (The Psychology of Persuasion). New York: Quill, William Morrow, 1984.
Thaler, Richard H., ed. Advances in Behavioral Finance. New York: Russell Sage Foundation, 1982.
Hogarth, Robin M. and Melvin W. Reder, eds. Rational Choice. Chicago: The University of Chicago Press, 1986.
Dreman, David. Contrarian Investment Strategy. New York: Random House, 1979.
Thaler, Richard H. The Winner's Curse, New York: The Free Press, 1992.
Paulos, John Allen. Innumeracy, New York: Hill and Wang, 1988.
Bernstein, Peter L. Against the Gods: The Remarkable Story of Risk. New York: John Wiley & Sons, 1996.
Pratt, John W. and Richard J. Zeckhauser, eds. Principals and Agents: The Structure o Business. Boston: Harvard Business School Press, 1985.
Articles/Papers
Kahneman, Daniel and Amos Tversky. "Choices, Values, and Frames."' America Psychologist, Vol. 39, No. 4, April 1984: 341-50.
De Bondt, Werner F.M. and Richard H. Thaler. "Financial Decision-Making in Markets and Firms: A Behavioral Perspective." National Bureau of Economic Research, Inc. Working Paper No. 4777.
Tversky, Amos, and Daniel Kahneman. "The Framing of Decisions and the Psychology of Choice." AAAS, 1981
Behavioral Finance, with its roots in the Psychological Study of Human Decision Making, documents how and why most investment managers:
- are more confident than they should be in their forecasting ability
- do not process information efficiently
experience the illusion of control
- do not act as if the choices they make come from a probability distribution
- make different trade-off decisions depending on the current context
- give undue credence to management and research gurus
- hang on and even add to losing positions
These psychological biases give rise to excessive trading and retention of losing positions well after the evidence indicates that the basis for the original investment has changed. The empirical results of this study show that most managers underperform their benchmarks, and intuitively most investors are aware of the facts, although the urge to deny overpowers these rational conclusions. Underperformance is typically explained away with the use of alternative time horizons, or by ascribing irrationality to recent investors (ie, the market is wrong), or by confidently asserting that things are just about to turn favourable.
Several useful suggestions have been advanced to help investors deal with these behavioural impediments to investment success. These are:.
- Accept that investing is a probabilistic art.
- Recognize and avoid the circumstances leading to undue confidence.
- Deliberately seek out the contrary view.
- Have a written plan for each position, especially the "exit strategies".
- Create feedback loops that allow for process analysis and improvement.
REFERENCES:
Kahneman, Daniel, Paul Slovic, and Amos Tversky, eds. Judgment Under Uncertainty: Heuristics and Biases, London: Cambridge University Press, 1982.
Poundstone, William. Prisoner's Dilemma. New York: Anchor Books (Doubleday), 1992.
Cialdini, Robert B. Influence (The Psychology of Persuasion). New York: Quill, William Morrow, 1984.
Thaler, Richard H., ed. Advances in Behavioral Finance. New York: Russell Sage Foundation, 1982.
Hogarth, Robin M. and Melvin W. Reder, eds. Rational Choice. Chicago: The University of Chicago Press, 1986.
Dreman, David. Contrarian Investment Strategy. New York: Random House, 1979.
Thaler, Richard H. The Winner's Curse, New York: The Free Press, 1992.
Paulos, John Allen. Innumeracy, New York: Hill and Wang, 1988.
Bernstein, Peter L. Against the Gods: The Remarkable Story of Risk. New York: John Wiley & Sons, 1996.
Pratt, John W. and Richard J. Zeckhauser, eds. Principals and Agents: The Structure o Business. Boston: Harvard Business School Press, 1985.
Articles/Papers
Kahneman, Daniel and Amos Tversky. "Choices, Values, and Frames."' America Psychologist, Vol. 39, No. 4, April 1984: 341-50.
