A very interesting article on some of the work of Andrew Lo by Gillian Tett: MIT finance professor Andrew Lo's market theories draw on research from the fields of neuroscience, evolution, and econometrics
In an article called 'Beware the Inner Reptile', Tett describes Lo's interesting angle and contribution to the field of behavioural finance, in particular he suggests that humans behave in a perfectly rational way in “normal” times, but will resort to their animalistic behaviours during times of panic. He link his work to earlier evolutionary development studies of the 'Triune Brain' by Paul MacLean.
Thus when markets go awry and things start to go 'bump in the night', traders and investors start to resort more on using both their mammalian brain and their reptilian brain. However, previous experience of markets has been confined to using and utilising the Hominoid part of the brain. One point of interest within the article is an interesting spin on the debate over the effectiveness of the EMH. The article can be seen here.
Subscribe to:
Post Comments (Atom)
AlphaMind podcast #107 A US Navy Seal Commander, A Mindfulness Expert, and Self-Compassion
In the brutal world of trading and markets, we can often turn in on ourselves, and end up becoming our biggest problem. The ability to stay ...
.png)
-
The trader and author of the book ‘Phantom of the Pit’ Art Simpson’s said of trading, ‘The Best Loser is the Long-Term Winner’ . Trading li... -
For anyone 30 or younger, the world of DeFi (Decentralised Finance) is their world. Some in their 30s are clued up, but to most, DeFi and th... -
.png)
In the brutal world of trading and markets, we can often turn in on ourselves, and end up becoming our biggest problem. The ability to stay ...
We are tied directly into the sate’s renewal database which allows us to process your request almost instantly. Pesticide ions
ReplyDeleteThrough this post, I know that your good knowledge in playing with all the pieces was very helpful. I notify that this is the first place where I find issues I've been searching for. You have a clever yet attractive way of writing. הדברת נמלים בבית
ReplyDelete