Tim Richards

  The Cherry Coke Effect? Hunger Games   If you want a favorable decision from a judge pray that you get a hearing early in the day or straight after lunch.  In similar fashion you shouldn’t be making investment decisions on an empty stomach.  In the parlance, such arbiters of

The Secret of a Healthy, Wealthy Life Infantile People   People, we know, generally aren’t very good with money. They don’t save enough, are inclined to procrastinate over saving for the distant future and are easily induced to splash out for instant gratification using the plastic. All of which has

  Overconfidence and Over Optimism Behavioural Biases (1): Overconfidence and Over OptimismMost of us are way too confident about our ability to foresee the future and overwhelmingly too optimistic in our forecasts. This finding holds across all disciplines, for both professionals and non-professionals with the exceptions of weather forecasters and

James Randi and the Seer-Sucker Illusion Illusion is not Forecasting   Every morning before he left home the illusionist James Randi used to take a piece of paper and write on it “I James Randi will die today”. He’d then sign and date it and slip it in the pocket

  Irrational Numbers: Price Clustering & Stop Losses Universal Number Theory One of the odder things about the universe is that the small set of numbers that define its structure, the so-called universal constants, don’t seem to have any structure of their own. You’d have thought that whatever immortal deity

  De Tocqueville: Trust in Self-Interest   And I assure you that all the peoples and populations who are subject to his rule are perfectly willing to accept these papers in payment, since wherever they go they pay in the same currency, whether for goods or for pearls or precious

  Confirmation Bias, The Investor’s Curse Behavioral Biases (7): Confirmation Bias The problem of confirmation bias – the tendency of people to seek evidence confirming an already held opinion and to avoid looking for that which might upset their carefully constructed mental models has attracted a lot of attention from

  Complexity in Financial Systems What’s Complexity?We can probably all agree that modern day financial systems are complex, but what that actually means isn’t something that everyone agrees on. Typically, though, a system characterised by complexity isn’t something that anyone’s designed – it emerges, it adapts spontaneously and it produces

  Be Humble, Become Wealthy Thrusting, Decisive and Frequently Wrong   We are both by design and by culture inclined to be anything but humble in our approach to investing. We usually invest on the basis that we’re certain that we’ve picked winners, we sell in the certainty that we