The Evidence-Based Investor
The Evidence-Based Investor
  • 381
  • 87 826
Following the herd can be very dangerous
Robin Powell
Cameron Peng/ London School of Economics
+++
RP
Financial history is littered with examples of speculative bubbles that eventually burst, from Tulip Mania in the 1630s to the dotcom bubble in the late 1990s.
There are several reasons why such bubbles develop. One of them is the power of story-telling.
CP
Every time we look back at a historical kind of episode, we often have a narrative associated with it. It tells a story that has much more context to it. It has much more.
There is a logic. There is like, you know, what memory psychologists will call so many cues. It's not just about the numbers. Also about, you know, when the market was doing like this, how did people feel, what was, you know, the market?
What were the analysts were saying? All of these things, it's just much more concrete. And I think that makes the entire thing much more believable, if you know what I mean. It's not just about just the cool numbers, but now you almost like in the story. And I think that, you know, really get people to believe in what they want to believe.
RP
Another common feature of speculative bubbles is what behavioural experts like Cameron Peng call herding behaviour.
In other words, investors blindly follow other investors, assuming, often wrongly, that those investors have done their research and know what they’re doing.
CP
What happens in the herding behavior is that I don't really necessarily have anything, you know, concrete about a particular asset or particular stock. I don't really know. What is the value of a tulip. Tulip or bulb or. I don't really know the value of Microsoft in during the internet bubble. But then, you know, my friend bought it and got a good return out of it and I got to know about it.
And then for me, it was like, okay, maybe I don't know anything about it, but apparently my friend is and then I'm just going to repeat what this person does. And then when that kind of guy gets aggregated and every a lot of people are started doing that, that really gets people to herd. And I think this is what basically happens is that one person's opinion gets magnified and gets repeated, by many others.
RP
Many investors enjoy the excitement of speculating on a particular investment.
But a far more sensible strategy is to have a broadly diversified portfolio and stick to it.
CP
There is a bit of a disconnect. We have all of these insights about how you know what people should be doing, but they are not really taken by a lot of, you know, people who actually make decisions. We have to take, you know, these things that we found about how investors trade more seriously and better connect with, you know, the finance media about how things are done.
I'm basically putting all of my money in extremely diversified, funds that are like, you know, everything. So I, I think when I was a choose you, then that was like, you know, having fun with like stock trading. But now I'm like doing extremely, kind of like passive, investment. And I think that's, that's done reasonably okay for me.
But, yeah, I, I study behavioral finance, but I think in my own portfolio decisions, I'm extremely irrational.
RP
So, beware of investing in something just because others are. And remember, that’s their choice.
It’s much better to focus on playing your own game instead of trying to beat others at theirs.
Переглядів: 25

Відео

Don't let your fear of losses hold you back
Переглядів 24День тому
Robin Powell Paul Richards/ Better Decisions RP It’s a well-known phenomenon that investors experience more keenly than an equivalent gain. Behavioural psychologists like Paul Richards call it loss aversion. PR If we think about when we make an investment, then there's always the potential for loss and the potential for profit. Now, when we make a profit, we know that feels good. And equally, w...
Alpha and beta explained
Переглядів 49Місяць тому
Alpha and beta explained
What is evidence based investing
Переглядів 60Місяць тому
What is evidence based investing
The value of a trusted adviser
Переглядів 20Місяць тому
The value of a trusted adviser
Private equity may be riskier than you think
Переглядів 1022 місяці тому
Private equity may be riskier than you think
Financial and life planning go hand in hand
Переглядів 292 місяці тому
Financial and life planning go hand in hand
Why investors need an historical perspective
Переглядів 502 місяці тому
Why investors need an historical perspective
Crypto trading can be dangerous
Переглядів 433 місяці тому
Crypto trading can be dangerous
Two warnings for investors choosing active funds
Переглядів 293 місяці тому
Two warnings for investors choosing active funds
Traders compete with invisible opponents
Переглядів 154 місяці тому
Traders compete with invisible opponents
How to look after your future self
Переглядів 464 місяці тому
How to look after your future self
How to outperform major university endowments
Переглядів 184 місяці тому
How to outperform major university endowments
How do active funds perform?
Переглядів 114 місяці тому
How do active funds perform?
The rules of sound investing are counter-intuitive
Переглядів 444 місяці тому
The rules of sound investing are counter-intuitive
Trading stocks can be addictive
Переглядів 254 місяці тому
Trading stocks can be addictive
Look after your future self
Переглядів 246 місяців тому
Look after your future self
The downsides of thematic funds
Переглядів 297 місяців тому
The downsides of thematic funds
Why US equity exposure is so important
Переглядів 549 місяців тому
Why US equity exposure is so important
Why investors need to learn from history
Переглядів 249 місяців тому
Why investors need to learn from history
How an adviser can rescue you from yourself
Переглядів 389 місяців тому
How an adviser can rescue you from yourself
The wisdom of the crowd
Переглядів 8110 місяців тому
The wisdom of the crowd
Could mindfulness help you with your financial goals?
Переглядів 2210 місяців тому
Could mindfulness help you with your financial goals?
Reframing investment risk
Переглядів 5110 місяців тому
Reframing investment risk
Robin Powell: My mission
Переглядів 5511 місяців тому
Robin Powell: My mission
Welcome to the TEBI YouTube channel
Переглядів 152Рік тому
Welcome to the TEBI UA-cam channel
What does it mean to be wealthy?
Переглядів 140Рік тому
What does it mean to be wealthy?
Not having an adviser is a risk
Переглядів 65Рік тому
Not having an adviser is a risk
The importance of retirement planning
Переглядів 64Рік тому
The importance of retirement planning
The reason why women are less interested in finance than men is partly down to parenting
Переглядів 49Рік тому
The reason why women are less interested in finance than men is partly down to parenting