De Bondt, Werner F.M. and Richard H. Thaler. "Financial Decision-Making in Markets and Firms: A Behavioral Perspective." National Bureau of Economic Research, Inc. Working Paper No. 4777.
Tversky, Amos, and Daniel Kahneman. "The Framing of Decisions and the Psychology of Choice." AAAS, 1981
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General Gonad said:
Yet another defensive response but a wise decision though! Because I don't care much for phony wannabe intellectual types like you. Case closed.
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Picasso,
A wise decision? Ooooh....I am running scared. I have nothing to be defensive about and I am definetely not a "phony wannabe intellectual." I am simply stating my opinion, which is shared by many experts, that the most exciting thing that has happened in the field of finance and economics in the last decade is behavioral finance, which took off with the pioneering work of two psychologists. I find it interesting that two psychologists - not economists - would have been awarded the Nobel Prize in Economics in 2002 (Amos Tversky died in 1996 and therefore the prize was shared with an economist).
Finally, Picasso, I suggest in the future you do not engage me in the way you did, by calling me names and by writing that all I do is lecture people on how to treat SPs. Maybe you should read Cloudsurf's excellent post on Jacynthe from Eleganza and learn from the older, wiser members. Case closed. (now I know why I prefer Rembrandt!!!)
More on these pioneering psychologists below:
Psychologist wins Nobel Prize
Daniel Kahneman is honored for bridging economics and psychology.
BY DEBORAH SMITH
Monitor staff
In October, Princeton University psychologist Daniel Kahneman, PhD, was awarded the Nobel Memorial Prize in Economic Sciences for his groundbreaking work in applying psychological insights to economic theory, particularly in the areas of judgment and decision-making under uncertainty.
Kahneman is recognized for the pioneering research and theoretical work he conducted with colleague Amos Tversky, PhD, who died in 1996. While Tversky was acknowledged in the announcement, the Royal Swedish Academy of Sciences does not award prizes posthumously. "Certainly, we would have gotten this together," said Kahneman on the day of the announcement. "There is that shadow over the joy I feel."
The team's findings have countered some assumptions of traditional economic theory--that people make rational choices based on their self-interest--by showing that people frequently fail to fully analyze situations where they must make complex judgments. Instead, people often make decisions using rules of thumb rather than rational analysis, and they base those decisions on factors economists traditionally don't consider, such as fairness, past events and aversion to loss.
For example, they found that people's decisions can be swayed by how the situation is framed. When Kahneman and Tversky asked people to hypothetically decide what procedure to take to cure a disease, most preferred a procedure that saved 80 percent of people to one that killed 20 percent.
They developed an economic model--prospect theory--to better explain analogous economic behavior that's difficult to account for with traditional models, such as why there are large, seemingly unprovoked fluctuations in the stock market or why people drive to a distant store to save a few dollars on a small purchase, but not for the same discount on an expensive item. The theory now forms the basis for much of the applied research in economics.
"His work has inspired a new generation of researchers in economics and finance to enrich economic theory using insights from cognitive psychology into intrinsic human motivation," said the Royal Swedish Academy of Sciences' announcement. That's evidenced by the fact Kahneman and Tversky's seminal paper "Prospect theory: an analysis of decision under risk," has the highest citation count of all articles published in Econometrica, arguably the most prestigious economic journal.
Kahneman and Tversky hadn't planned on foraying into a new field--he calls their entry into behavioral economics "completely accident"--but after the Econometrica paper, they found themselves in a circle of innovative economists, including Richard Thaler, PhD, a leading behavioral economist now at the University of Chicago.
"We are all delighted that one of our own won a Nobel Prize--not only because he well deserves it but also because it reminds the world that psychology is science," says APA Executive Director for Science Kurt Salzinger, PhD. "Now if we could have a Nobel that is labeled 'Psychology' next year."
Kahneman will split the prize, worth about $1 million, with experimental economist Vernon L. Smith, PhD.
