It’s that time of the year again

Planning Fallacy

It’s that time of the year again, when avalanches of New Year’s resolutions are launched with idealistic plans for drastic self-improvement in 2016. We resolve to quit drinking, smoking, or both.  We resolve to help others and to spend more time with our friends and…

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Diversify, diversify, and then diversify some more

diversify diversify diversify

Could we both agree on the following notion? That, in the investment field, there is no one instrument that can perform all the time, and that there is no one who can say with certainty—in advance—which instrument would perform best.  The future is uncertain and markets are random. As such, what Harry Markowitz…

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A few thoughts on our second brain

Our Second brain and intuition

I can literally envision all you regular readers rolling your eyes at yet another “brainy” post and thinking: “Tacomob, haven’t you written more than enough about the brain already?  Isn’t there some other topic on your mind?” Of course there is, and that’s why I am…

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Don’t worry, be …

protect your portfolio with Put Options

… Hmm, I don’t know how that header should be completed. Do you?  No? Then, let’s find out together. In my opinion, the standard saying: “Don’t worry, be happy” seems to be too simplified because not only do I doubt that one can be happy all the time, it also would…

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Neglect of prior base rates effect

tomorrow starts now; start an ETF savings plan

This is the tendency to fail to incorporate prior known probabilities which are pertinent to the decision at hand. Caution: Don’t read on if you are 40 years of age and above! Here’s an interesting question for the rest of you: Why aren’t more young people…

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Do you want to predict the future?

I beg your pardon? Did you just answer with a Yes? That is great, because that proves that you are human and/or a human being. Did you know that the human being is the only animal that thinks about the future? We—human beings—think about the future…

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Extreme Discounting

hyperbolic discounting

When we are presented with distant commitments, we tend to stumble on the difficulty that our brain has in placing us in the future with any degree of accuracy. Why is that? Because our brain evolved to make determinations about our…

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