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23
MAR
2016
Source Bloomberg

Knife Catching for Professionals – Calling the Oil Price Low

The International Energy Agency (IEA) has announced the oil price may have made a bottom. The oil price is a graveyard of experts who have called the low. Catching a falling knife is clearly a very dangerous occupation.   The following bodies have been found so far: Andy...
16
FEB
2016

Chart Lesson: Falling Wedge in the Rand

As those of you who have attended one of my courses will know I always prefer to use live current market examples to illustrate the lesson. What is the point of using a chart from 1972 as a Case Study. It of course worked out perfectly. But in real life we work on the hard right...
15
FEB
2016

Upside Down World – Buying Equities with a High P/E Ratio i.e. Herding, Not a Good Strategy

For many investors, the most commonly used method of stock valuation is the Price to Earnings multiple or the PE ratio. The current market price divided by the latest earnings per share of the company in question gives us the PE multiple for the stock. From a historical...
13
FEB
2016
My Delema

A Prospect Theory Dilemma – “I Face It Today”

Recently I have had the delightful task of presenting my short talk on behavioural finance to professionals up and down the country. The talk has the catchy title: Bulls, Bears – We Are All Sheep. It is a lunchtime, one hour presentation which I have been giving recently to...
10
FEB
2016
Rick Bensingor

Conformational Bias in Portfolio Managers – a Rant

Confirmation Bias, is the tendency to search for, interpret, favor, and recall information in a way that confirms one’s beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities. I have seen this in research pieces put out by...
08
FEB
2016

Spread in Strategists Year-End S&P500 Guesses Wider Than Ever Before

Just over a month into the year and there have been more cuts for year end targets by strategists and analysts this early in the year than ever before. Strategists and analysts are famous for their herding – but not right now. The gap between the highest and lowest...
16
JAN
2016
Warren Buffett

2016 the Year Warren Buffett Revealed as the Emperor with No Clothes.

We, the investing public, like to think there are gurus who can lead us safely and surely to profits. We need them and create them. In Behavioural Finance there has been much study of crowds and their need for leaders. The crowd will sometimes justify their choice blindly and be...
12
OCT
2015
Economists forecasts

Economists Never Learn

Shouldn’t the role of economists be limited to explaining data and to stay away from forecasting? Forecasting is something they are terrible at. They seem to consistently crowd as a group at the wrong answer. Usually when people are consistently bad at something they stop...
13
MAY
2015

Empowering professional investors to do more of what they’re good at, and less of what they’re not.

The buy-side is notoriously bad at reflecting critically on its own processes and performance. I find them to be very susceptible to biases such as over confidence. Last night at an MTA UK talk at Cass Business School Clare Levy, the Founder and CEO of the software house...
18
OCT
2014
Trading Psychology and Behaviour Training Course

Traders Beat Market Indexes Borrowing Tools From Sports

BLOOMBERG Graham Davidson was in a slump, the worst he’d ever known. In 15 years as a foreign-exchange trader in Sydney, New York and London, he’d always made money. Now, in the winter of 2011, he seemed to have lost his touch, Bloomberg Markets magazine will report in its April...