Today is the last day that Tesla will not be part of the S&P. S&P Dow Jones Indices has announced Tesla’s addition Friday after the market close. Tesla will officially trade as a member of the S&P 500 by the
Hindsight bias is reading beneficial past events obviously predictable, and bad events as not predictable and without cause (called black swans). In the decade between 1999 and 2009, we have many explanations for poor investment performance. Brokers and talking heads
The bandwagon effect, or groupthink, describes gaining comfort in something because many other people do the same. After all, “there is safety in numbers” correct? This is a falsehood. But let’s separate bandwagon-ing, from conventional wisdom. There is value that
Information bias is the tendency to evaluate useless or the wrong information when determining value. It’s the belief that certain commonly held data points are helpful in understanding the value of an investment, when they may not be. The key
Confirmation bias is the natural human tendency to seek specific supportive sources, or overemphasize information confirming our decisions. People will often come to a conclusion, then seek information confirming the decision. Think about buying a car, once you bought the
This is the belief that you own a “winner” and you will keep that winner for reasons that aren’t justified by the return. Owning companies is fun, and investors like to celebrate their victory over the market by stashing great
Loss aversion is the tendency for people to strongly prefer avoiding losses at the detriment to obtaining gains. This puts an unnecessary fear on an investment not supported by the risk prima. This might be one of the most common
Everyone has heard a mantra about first impressions and their lasting impact. That works for investors too. Because our brains thrive on recognizing patterns and the relationship one element has with another. This mental phenomena is called anchoring. This want
No one likes stress. Its impact on our decisions and relationships is bad, but the effect on our health can be permanent. We have all felt the effect of money stress, but often it’s only after the fact, or after
If you’re looking for some broader answers to the ‘universal question’ I’m not your guy and this is not that article. But I will say that after years of thinking the transcendental was not for me, I’ve changed. If it
You read that right, there is simply too much cash in the capital markets to not see a handful of effects that could impact your investments and plan. The supply of money floating around is massive right now. There is
