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 qualm. This capacity is actually quite rare and often associated with personality disorder (or perhaps […]

“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 whilst people are often attracted to potential partners with different emotional reactions to spending, that […]

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”.

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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.

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 of research evidence comes from a careful analysis, carried out by Dalbar research, of the […]

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. A good deal of comment, including mine, has focused on the behaviour of bankers and […]

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 an ordinary day. Yet, economic accounts of human financial behaviour focus on reasoned weighting of […]

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 who are always ready to turn a blind eye if profits are being made. There […]