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© 2024 Decision Nerds
Description
We talk about human behaviour and decision-making with an investment slant. And tell terrible jokes.
Join us as we dive into the trenches with industry innovators, academics and mavericks.
12 Episodes
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Lying – it’s something that all humans do. Most of the lies we tell are small and harmless. But deceptive behaviour in the investment industry lowers trust and increases costs and complexity.We are deceptive for many reasons and one of them is that we can get away with it. This is because, despite what we might believe, most of us are pretty terrible at spotting lying – including highly experienced financial analysts.But what would happen if we all had access to AI-powered technology on our p...
𝗛𝗼𝘄 𝗺𝘂𝗰𝗵 𝘁𝗶𝗺𝗲 𝗱𝗼 𝘆𝗼𝘂 𝗴𝗶𝘃𝗲 𝗮𝗻 𝘂𝗻𝗱𝗲𝗿𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗶𝗻𝗴 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗺𝗮𝗻𝗮𝗴𝗲𝗿?1. Hire a manager after a period of strong performance.2. Watch in horror as you don’t experience that outcome, maybe the opposite.3. Spend a huge amount of time and emotional labour deciding on whether your initial thesis was wrong, something has changed at the manager, or with market dynamics.4. After sucking up a huge amount of governance time, decide to sack the manager. 5. Rinse and repeat with potentially similar outco...
Thinking and talking about failure can be tough, especially when it’s us who’s failing. But it’s important for us as individuals and investment teams to find a way to do this in an effective manner that allows us to both learn and evolve. In this episode of Decisions Nerds… - Joe pits his inner Brian Blessed against an AI auto-editor - We examine Joe’s framework for thinking about errors around investment beliefs, processes and outcomes.- We then think about this in the contex...
We downed some eggnog and decided to record an impromptu Christmas special. We have a chat about how insights from behavioural science might help the festive holidays proceed more smoothly: 😂 Why Joe's team might think (in his own words) that he’s an ‘egotistical a*&hole’.😧 A simple way to feel better about Christmas (but you might not like it).😠 The nudges that retailers use to get us to buy. 💵 Gift cards or cash as a present – to constrain or not to con...
Following the publication of a new book, 'The Fund', Ray Dalio and Bridgewater have been getting attention for all the wrong reasons. The book alleges a toxic culture where the reality of day-to-day life doesn’t match that described in Dalio’s book, ‘Principles’. In this episode of Decision Nerds, we dive into the sludge and extract some key points that are relevant for organisations and teams. Key takeaways:#𝟭 𝗗𝗼𝗻’𝘁 𝗮𝘀𝘀𝘂𝗺𝗲 𝘄𝗵𝗮𝘁 𝘄𝗼𝗿𝗸𝘀 𝗳𝗼𝗿 𝗼𝘁𝗵𝗲𝗿𝘀 𝘄𝗶𝗹𝗹 𝘄𝗼𝗿𝗸 𝗳𝗼𝗿 𝘆𝗼𝘂It’s tempting to look at ...
In this episode we discuss how we can make better forecasts with Professor Paul Goodwin. We tackle everything from the techniques available, to human problems around understanding, bias and incentives. See the chapter headings for full details. NotesPhilip Tetlock's book is Superforecasting: The Art and Science of PredictionA paper that describes the key concepts can be found here.
Does fear of getting things wrong stop you from making decisions? If so, you’re not alone. Regret can have a profound impact on our choices. In this short episode, we unpack the challenges, discuss some solutions and use the timely case of thematic investment funds as a case in point. We tackle: The psychological nature of regret – why it can be useful, but also harmful.How regret can impact the best and bright of us – smarts and market knowledge are no defence. How ...
A bitesize episode with some thoughts from this year's Glastonbury festival.We tackle:Lana Del Rey - the need to understand who's got the power (literally in this case)Van Halen reconsidered - from divas to behavioural gurus via brown M&MsElton John - the peak-end rule and what set lists can teach us about being remembered.
It is incredibly easy to be cynical when we hear businesses talk about culture. At one point or another, most of us have shuffled into a room with colleagues to experience a PowerPoint presentation on our firm's culture. They can often be (a) generic, anodyne and marketing-led, or (b) aspirational, unrealistic and not reflective of leadership and/or street-level behaviour.We often end up with some version of the caricatures above not through bad intentions, but because building, maintaining, ...
1Our guest today, Tom Gosling, is a committed and thoughtful supporter of D&I. He's a practitioner turned academic who helps build bridges between researchers, policymakers and those at the coal face. He has an interesting take on some important strategic and practical D&I issues that often get no, or very little, air time. If you have any interest in D&I and how it impacts decisions, there’s something here for you. In this episode, we discuss:The business case for ...
F&^% ups – how they happen, how they’re judged and how we can sort themAt some point in life, all of us will make some kind of toe-curling mistake. In our work lives, we’re going to make smaller ones, or have to manage or deal with colleagues' errors on an ongoing basis.Understanding how errors happen and how they can be managed is important. But we also want to think about how others judge us, it might not be in the way we want or expect. In this bite-size episode of Decision Nerds,...
All investment decision-makers need feedback to improve. The key question is how can we give feedback in a way that allows people to meaningfully engage with it and ultimately change unproductive behaviour. In this episode, we chat with Clare Flynn Levy, CEO of Essentia Analytics. The core of Essentia's business is using tech to help investors understand their behaviour. A key element of their work is getting investors to engage in a process that, by design, will show where t...
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