Category: Subjective Probabilities

Neuroscience & The Risk Manager including White Paper The Art of Algorithmic War

Coates, Shull, other experts weigh in on risk professionalsā€™ attention to their discipline Thursday, May 02, 2013, Risk Professional Magazine (published by the Global Association of Risk Professionals – GARP) By Katherine Heires Over the past 20 years, advances in brain imaging technology and other methods of analyzing neural activity have yielded important insights into […]

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The Secret Ingredient to Success in The NYTimes

Last Sunday, the most successful trader I knew from the Chicago Options pits texted me this – “Self-examination is the key to noodle making and other accomplishments.” Now you should know two things – 1) this guy NEVER texts – we have been friends for going on 20 years and this is the very first […]

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Risk & Uncertainty: Better Judgment

It’s easy to confuse the two but as Frank Knight wrote almost a century ago, they are two different things. Little did he know, that in addition to his logic, the brain reacts to each differently. With risk, or KNOWN probabilities, the brain can handle it in a more or less linear way. With uncertainty, […]

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The Psychology of Why Europe Will NOT Implode

In two words – “cold war”. Psychological research shows that whether we know it or not, everything we perceive, analyze and decide upon, we do so from a social-emotional context. We like to tell ourselves that we are being objective but our beliefs and our confidence in them come from our backgrounds – a social-emotional […]

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Instant Intelligence

We all like to think we are smart. We all admire, sometimes in awe, intelligence. But did you know that our understanding of theĀ  composition of intelligence is rapidly changing? Did you know that one research study showed that hand movement improved one’s ability to do complex math? To become instantly smarter about any decision […]

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Jamie, Psych Risk Management & Living to Trade Another Day

This is a true story. 3 years ago today (I have this weird memory for dates), I spotted Jamie Dimon and Bill Daley sitting outside Gibsons in Chicago. I just happened to have come from a lunch with Patricia Crisafulli who had written the House of Dimon and I had her book with his picture […]

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What Was Corzine Thinking?

Totally revamping emotions as data allows for the evaluation of alternative emotions like “what if I am wrong”. And that is the only way to get out ahead of any concept or fact of our brain’s ostensible “system 1″ and “system 2″

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Report from The Society of Neuroeconomics

Last weekend, a group of the world’s preeminent neuroeconomists met in Evanston and the research findings reported on were strikingly different from even two years ago. Virtually nothing about system 1 (logic) and system 2 (emotion) and a new found appreciation for the integrated role of feelings and emotions in every risk decision. Antonio Damasio, […]

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The Social Market – Theory of Mind

It’s easy to forget that markets are nothing more than a mechanism to transmit value and value is nothing more than perception. Hence markets are nothing more than perception. Likewise, it is easy to forget that in all of our fundamental, technical and economic analyses, we are trying to decipher and predict both current and […]

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The Debt Deal’s Social Map

So Sunday night came and went without a market meltdown. And now the market talk is of “we all know they will make some kind of deal” so … what’s the big deal? Let me ask you, what if they don’t? What if Congresspeople who truly don’t understand how financial markets function on perception decide […]

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