AI is not a replacement for stock-picking, but it will become a powerful ally against bad decision-making
(0:20) - qplum: Deep learning & AI Based Trading Strategy
(3:30) - AI Disruption On Asset Management Industry
(7:00) - Customized Portfolios: How AI Is Useful To Investors
(11:00) - Adjustment and Rebalancing Strategies of qplum
(15:30) - Tax Efficiency & qplum Integration With Brokers
(18:00) - qplum's Assets Under Management & Performance
(21:10) - How Will qplum Survive The Next Bear Market?
(25:00) - Episode Roundup: Podcast@Zacks.com
New risk management for the newest asset class is a welcome innovation, but requires different knowledge and skills than buy-and-hold
(0:45) - Bitcoin Surges Over $12,000... then $13K
(5:10) - 6 Starter Insights to Trade Bitcoin
(15:45) - How Will Large Futures Traders Impact Bitcoin?
(18:40) - What's Good About Futures Contracts?
(26:50) - The Crucial Function of the Clearing House
(30:10) - Contract Specs: CBOE & CME Bitcoin Designs
(36:00) - Futures Trading Can Be A Double-Edge Sword
(41:00) - Episode Roundup: Podcast@Zacks.com
In just 5 years, two new "exponential technologies" have been created that will dramatically change the world
(0:25) - Nothing Changes Economics and Behavior Like New Technology
(4:00) - The "Fear Of Missing Out" On Bitcoin Pushes it Over $10,000
(11:10) - 4 Thinkers Who Influence Bitcoin Mania
(18:30) - Genetic Disruption: CRISPR-Cas9
(23:00) - CRISPR Creator Becomes Its Cassandra
(28:30) - The Brave New World of Gene Editing
(32:40) - Episode Roundup: Podcast@Zacks.com
Technology is reshaping life and business so fast that intelligent adaptation could be the #1 skill of the 21st century
(0:30) - Hot Topics for Family Get-Togethers
(4:00) - Exponential Technologies: Change at the Speed of Light
(10:30) - Futurist Alvin Toffler's “Predictable” Life
(16:00) - Anti-Technology Ideology: Neo-Luddism
(21:00) - Overview of Warnings: Finding Cassandras to Stop Catastrophes
(24:45) - Jennifer Doudna: CRISPR-Cas9 Gene Editing
(33:00) - The Internet of Everything: BlackEnergy Malware
(39:00) - No Opt-Out: Handling the Speed of Change
(43:30) - Episode Roundup: Podcast@Zacks.com
Why the leading cryptocurrency has been strongly validated in the past month and dispels the bubble talk
(1:30) - Blockchain & Cryptocurrency Revolution
(12:00) - Bitcoin Volatility: The Hard Fork
(17:00) - Square Testing Integration Of Bitcoin
(22:00) - Zimbabwe Coup Spikes Bitcoin Over $13,500
(27:00) - CME Bitcoin Futures: Regulated Price Discovery & Arbitrage
(36:00) - Xbox One X and Tesla Updates
(41:30) - Episode Roundup: Podcast@Zacks.com
Jamie Dimon’s JPMorgan just launched a Blockchain platform based on a very different cryptocurrency.
(0:25) - Bitcoin Surges Past $7,000 on CME Futures Contract
(4:00) - Jamie Dimon: "Bitcoin Is A Fraud!"
(11:00) - What the Heck is a Blockchain?
(14:40) - Ethereum = Expanded Capability vs. Bitcoin
(18:20) - The Blockchain Revolution: Why Cryptocurrency Matters
(23:45) - Bitcoin = First Generation of World-Changing Idea
(32:20) - Episode Roundup: Podcast@Zacks.com
Fintech innovations are changing investing tools and behavior in powerful ways that you must begin to explore.
(0:30) - Automated Financial Management: Betterment & Wealthfront
(5:30) - Burton Malkiel: Are Markets Too Random?
(9:00) - Resources for the Deep Learning / AI Future We Face
(16:40) - qplum: Automated Investing Using AI and Data Science
(25:45) - Concerns with qplum: Will the Same Science Work for All?
(31:00) - Takeaways from qplum
(35:45) - Episode Roundup: Podcast@Zacks.com
The power of AI will take over the world with “invisible robots” making life easier, better, faster
(0:30) - AI and Deep Learning: Tools Not Tyrants
(6:00) - How DeepStack Uses Intuition in Poker
(14:45) - DeepMind’s AlphaGo Zero Drops a Bomb
(19:30) - Psychology Meets AI: Mariano Sigman
(24:40) - The Invisible Robots Are Coming!