КОМЕНТАРІ

  • @xlozxloz
    @xlozxloz День тому

    Investing is easy. Working out why is difficult.

  • @BigWes95
    @BigWes95 2 місяці тому

    Lool good joke. That means that if you live in London you shouldn't buy a house according to this man unless you are on about £200k

  • @xlozxloz
    @xlozxloz 2 місяці тому

    After many years of investing, trying different strategies with mixed results, I eventually found TEBI. I'm so glad. It undoubtedly helped me retire early. I have my own quote: "Investing is easy. Working out why is difficult."

  • @shaun5944
    @shaun5944 2 місяці тому

    Pressure kills 😢

  • @shaun5944
    @shaun5944 2 місяці тому

    Cold 😢

  • @xlozxloz
    @xlozxloz 2 місяці тому

    I love these quotes. They tell you everything you need to know. But, they need to be "applied" and knowledge of why they are so good is necessary for their application.

  • @sPain4
    @sPain4 3 місяці тому

    Your 100% right , If it wouldn't exist from one day to another the only ones that would care are the ones that invested and people with criminal activity in mind. Idk why people need it you can't buy anything with it except illegal stuff.

  • @vincenthills5024
    @vincenthills5024 3 місяці тому

    What a load of misinformation! Ironic condidering the channel name as well. A) crypto currencies are not investments or assets, they are currencies, i mean come on its literally in the name B) traditional currencies are just as financially backed as crypto since we took them off the gold standard, thus any argument of this type can be applied to traditional money, crypto is simply volatile since it is new. C) the primary function of cryptocurrencies is to eliminate government control over your money, this does mean illegal activity, it just means removing government power where it is unnecessary - which is a good idea in general as governments show time and time again that they abuse power. D) the vast majority of cryptocurrencies can't be used for illegal activity, do you not understand what the blockchain is? It's a list of all transactions which anyone can access, its extremely easy to track drug money this way, in fact, most cryptocurrencies are less effective for the goal of anonymous transactions than cash is

    • @sPain4
      @sPain4 3 місяці тому

      Ok ... and? The problem is that if there is nobody backing it up it is bound to be volitile. Also it is mainly used for illegal activity or why should lidl just accept crypto all the sudden just for the price to change the next minute. I myself have seen people buy stuff on weird sites in crypto that they otherwise couldn't. And ngl If it was gone the next minute the only ones mad would be the ones that "invested" and criminals also crypto is a huge scam but the text would be too long for that. 😅

  • @vincenthills5024
    @vincenthills5024 3 місяці тому

    What a load of misinformation! Ironic condidering the channel name as well. A) crypto currencies are not investments or assets, they are currencies, i mean come on its literally in the name B) traditional currencies are just as financially backed as crypto since we took them off the gold standard, thus any argument of this type can be applied to traditional money, crypto is simply volatile since it is new. C) the primary function of cryptocurrencies is to eliminate government control over your money, this does mean illegal activity, it just means removing government power where it is unnecessary - which is a good idea in general as governments show time and time again that they abuse power. D) the vast majority of cryptocurrencies can't be used for illegal activity, do you not understand what the blockchain is? It's a list of all transactions which anyone can access, its extremely easy to track drug money this way, in fact, most cryptocurrencies are less effective for the goal of anonymous transactions than cash is

  • @firekin5624
    @firekin5624 3 місяці тому

    that was the point, yeah. and?