A wise decision? Ooooh....I am running scared. I have nothing to be defensive about and I am definetely not a "phony wannabe intellectual." I am simply stating my opinion, which is shared by many experts, that the most exciting thing that has happened in the field of finance and economics in the last decade is behavioral finance, which took off with the pioneering work of two psychologists. I find it interesting that two psychologists - not economists - would have been awarded the Nobel Prize in Economics in 2002 (Amos Tversky died in 1996 and therefore the prize was shared with an economist).
Finally, Picasso, I suggest in the future you do not engage me in the way you did, by calling me names and by writing that all I do is lecture people on how to treat SPs. Maybe you should read Cloudsurf's excellent post on Jacynthe from Eleganza and learn from the older, wiser members. Case closed. (now I know why I prefer Rembrandt!!!)
More on these pioneering psychologists below:
Psychologist wins Nobel Prize
Daniel Kahneman is honored for bridging economics and psychology.
BY DEBORAH SMITH
Monitor staff
In October, Princeton University psychologist Daniel Kahneman, PhD, was awarded the Nobel Memorial Prize in Economic Sciences for his groundbreaking work in applying psychological insights to economic theory, particularly in the areas of judgment and decision-making under uncertainty.
Kahneman is recognized for the pioneering research and theoretical work he conducted with colleague Amos Tversky, PhD, who died in 1996. While Tversky was acknowledged in the announcement, the Royal Swedish Academy of Sciences does not award prizes posthumously. "Certainly, we would have gotten this together," said Kahneman on the day of the announcement. "There is that shadow over the joy I feel."
The team's findings have countered some assumptions of traditional economic theory--that people make rational choices based on their self-interest--by showing that people frequently fail to fully analyze situations where they must make complex judgments. Instead, people often make decisions using rules of thumb rather than rational analysis, and they base those decisions on factors economists traditionally don't consider, such as fairness, past events and aversion to loss.
For example, they found that people's decisions can be swayed by how the situation is framed. When Kahneman and Tversky asked people to hypothetically decide what procedure to take to cure a disease, most preferred a procedure that saved 80 percent of people to one that killed 20 percent.
They developed an economic model--prospect theory--to better explain analogous economic behavior that's difficult to account for with traditional models, such as why there are large, seemingly unprovoked fluctuations in the stock market or why people drive to a distant store to save a few dollars on a small purchase, but not for the same discount on an expensive item. The theory now forms the basis for much of the applied research in economics.
"His work has inspired a new generation of researchers in economics and finance to enrich economic theory using insights from cognitive psychology into intrinsic human motivation," said the Royal Swedish Academy of Sciences' announcement. That's evidenced by the fact Kahneman and Tversky's seminal paper "Prospect theory: an analysis of decision under risk," has the highest citation count of all articles published in Econometrica, arguably the most prestigious economic journal.
Kahneman and Tversky hadn't planned on foraying into a new field--he calls their entry into behavioral economics "completely accident"--but after the Econometrica paper, they found themselves in a circle of innovative economists, including Richard Thaler, PhD, a leading behavioral economist now at the University of Chicago.
"We are all delighted that one of our own won a Nobel Prize--not only because he well deserves it but also because it reminds the world that psychology is science," says APA Executive Director for Science Kurt Salzinger, PhD. "Now if we could have a Nobel that is labeled 'Psychology' next year."
Kahneman will split the prize, worth about $1 million, with experimental economist Vernon L. Smith, PhD.
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General Gonad said:
Dude,
Your "opinion...shared by many experts"??? Now that's a laugh! I've yet to see you express anything insightful on your own other cutting and pasting excerpts from the Web. BTW, if i want to learn behavioral finance, the last place i want to go to is an escort review board, and certainly not something posted by a charlatan wannabe intellectual claiming his opinion is shared by a Nobel prize winner. You obviously can't seem to ignore my observations like you said you would. So here is the deal: when you finally post something intelligent and insightful, I will respond to your post. Other than that, i'll just ignore you.
