What are the main challenges to achieving good long term returns? Investors focus mainly on what the stockmarket might do; less so on their own behaviour. Some of the human behaviour that confers advantage in everyday life can drive poor investment decisions. The big challenges include; how we search for patterns and trends, the desire […]
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Tag Archives: Groupthink
Why do the biggest companies disappoint on governance?
October 16, 2014 
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Tesco’s high profile failure reveals the interaction between incentives, failed strategy and governance. Unfortunately, despite hiring what should be the best non-executives, the record shows the biggest companies have more governance blow-ups. What is it about the way that big businesses operate that makes them more accident-prone, not less? Even the investors lucky enough not […]
Continue reading What can behavioural finance teach investors?
October 10, 2014 0 Comments
What can behavioural finance teach investors about interpreting financial and economic data? My talk at the Royal Institution’s 14-10 Club offers some examples of behavioural biases from reporting by central banks, companies and fund managers. The talk and slides can be viewed or uploaded as a pdf from this Dropbox link.
Continue reading Do central banks ever check their forecasting record?
August 21, 2014 0 Comments
The best analysts work with what they know, and minimise forecasting. Assessing a company’s strengths and the price paid for shares usually beats making projections. So why, when it comes to the economy, is this discipline set aside? The Bank of England has now worked with forward guidance for more than a year, with little […]
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Behavioural Edge 