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MarketPsych: Applying Behavior Finance's Blog

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May 29, 2013 Comments (0)

MarketPsych analyzes investing psychology.  But in order to do that, we analyze language. The words we choose with shareholders, clients, and the media sometimes convey much more than we ever intend them to. Tim Cook, CEO of Apple recently gave an interview about the state of his company and one of the headlines quotations taken from it was this: "I think we have several more game changers in us." It was meant to reassure investors about Apple's strength for the future. ...

When Will the Rally End? S&P Euphoria, French Frailty, and the Gambler's Fallacy

May 20, 2013 Comments (0)

"On August 18, 1913, at the casino in Monte Carlo, black came up a record twenty-six times in succession [in roulette]. ... [There] was a near-panicky rush to bet on red, beginning about the time black had come up a phenomenal fifteen times. In application of the maturity [of chances] doctrine, players doubled and tripled their stakes, this doctrine leading them to believe after black came up the twentieth time that there was not a chance in a million of another repeat. In the end the unusual...

Did We Contribute to the #HackCrash? Light-speed Information and the Psychology of the Herd

May 1, 2013 Comments (0)

“Rothschild coaches careered down highways; Rothschild boats set sail across the Channel; Rothschild messengers were swift shadows along the streets. They carried cash, securities, letters and news. Above all, news---latest, exclusive news to be vigorously processed at stock market and commodity bourse.” ~ Frederic Morton (1962), “The Rothschilds: Portrait of a Dynasty” There are many stories and legends surrounding the Rothschild family, and probably most are untrue.  It is widely...

Cryptocurrencies, Bitcoin, and the Psychology Driving Global Currency Values

April 1, 2013 Comments (0)

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” ~ John Maynard Keynes, “The Economic Consequences of the Peace” (1919). In 2008 MarketPsych’s CTO Thomas Hartman worked on a secretive software project in Panama.  The goal of that project was to disrupt and supplant...

Buy to the Sound of Cannons: The Relationship Between Global Violence and Asset Prices

February 4, 2013 Comments (0)

"Buy on the sound of cannons, sell on the sound of trumpets" ~ Nathan Rothschild, 1810 Maybe you haven’t heard the above quote, but you’ve certainly heard this variation with the same meaning - “buy on fear and sell on greed.” Easy to say, hard to do.  It is far more comfortable to speak those words in a lecture hall than it is to execute on them during a civil war.  And as we’ll see below, it is not always sage advice, especially in the case of currency trading. Fear is one of...

A Guide to International Investing: Unstable Government? Buy it. Happy Businesses? Short it.

February 4, 2013 Comments (0)

“He has to live in the midst of the incomprehensible, which is detestable. And it has a fascination, too, which goes to work upon him. The fascination of the abomination--you know. Imagine the growing regrets, the longing to escape, the powerless disgust, the surrender, the hate.” - Joseph Conrad, Heart of Darkness, Part 1 When a government fails – whether due to warfare, failure to provide services, or insolvency and cutbacks - the citizens of the country go through several psychological...

Making Resolutions Stick and The Least Trusted Banks of 2012

January 4, 2013 Comments (0)

Resolutions, Honestly New Year's Day now is the accepted time to make your regular annual good resolutions. Next week you can begin paving hell with them as usual ~  Mark Twain It’s 2013.  Lot of resolutions have been made: "this year I’ll exercise more, eat better, be more patient, etc…"  Yet as behavioral economists we know that most resolutions won’t be kept.  Those resolutions that are honored are usually simple and straightforward – goals that would have been achieved...

The Happiest Day of the Year and China Bottoming

December 24, 2012 Comments (0)

“During holidays, [Norman Vincent] Peale once suggested, you should make ‘a deliberate effort to speak hopefully about everything.’” ~ Oliver Burkeman Our in-house psychologist - Dr. Frank Murtha – recently asked me, “You’ve got all this data on emotions so tell me, what’s the Happiest Day of the year? And as a matter of fact, what’s the Angriest Day?  And the Most Pessimistic Day?” I had no idea.  Based on work by Aleksander Fafula, our data genius, we know the happiest month is...


December 24, 2012 Comments (0)

Speaking of the fiscal cliff - and who isn't these days - MarketPsych has a new digital short film up. It is part of our on-going series for financial advisors featuring Bob, the client, and his intrepid advisor, Helen. Just a little bit of levity as we drift closer to the precipice of financial doom.  CLICK HERE FOR VIDEO (Stay tuned for Part 2 which features an in depth look at MarketPsychs Financial Crisis Plan.) We wish you a Merry Christmas and a Happy New Year. And hey......

The Psychology of the Fiscal Cliff, Bullying, and the Impact of Stress on Markets

December 9, 2012 Comments (0)

“You have to remember one thing about the will of the people: it wasn't that long ago that we were swept away by the Macarena.” ― Jon Stewart Leading group therapy for mentally ill prisoners is never boring.  But is it dangerous?  Not really.  Humorous?  Yes, sometimes.  Enlightening?  Nearly always.  In one fascinating group, a mutiny against my leadership was led by a psychologically saavy gang-leader. I bring up this experience because it mirrors the...