Also, since you brought this up, unlike you, I have seen Jacynthe, had a wonderful time and have posted a review way before Clousurf. I have been around this board a lot longer than you have, have posted plenty of mostly positive reviews of the ladies here so I got nothing to prove to you.
picasso said:
Dude, you da man! I can only hope to attain your insightful stature!
Hmmm, dare I ask what insightful comments you made? At least the board learned some basics on behavioral finance from my cut & pastes. Give it a break and please do ignore me. You come off like a frustrated pr_ck who has an ax to grind and a major superiority complex. Deal with your insecurities and then come back and show me that you are able to have respectful exchanges.
GG
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Mod 5,
I am very aware of the posting guidelines and have been very restrained in my exchanges with GG. As far as personal attacks and name calling, see GG's latest diatribe. Did you mean to warn him instead of me?
I am very aware of the posting guidelines and have been very restrained in my exchanges with GG. As far as personal attacks and name calling, see GG's latest diatribe. Did you mean to warn him instead of me?
Mod5,
Thank you for overseeing the rules so effectively - too bad they do not have Mods over at Yahoo chat sites. Anyways, this morning I decided to turn the other cheek and publicly apologize to Picasso for insulting him on my latest "diatribe," even though he initiated this exchange.
I am not here to prove anything. Unlike Picasso, I think we can all learn from the lounge area on all topics. Isn't that what the lounge section is for? Now, let's all move on like grown men and start exchanging respectful insights on investment tips.
GG
Thank you for overseeing the rules so effectively - too bad they do not have Mods over at Yahoo chat sites. Anyways, this morning I decided to turn the other cheek and publicly apologize to Picasso for insulting him on my latest "diatribe," even though he initiated this exchange.
I am not here to prove anything. Unlike Picasso, I think we can all learn from the lounge area on all topics. Isn't that what the lounge section is for? Now, let's all move on like grown men and start exchanging respectful insights on investment tips.
GG
Just-ass-weet said:
Anik, I don't know if Ronnie is into spanking but if you are, just let me know.
To GG
I'm reciprocating the gesture and wish to apologize to you GG for the flaming. It's also the gentleman thing to do and I'm glad reason has finally prevailed !
General Gonad said:
I'm reciprocating the gesture and wish to apologize to you GG for the flaming. It's also the gentleman thing to do and I'm glad reason has finally prevailed
!denis blassie said:
The way you play bombardier is you buy it when it gets down below $2.40 and sell it when it hits $3.00, and play the same game over again.
The diamond mines in Northwest territories. Tahera (TAH) seems a good bet. They are scheduled to sell their first diamonds sometimes this spring. If the news are good then, you can expect this stock to explode.
I am an investment professional and will give you all a couple of tips to serve you.
First, find an investment professional to handle you investments.
Second, when he or she makes the recommendation as to where your investments should be made ask well thought out questions as to how he or she arrived at the investment mix suggested.
Third, if you believe in the course set out at the beginning, be prepared to stick with it through bad times.
Fourth, never be afraid to take profits off the table.
Fifth, be sure that you have an asset allocation which reflects your risk tolerence
Last, if something sounds too good to be true, it usually is, don't invest your money into it.
If anyone has any questions don't hesitate to contact me directly.
First, find an investment professional to handle you investments.
Second, when he or she makes the recommendation as to where your investments should be made ask well thought out questions as to how he or she arrived at the investment mix suggested.
Third, if you believe in the course set out at the beginning, be prepared to stick with it through bad times.
Fourth, never be afraid to take profits off the table.
Fifth, be sure that you have an asset allocation which reflects your risk tolerence
Last, if something sounds too good to be true, it usually is, don't invest your money into it.
If anyone has any questions don't hesitate to contact me directly.
Another thing you should ask your broker is where they are putting their own money and why? In other words, actions speak louder than words....
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