Steadfast FinancesSteadfast Finances - behavioral economics
21 March 2011

How to Game the $7.99/lb Salad Bar

My secret is out. Scratch that – I doubt I’m the only one who ever figured out this frugal hack on how to turn the tables of your local grocery store’s salad bar, but being that I usually see at least one person making the same mistake every time I go shopping, I’d wager more [...]

3 February 2011

Michael Lewis and “Learned” Iconoclast Behavior

Every now and then, I get asked how can the individual investor learn to invest like Warren Buffet (an iconoclastic personality) or invest so they’re not always following the herd. The simple answer, aside from turning off financial television… The wise advice for the individual investor: be conservative, don’t listen to brokerage advice, and index. [...]

1 February 2011

Empire State Building Saving $4 Million with Windows Upgrade

Love to see stories like these. Buildings in New York City represent 80% of the energy consumed there. The total renovation project [replacing aging windows with energy star rated windows] at the Empire State Building is going to save over four million dollars a year. — Planet Forward What many people fail to realize is [...]

9 October 2010

Behavioral Economics: Real vs. Perceived Wealth Distribution

One of the odd things about working in finance is that, after a while, you begin to see the hidden quirks of humanity that might be “obscured” to the majority. Case in point: wealth distribution. Not surprisingly, most people mistakenly believe that even the little guy (e.g. the bottom 20% of earners) gets a small [...]

26 July 2010

Psychology of Choice: Cultural Dogma Affects Choice and Task Performance

A fascinating presentation on the positive and negative aspects of choice. Specifically, how your culture or geographic locale can influence how much you are allowed to stray from standard operating protocol, if at all. The narrative Americans tell, the story upon which the American Dream depends, is the story of limitless choice. This narrative promises [...]

27 June 2010

Strasburg Autographed Rookie Baseball Card Going for Half Million Plus

How’s this for mind blowing? A simple 3″ x 4″ piece of cardboard with a baseball player’s autograph is currently selling on eBay for $501,000. Granted, it’s not just any player: it’s rookie phenom Stephen Strasburg. The guy has been getting tremendous hype about becoming the next Nolan Ryan, or some say, could be the [...]

13 June 2010

Time Perspectives: Why We Argue About Money

There is a Greek proverb that says: A society grows great when old men plant trees whose shade they know they shall never sit in. As the proverb so eloquently suggests, it’s this type of time based philosophy that can make or break a society, as well as an individual’s or family’s personal finances. A [...]

1 June 2010

Should Lenders Have Known Better?

I ran across an interesting article in the New York Times today where it would appear that consumer psychology among homeowners in foreclosure has taken a change for the worse, or better, depending upon your point of view. It [lender giving a home equity loan] was a stupid move by their lender, according to Mr. [...]

29 April 2010

The Quants: How Mathematicians Led the Market Meltdown

A fascinating look at a group of traders and mathematical alchemists that rarely gets mentioned by name unless you work in finance called… Quants. It is clear that a major re-think is desperately required if the world is to avoid a mathematician led market meltdown. Unfortunately, people can use the models to hide as much [...]

7 April 2010

The Dark Side to ABC’s ‘Extreme Makeover’

If you’ve suffered through seen ABC’s Extreme Makeover show, you’ll find that it’s a seemingly heart felt effort to try to improve a family’s situation after repeatedly suffering from the downside to Murphy’s Law. Perhaps I’m jaded or have a better BS detector than most, but to me, the show is nothing but sentimental puffery [...]

4 April 2010

Classic Example of Addiction Psychology

This is a little off topic, but in this 60 Minutes piece on smokeless tobacco (trade name Snus), you will find one of the best examples of self-rationalization (or self-delusion) by an addict I’ve seen in some time. Indicators… Smokes first thing in the morning. Uses a snus while jogging to the gym. (Uncouth much?) [...]

1 March 2010

Investor Psychology: Missing Out on Profits is More Frightening than Losing Money

I ran across an interesting bit of research today suggesting that one of the leading ways investors get suckered into investment bubbles, and subsequently decimate our annual performance, is that we are far too concerned with being left out of the money making process, rather than losing our original investment. As one trading coach summed [...]

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