(35:00) - Episode Roundup: Podcast@Zacks.com
How engineers taught a computer to beat poker pros using its "intuition"
(0:30) - What Is AI?
(2:00) - An Inside Look At Nvidia
(9:00) - What Not To Do In The Stock Market: Phil Hellmuth
(14:30) - Facebook and Intel's AI Partnership
(19:00) - AI Plays Poker
(24:00) - Creating A Computer With Intuition
(31:00) - Episode Roundup:Podcast@Zacks.com
After this high-profile prize in economics, investors might just be ready to admit how irrational they can be. Please pick a time stamped topic below:
(0:45) - Richard Thaler and Daniel Kahneman
(5:45) - Active Traders Already Accept Their Irrationality
(9:30) – Psycho-Economic Thinking for Investors
(12:00) - Richard Thaler: Nobel Praise Where It’s Due
(16:45) - Dan Ariely's Nod Before Nudge
(21:30) - Save More Tomorrow: Applying Behavioral Economics
(25:00) - What To Takeaway From Richard Thaler's Work
(28:50) - Episode Roundup: Podcast@Zacks.com
In honor of the late great Let's Make a Deal host, I offer some good and fun reasons to learn more math. Please pick a time stamped topic below:
(1:00) - What The Framers Couldn't Imagine
(7:00) - Monty Hall: The Probability Brain Buster
(12:30) - Jeff Yass: The Power Of Rational Thinking
(18:30) - Breaking Down The Probability Of The Monty Hall Problem
(24:00) - Daniel Negreanu: Probability Simulation
(28:45) - Episode Roundup: Podcast@Zacks.com
Beyond a mere momentum fad, 3 of these companies are part of tech renaissance that will last decades. Please pick a time stamped topic below:
(0:30) - FANG Stocks: Momentum Fad or Millennium Fuel?
(3:30) - The 6 Exponential Technologies
(8:45) - Is Facebook an Exponential Change-Agent?
(12:30) – A Long-in-the-Tooth Bull Market: Is It Peaking?
(15:30) - 5 Secrets of This Bull Market
(21:15) - Abundance Excerpt: Igniting The Enlightenment
(26:00) - The Rising Billion: The Impact Of Automation
(29:20) - Episode Roundup: Podcast@Zacks.com
This episode is all about the risk and reward of decision-making. Sometimes we avoid making decisions, and often we never learn from our bad ones. I was fortunate that I became a high-frequency currency trader 20 years ago and learned how to make lots of decisions every hour that I could never regret, and only learn from. But that doesn’t mean I don't still fall prey to the bad habits we all have when faced with uncertainty and risk.Please pick a time stamped topic below:
(0:20) – Risk-Reward Analysis for Better Decision-Making
(2:40) - The 6 Pillars of Great Trader Behavior
(6:00) - Behavioral Finance and Neural Science: Your Brain Isn't Meant To Trade
(11:00) - Peter Diamandis and Steven Kotler's Book, Abundance
(19:30) - Biotech Stocks: Gilead Buys Kite Pharma
(24:30) - Why Kevin Sold JUNO While Its Still On The Rise
(32:00) - Episode Roundup: Podcast@Zacks.com
While "the biotech century" cures cancer, it's also tackling dozens of neurological diseases investors should learn about. Please pick a time stamped topic below:
(1:00) - Neuroscience: The 4 Theaters Of The Brain
(5:00) - Investors Train Their Brains to Trade: Assumption and Perception
(10:00) - Neurology Is The New Oncology: The Boom In Brain Sciences
(14:00) - Biotech Companies With Breakthrough Research
(21:00) - Appreciating Differences: The Story Of A Misdiagnosis
(34:00) - Episode Roundup: Podcast@Zacks.com
One analyst predicts AR/VR markets to grow to $100 billion in 4 years and diagrams 4 hardware + software waves Apple owns. Please pick a time stamped topic below:
(1:00) - Facebook Hires Regina Dugan: Former DARPA Engineer
(5:30) - Tim Merel of Digi-Capital: AR & VR Expert
(8:45) - Pokémon GO's Success
(11:45) - 5 Big Challenges for AR
(16:30) - Tim Merel's Four Waves of AR
(18:45) - Why Apple Will Own AR
(23:30) - Alibaba: The Amazon of China
(27:00) - Episode Roundup: Podcast@Zacks.com
(0:30) - Disruptive Technology and New Shopping Behavior
(2:10) - Google, Facebook and Alibaba Making Waves in the News
(8:30) - Facebook Ads: Creating a Revolution For Small Business
(10:00) - The E.T. Economy: It's All About Consumer Experience
(15:20) - The Gig Economy: Thumbtack, TaskRabbit, Upwork
(19:00) - Mobile Shopping: SSF Method and 8 Big Predictions for Facebook Marketing
(25:00) - How Facebook Sells $30 Billion in Advertising
(28:30) - Episode Roundup: Podcast@Zacks.com
Could automation and AI wipe out a billion jobs in the next decade and create an inequality chasm? Please pick a time stamped topic below:
(0:40) - Automation Puts a Billion Jobs in Danger
(2:00) - Big Economic Disruption: Big Data, AI and Robotics
(3:40) - Is the Industrial Revolution Coming To An End For China and India?
