Successful fraud requires both a set of skills and a willingness to deliberately target and deceive others. The most successful fraudsters have a capacity to look us in the eye, to engage our trust and then betray it without a … Continue reading Scams, Victims, and Scammers
“Money doesn’t talk it swears” Bob Dylan Differences in attitudes to money are a major cause of disagreements in relationships. Research shows that financial disagreements are one of the more frequent and less easily resolved causes of relationship conflict. One study found that … Continue reading Money and relationships
Let’s call him James, a trader in a City investment bank; young, smartly dressed, confident, and a little impatient. He sat across from me in the interview:
“It’s really important to stay cool. For myself, I can say that I really don’t have much emotion while I trade”.
Half an hour later, as he relaxed a little, the façade had started to crack:
“Actually the pressure can be horrendous, a trade goes badly wrong, you are staring into black hole, frozen, knowing you should get out but just hoping the market will turn . . I rushed off the desk and threw up in the toilet – I was terrified”.
I gave this talk at the launch of Essentia Analytics, an innovative firm developing software to help fund managers track and improve their susceptibility to behavioural biases. Continue reading Emotions and the financial behaviour of professionals.
Can understanding the psychology of investment behaviour help you outperform the market? Probably not, but it can certainly help reduce the probability that you will under-perform the market. This matters, because the majority of private investors under-perform. One compelling piece … Continue reading Investment, Emotions and the Temple at Delphi*
And I am a weapon of massive consumption And it’s not my fault it’s how I’m programmed to function Lily Allen, The Fear, 2009 The financial crisis that hit us in 2008 has been analysed in great detail by economists and journalists. … Continue reading Shopping, impulsiveness and weapons of massive consumption
It is common to contrast emotions with rationality (usually in tandem with proclaiming the superiority of reason over emotion). Take for example this post on the changingminds blog. It is also the claim at the heart of Ayn Rand’s morally … Continue reading On the false contrast between rationality and emotion
Money fractures marriages, drives wars, inspires art, motivates some people to great achievements, leads others to despair. Fear, desire, love, hate, jealousy, anger, anxiety, relief, shame and many more shades of emotion may attach to money in the course of … Continue reading Welcome to the emotional finance blog
A brief trawl of media comment on the banking industry over the last few years suggests that the industry is awash with criminals and fraudsters. The picture of traders, often presented in the press, is of amoral risk-takers with bosses … Continue reading LIBOR, rogue traders and the supply of motivated offenders