  • @seanduffy7730
    @seanduffy7730 3 місяці тому

    That will be Elon musk then 👍

  • @TRADITIONLAMINIATURE
    @TRADITIONLAMINIATURE 4 місяці тому

    Hi there! I watched your video and found it really engaging. However, I noticed a few areas for improvement, like the lack of tags, keywords, and a low SEO score. These factors can limit your video's reach. As a Digital Marketer and SEO expert, I can help optimize your content to gain more views, subscribers, and engagement. Let's discuss how we can boost your channel's performance!

  • @gingercornishhillbillyuk
    @gingercornishhillbillyuk 5 місяців тому

    well said.

  • @SadulloKhadjibayev
    @SadulloKhadjibayev 5 місяців тому

    So the key is to be aware of that always 🙏

  • @luizperezdacosta1726
    @luizperezdacosta1726 7 місяців тому

    Amazing, completely true

  • @shabbirhossain0
    @shabbirhossain0 Рік тому

  • @Dr.Stacker
    @Dr.Stacker Рік тому

    Solution could be government support for carers in the form of pension top ups?

  • @Dr.Stacker
    @Dr.Stacker Рік тому

    Care to share on your approach to accurate cashflow models?

  • @Smoakz
    @Smoakz Рік тому

    Investment has nothing to do with gender.

  • @padraighkinnaird
    @padraighkinnaird Рік тому

    great info, I have never ubnderstood why people think Cathy is so smart.

    • @andrewfurst5711
      @andrewfurst5711 8 місяців тому

      It's her nerdy look, especially the thick lenses in her eyeglasses. Also, she acts supremely confident that her investments absolutely will be THE FUTURE and other people just don't have her long-term vision.

  • @lutuputu3655
    @lutuputu3655 Рік тому

    Your Content are very Impressive, I Saw your last Couple of video On UA-cam and I noticed some mistakes that you have made. Your SEO score is poor, That's why UA-cam Algorithm down videos from search Rank. If You solve these issues you grow up smoothly reach more views and subscribe organically. I can help you properly. I am Radi, a UA-cam Marketing and SEO expertPromote your UA-cam video

  • @joycrooks
    @joycrooks Рік тому

    P r o m o s m

  • @fredrhodes4001
    @fredrhodes4001 Рік тому

    Christy why don't you switch to the democrats party because you sound more like Hillary Clinton every day and l don't like her either.

  • @Ricardo-C
    @Ricardo-C Рік тому

    no fucking shit

  • @SeosamhMacUaid
    @SeosamhMacUaid Рік тому

    this guy is full of it

  • @FuZbx
    @FuZbx Рік тому

    If you didn't buy a coffee everyday you would save 10k a year

  • @clubley2
    @clubley2 Рік тому

    Ah yes, so the way to make sure you have enough money, is to have rich relatives give it to you. Why didn't I think of that?

  • @stuartb3502
    @stuartb3502 2 роки тому

    My continued struggle with this (and I moved the majority of my holdings to a global tracker a while back and I'm moving the remainder now) is reconciling the obvious truth and logic of what your say vs the also obviously logical "don't follow the herd, buy low, sell high logic". What's low and high often does the opposite of the tracker. Couple that with when markets are clearly behaving illogically (e.g. Pandemania, analysts still bullish on earnings in the face of a global energy and food crisis and sticky inflation). The US is now over 60% not 36% in the two major indices with 10 US companies representing 15.5% of a global tracker (10 companies, one country out of >4000 tracked globally). That deosn't sound like diversity to me. It sounds like I'm jumping on the US bandwagon with the rest of the heros/lemmings (take your pick) like it or not, despite only seeking more stable 4-5% above inflation growth from a more balanced global tracker. Maybe with a long-term view that's still fine. Lemmings and heros are part of the market and da market knows best. Dunno. As someone who went through 2001, remembers AltaVista, sees the transition from oil etc and now is hopefully, at their retire early point, but still needs growth for the next 30-40 (pretty please) or so years it's an awful lot of eggs in 10 baskets in one economy. Beef up the low-risk component you say. But bonds, cash, even gold are all following equities south now so ain't doing what they're supposed to are they? Not arguing against here - I'm sold, but it's worth recognising the challenges of even the sensible, ungreedy strategy. Must get your book and see if there are some answers 🙂

  • @andypayne2743
    @andypayne2743 2 роки тому

    Such a great series that deserves a lot more views. Unfortunately because it doesn’t have 500x your gains with just £50 a month and a thumbnail of Lars with a shocked face pointing at a 500x graph it doesn’t get them.