(6:10) - Where are the Investment Opportunities?
(10:30) - IBM and Nvidia
(13:00) - Elon Musk: Neuralink
(16:30) - Biological Evolution: 3 Must Read Books
(19:45) - Yuval Noah Harari - Homo Deus
(27:15) - Episode Roundup: Podcast@Zacks.com
While Dan Ariely’s first book offered a slightly depressing view of human behavior, Payoff may change your life for the better. Please pick a time stamped topic below:
(0:20) - Dan Ariely: Predictably Irrational
(4:10) - Do first impressions get imprinted on us?
(6:30) - Arbitrary Coherence: Why do we accept anchors?
(12:00) - Are price tags anchors?
(14:30) - Dan Ariely: Payoff
(16:40) - What gets scheduled, gets done.
Welcome back to the Mind Over Money podcast. I’m Kevin Cook, your field guide and storyteller for the fascinating arena of behavioral economics.
I’m excited about today’s topics because we are going to talk about how our brains use stories to make decisions. In fact, after I tell you a few stories about brains and stories, you’ll start to wonder which came first – brains or stories!
Please pick a time stamped topic below:
(0:30) - How Storytelling helps us make decisions: Peter Guber Article
(4:15) - How do our perceptions effect our decision making
(7:15) - Insights from neuroscientist, Michael Gazzaniga
(15:00) - Experiments done by neuroeconomist, Paul Zak
(21:50) - Molly Crockett: "Beware neruo-bunk"
Welcome back to Mind Over Money. I’m Kevin Cook, your field guide and story teller for the fascinating arena of Behavioral Economics.
Today my guest is a trading coach who once worked in the field of “threat assessment” where he dealt with bank robbers, hostage negotiations and bomb threats.
Now psychologist Andrew Menaker focuses on a pragmatic model to help traders create self-awareness, positive behavior change, and ultimately success in their chosen vocation.
And I'm really excited to talk to him because he gives powerful depth and breadth to areas of trading psychology that I have long known were extremely important but never thought could be formulated into repeatable cognitive strategies that could help so many different types of traders.
Before we meet Dr. Menaker, I want to share a short blog he posted on LinkedIn back in October. This excerpt will set up our conversation well...
Trading Psychology That Works!
You know those lists of personality traits or characteristics of ‘good traders’ – what happens after you read them? Do you get excited? Do you become hopeful? Do you become worried that maybe you don't have the right stuff? Moreover, will reading about it make you a better trader?
That’s the big question, right? Does reading that stuff help you become a better trader? For the vast majority, my bet is that it doesn’t help at all! In fact, for most traders it triggers a very personal and particular sense of worry….I don't have the right stuff….Will I ever have the right stuff? How do I get the right stuff?
Then along comes an ad, a tweet, a webinar, or blog piece that promises to show you the path. Hypnotic suggestions, meditation, affirmations, positive thinking, NLP, Tapping, ‘brain balancing’...etc. I threw in ‘brain balancing’ because I recently spoke to a trader who was very angry, telling me, “I wasted money on brain balancing.”
The list of things promising to make you a better trader seems almost endless.
Most of the people selling you that stuff are not that different from the people selling you the ‘trading edge that works’. I like to refer to them as dream merchants. They are selling you a dream, not reality.
(you can read the full blog here or listen to the podcast and hear me read the whole thing to you!)
The Most Important Market in the World
Be sure to listen to my 20-minute conversation with Dr. Menaker where he tells how he went from the "threat assessment" business to helping traders uncover their own threats to their capital -- and their mental and physical health.
His analysis of the trading psychology game is original, practical, and based on his own experience as an S&P Emini futures day trader. He teaches traders to not just become aware of their emotions but how to use them as a rich source of information about their trading and decision-making.
But he warns that it takes "psychological courage" to do the work of analyzing and understanding the most important market you trade -- your "inner market" of thoughts, beliefs, perceptions, and neurological habits.
