Have any lessons been learned following the Great Financial Crisis? Around the world, it looks like new bubbles are growing. Certainly, the crisis showed that central banks and politicians can move decisively on the threat of economic collapse. But the sequel has been years of bad policy; propping up banks, bad loans and unsustainable growth. […]
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Tag Archives: Illusion of Control
Do central banks ever check their forecasting record?
August 21, 2014 
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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 […]
Continue readingBehavioural Finance Jan 2013
February 21, 2013 1 Comment
“Behavioural Finance & Investment” MSc in Investment Management, Heriot-Watt University 22 January 2013 Presentation by Professor Colin McLean I am going to focus on some practical ways in which behavioural finance can be applied day-to-day, and draw some conclusions about what we can do about psychology. I am not going to tell you to try […]
Continue readingMagical thinking & the illusion of control
November 3, 2010 0 Comments
Strong stockmarkets and quantitative easing now seem inextricably interlinked. While they move together simultaneously, little further analysis seems needed. Indeed, mere rumours hinting at more money printing are enough to trigger another buying flurry. And, while shares are going up, there is little motive for investors to question the logic of QE, or the risks. […]
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Behavioural Edge 
Will China be sucked into the currency wars?
Currencies are fast becoming 2015’s big investment risk. A factor once largely ignored can now make or break performance. Already, sharp moves this year in the Swiss Franc and Euro have hit some funds hard. But, do investors get enough information from managers about the risks being run? Although many funds do not hedge, monthly […]
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