  • @dlb550
    @dlb550 3 роки тому

    Quite funny how few people have seen this video but how much it really would help people overall.

  • @MikeSauss
    @MikeSauss 3 роки тому

    Yes please! just need more etfs for canada ='D

  • @stephen6262
    @stephen6262 3 роки тому

    Vanguard

  • @1292liam
    @1292liam 3 роки тому

    Best and cheapest, World equity tracker?

  • @stephen6262
    @stephen6262 3 роки тому

    Thank you lars great advice

  • @FABIOh1976
    @FABIOh1976 4 роки тому

    This channel is to the point

  • @divyeshmansatta7216
    @divyeshmansatta7216 4 роки тому

    Priceless advise for everyone and especially for youngsters.

  • @tishantjeyamohan6769
    @tishantjeyamohan6769 4 роки тому

    Thank you for sharing😊

  • @jec1ny
    @jec1ny 6 років тому

    Sadly Jack just passed away. A true giant and the conscience of Wall Street, it's hard to believe he is gone. Memory eternal!

    • @AllAmericanDreamChaser
      @AllAmericanDreamChaser 6 років тому

      Jack had many health problems throughout his life. Doctors told him without a heart transplant he would die. He lived everyday to the fullest. Rest in Peace Jack Bogle, you will be forever missed.🙏

  • @AllAmericanDreamChaser
    @AllAmericanDreamChaser 6 років тому

    Jack Bogle is the only reason I choose Vanguard. I hope the company doesn't change after he's gone .

  • @thisisbob1001
    @thisisbob1001 6 років тому

    my aviva dc pension has decreased nearly 10% this year!

  • @daves4687
    @daves4687 6 років тому

    Hi Lars thanks for a very informative channel. I had previously already taken your advice of global equity tracker (80%) but what I seem to drive myself mad with is my choice of bond fund. Because of age (39) I am tempted to go with long gilts as these seem to usually perform best in global crash. My fear is that long gilts will go down at same time of global markets. Would not my bond portion be better in U.S treasuries (pound hedged) as global equity market is so U.S based are not treasuries more negatively correlated during global downturn? Obviously a busy man but would greatly appreciate some clarity on this. Regards

  • @Daps24
    @Daps24 6 років тому

    Brilliant, but simples...

  • @xlozxloz
    @xlozxloz 7 років тому

    I was a convert to low cost trackers and just spent about three weeks of evenings choosing trackers for all parts of the globe, some of which are as cheap as 0.06% (Legal & General US Index Trust C Class Accumulation). Lars' videos have now got me thinking that just one global tracker is the way to go (so much simpler, less hassle and more accurate tracking of the whole of the world's markets), especially if it can be done at a low cost (0.25% was mentioned by Lars).

  • @strollby4800
    @strollby4800 7 років тому

    What an eye opening set of videos [1 to 5]. Simple explanations well put across. Thank you for taking the trouble and time to make the video, an excellent series of guides.

  • @strollby4800
    @strollby4800 7 років тому

    Excellent video. As someone like many others who have plodded down the highway of investments, Divi investing, fund managed, head scratching puzzlement, you have just removed the pain of worry about investing, thank you.

  • @LastOneInLineForName
    @LastOneInLineForName 7 років тому

    "Don't be the next Warren Buffet"... *makes videos making the exact same recommendations as he does :-D Great videos though, thank you.

  • @Fennefar
    @Fennefar 7 років тому

    🙏

  • @ginder66
    @ginder66 8 років тому

    another point that mite be the reason for this court case mite just be investments or is it just a coincidence, when people cast a vote they expect it to be respected not challenged by the rich.

  • @ginder66
    @ginder66 8 років тому

    There is an amount of shame people like her will never be able to shake off its a disgrace that it even got to court (the people spoke the referendum act 2015 was agreed was it not but now the unthinkable happened law does not matter because you don't agree with it shame on you)