Dr. Menaker and I strongly agree that trading is actually a great way to discover yourself if you are willing to do that work.
If you're not into that, at least he provides a framework and a pathway to becoming the trader you always wanted to. Check out today's podcast to learn more about his ideas and work.
And thanks for following Mind Over Money. If you have questions, comments, or suggestions for future topics, please email us at podcast@Zacks.com
Plus, don't hesitate to be generous with compliments! Let my boss know you want Mind Over Money to keep exposing the psychology of investing!
The Evolution of Risk-Taking
Trading is one of the hardest day jobs in the world – what drives those who succeed at it?
Welcome back to Mind Over Money, I’m Kevin Cook, your field guide and story teller for the fascinating arena of behavioral economics.
Today my guest is a PhD candidate from the University of Greenwich in London who is studying the risk-taking behavior of traders from the perspective of evolutionary psychology.
Belinda Vigors wants to know if successful traders are doing anything different when making decisions under uncertainty and stress than us mere mortals who wrestle with our cognitive biases and unknown depths of neurochemistry and neuro-circuitry that drive our emotional habits.
Before we meet Belinda, I want to give you some background for our discussion that is actually causing a rift in the field of behavioral economics, at least for those of us who apply it to markets and trading.
I have been a long-time fan of Daniel Kahneman -- who is the only psychologist ever to win a Nobel Prize -- for his work on decision making under uncertainty and risk. He practically invented the discipline of behavioral finance.
And the cognitive biases that he has discovered and named over 4 decades have given us a rich vocabulary with which to talk about people (and traders) acting stupid and irrational with money and risk.
Since I am also an eager student of neuroscience, I simply look at the two fields as different but complementary ways of describing and understanding decision making. As I like to say, the behavioral gang studies us from the OUTSIDE-IN, while the brain gang studies us from the INSIDE-OUT.
An Affinity for Randomness and Ambiguity
But Kahneman’s 2011 book Thinking Fast and Slow has caused some extra controversy in the twilight of his long career because he may be not only oversimplifying how our decision making works, but also limiting any believer’s choice of solutions or therapies.
In other words, his System #1 and System #2 for thinking -- the fast and emotional vs. the slow and rational, respectively -- don't appear to integrate with the findings of brain science very well, which would argue for much more complexity especially as emotion and neurochemistry are concerned.
Kahneman also no longer likes describing humans as “irrational.” But then how do we explain all sorts of self-sabotage regarding money, risk and long-term goals? Or, how about truly self-destructive behavior like crime and violence?
And Kahneman’s theories are not based on any clinical work in helping people or traders change their thinking and decision-making. Since I did not read Thinking Fast and Slow, in today’s podcast I share a quick review by a thoughtful investor who explains quite well why the theories may be very limiting.
Ravee Mehta, a portfolio manager and author of The Emotionally Intelligent Investor: How Self-Awareness, Empathy and Intuition Drive Performance, says that Kahneman’s systems miss much of the significant skill, discipline, and what I call an “affinity for randomness” that traders can develop when they become more aware of their emotions and intuition.
Here’s an excerpt from Mehta’s 2012 blog, “Daniel Kahneman is Wrong (at least when it comes to investing)”...
I humbly disagree with Kahneman, a Nobel laureate, and some other prominent psychologists when it comes to “fast-thinking” and investing. They argue that the stock market is too complex and random for intuition to be developed. They believe that the randomness causes people to build incorrect association biases. This argument is flawed. While the overall market may seem complex and random, there are many patterns within it that recur frequently. The best money managers recognize patterns developing ahead of most. They also can develop useful intuition because they are honest with themselves about the role luck had in their success. The intuitive decision-making that is involved with investing is much more complicated than other types of decision-making. However, that does not mean that we should abandon trying to better develop and use gut instincts when we invest.
The Evolutionary Path of Trader Brains
Cognitive biases, emotional habits, and intuition are definitely interesting. But what really gets me excited is talking about how our brains work. And that invariably leads to discussions about our evolution.
So I was really excited to bring in a young student of this complex collision between behavioral science and of one of the hardest jobs on the planet, trading.
Belinda Vigors explains how traders may be dealing with risk in terms of “need thresholds” and survival goals. She bases part of her theories about emotion on the work of psychologist Jennifer Lerner of Harvard whose research examines the distinct effects of fear, anger, and happiness on risk perception and risk preference.
Be sure to listen to the podcast to hear my full conversation with Belinda.
Kevin Cook is a Senior Stock Strategist at Zacks Investment Research where he runs the TAZR trading service.