Psychology

You See What You Want To See

On Confirmation Bias and How to Avoid It Is this a rabbit or a duck?  (Photo: Wikimedia Commons) Dan Kahan, a professor at Yale Law School, was interested in understanding how an individual’s beliefs affected their recollection of an event.  In order to test this he had two groups of students watch a video of…

The Evil Hours

On Financial Post-Traumatic Stress Disorder Photo: Pixabay Vernon Lamberg had been dead for 8 to 10 hours by the time they found his body in a hotel room in Wautoma, Wisconsin, two hours northwest of Milwaukee.  Five days earlier he had started his Monday like any other.  However, on that Monday, Lamberg would suffer a…

Easy in Theory, Difficult in Practice

On the Difficulty of “Buy and Hold” and the Importance of a Financial Advisor Mount Hood, Oregon (Photo: Pixabay) Roughly 60 miles east of Portland, Mount Hood is the most visited snow covered peak in America. Despite rising 11,240 feet into the skies of northern Oregon, it is considered a “beginner’s mountain” with over 10,000 climbers…

Be Careful What You Choose

How Your Preferences Evolve and Why It Matters Photo: Pixabay The experiment seemed simple enough. Each participant had to rank six paintings from their most favorite (1) to their least favorite (6). They were then told they could take home either the painting they ranked 3rd or the painting they ranked 4th. Naturally, most people choose…

The 6 Ways of Influence

On Recognizing and Preventing Financial Trickery Snake Oil (Photo: Wikimedia Commons) One of the best books I have ever read concerning human behavior is Influence: The Psychology of Persuasion by Robert Cialdini. In the opening chapter, Cialdini describes a peculiar trait about mother turkeys that has an interesting parallel to how humans behave: Turkey mothers…

And the Crowd Goes Wild…

On the Wisdom and Madness of Crowds Photo: Pixabay When the markets fall and the streets run red, the lone wolf survives, but the pack dies. In 1906, the British scientist Francis Galton made a discovery that would forever change our knowledge about group decision making. Before his revelation, Galton was of the opinion that the future…

Free Yourself from Your Investments

On the Psychology of Picking Stocks and How to Use Passive Investing to Your Advantage Photo: Pixabay Do you think you can predict the future? I am guessing you, like me, would confidently say no. But, what if I asked you to predict the future of a very specific thing? Say the future of a…