The Behavioral Investor Wilfred Waters

We interviewed Žiga Vižintin of https://irrationalretirement.com/about/. We talked about some common themes of this investigative series:

-delay discounting
-episodic future thinking
-lack of intuition about growth in curves
-harnessing the power of time
-gamification

Listen in as we tie it all together to design a retirement fund contribution stimulus app to produce irrational levels of investment in your future.

WHAT WE DO

We solve the mathematical problem of causing an enormous increase in one's bank account balance through human effort. The podcast therefore has two themes, mathematics and human behaviour. Together, behavioural investing. We take a first principles approach by summarising scientific studies and interviewing psychology and mathematics researchers. This will show us the first principles. We will then reason from these first principles to the best strategy to cause optimal human investing behaviour.

WHERE WE ARE

Twitter: https://twitter.com/ergofin
Podcast: https://podcasts.google.com/feed/aHR0cHM6Ly9hbmNob3IuZm0vcy8yN2I1YzZhYy9wb2RjYXN0L3Jzcw?sa=X&ved=0CA
Substack: https://behafin.substack.com/

---

Send in a voice message: https://podcasters.spotify.com/pod/show/the-behavioral-investor/message

In this episode we introduce you to the science, taboo and business of psychedelics. Tara Austin, consulting partner at the Ogilvy Behavioural Science Practice, wants to run as a UK conservative party candidate on a psychedelics platform. Josh is in the top 100 psychedelics influencers and founder of Psilocybin Alpha. We first came across Tara when she rescued David Nutt's psychedelics presentation at Nudgestock after his internet cut out:
In turn, she introduced us to Josh after we expressed an interest in the business of psychedelics. Josh was involved in this recent piece on psychedelics research in Yahoo News.
It was a terrific discussion covering a couple of significant psychedelics stocks, Atai Life Sciences and Compass Pathways. Importantly, Josh also emphasised the long term commitment of not for profits such as Multidisciplinary Association for Psychedelic Studies (MAPS) and Usona Institute in combating the taboo created by the Nixon administration.
In addition to her political plans, Tara is currently involved in the Psilocybin Access Rights campaign (visit par.global or https://www.cdprg.co.uk/psilocybin). This has the goal of changing the classification of this drug so people are not criminalised for possessing it, and so it can be used as medicine. Visit the website to see how to contribute.
After dispatching the psychedelics taboo, we ended with the next taboos Josh and Tara are turning their attention to. Quite inspirational guests, and we are proud to have had the chance to bring them to you. Thanks again Tara and Josh.
WHAT WE DO
We solve the mathematical problem of causing an enormous increase in one's bank account balance through human effort. The podcast therefore has two themes, mathematics and human behaviour. Together, behavioural investing. We take a first principles approach by summarising scientific studies and interviewing psychology and mathematics researchers. This will show us the first principles. We will then reason from these first principles to the best strategy to cause optimal human investing behaviour.
WHERE WE ARE
Substack: https://behafin.substack.com/
Twitter: https://twitter.com/ergofin
Podcast: https://podcasts.google.com/feed/aHR0cHM6Ly9hbmNob3IuZm0vcy8yN2I1YzZhYy9wb2RjYXN0L3Jzcw?sa=X&ved=0CA

---

Send in a voice message: https://podcasters.spotify.com/pod/show/the-behavioral-investor/message

Last episode Nick Mishkin (https://behafin.substack.com/p/s3e4-being-intelligent-about-emotions) mentioned Keith Chen’s futured languages research. Here he mentioned Japanese is not a futured language, which leads us to this episode where we spoke with @CacheThatCheque (https://twitter.com/CacheThatCheque), a value investor in Japan!

CTC mentioned a few resources to help foreigners get to know the Japanese market, such as the Buffett Code screener (https://www.buffett-code.com/), which is easy to use in conjunction with Google Translate. He recommended searching for blogs in Japanese for deep dives on businesses brought up by the screener. Examples of such blogs are:


https://tsubame104.com/archives/category/%e9%8a%98%e6%9f%84%e5%88%86%e6%9e%90
https://net-net-value.com/totalranking/
https://tsubame104.com/archives/5126
https://toushi-matomeblog.com/
https://tsubame104.com/

CTC's Twitter has his portfolio pinned. During the interview we discussed Eiwa (https://www.eiwa-net.co.jp/english/).

As such, CTC gave us a great overview of the Japanese market and some useful tools to find one’s way around it as an outsider.

Perhaps the most important thing, however, was the discussion at the beginning on how Japan isn’t the dull place it has long been thought to be. It has grown at the same rate as Western markets in the past ten years, for example. With half the market available for purchase net of cash, much opportunity awaits for activist investors.



As an aside, here is a very popular recent ergodicity tweet. 

WHAT WE DO
We solve the mathematical problem of causing an enormous increase in one's bank account balance through human effort. The podcast therefore has two themes, mathematics and human behaviour. Together, behavioural investing. We take a first principles approach by summarising scientific studies and interviewing psychology and mathematics researchers. This will show us the first principles. We will then reason from these first principles to the best strategy to cause optimal human investing behaviour.

WHERE WE ARE

Substack
Twitter
Podcatchers
YouTube
 


---

Send in a voice message: https://podcasters.spotify.com/pod/show/the-behavioral-investor/message

Nick is doing an MA in behavioral economics at IDC Herzliya (https://www.idc.ac.il/en/schools/rris/pages/behavioral-economics.aspx). We reached out to him for an interview because he curates the Behavioural Economics podcast playlist (https://open.spotify.com/playlist/2qVC324gaGLfO9HVoSddNv?si=hg8DUYx0QKGnEliXZ_nYiQ&nd=1). As it happens, he’s also been interviewed on Merle’s blog (https://www.moneyonthemind.org/post/interview-with-nick-mishkin), whom we interviewed recently ourselves! Yes, we’ve reached that stage of penetrating the behavioral finance landscape. Have a read of the reference list below for the topics he covered in this interview. The most useful point for our mission to understand why no one executes on Ben's Billion Dollar Compounding Plan is futured language, the first study below by Keith Chen.



REFERENCES


Chen, M. K. (2013). The effect of language on economic behavior: Evidence from savings rates, health behaviors, and retirement assets. American Economic Review, 103(2), 690-731. Accessed 24/7/21: https://www.jstor.org/stable/pdf/23469680.pdf.



Crosby, D. (2018). The Behavioral Investor. Harriman House. Accessed 24/7/21: https://www.amazon.co.uk/Behavioral-Investor-Daniel-Crosby/dp/0857196863.



Danziger, S., Levav, J., & Avnaim-Pesso, L. (2011). Extraneous factors in judicial decisions. Proceedings of the National Academy of Sciences, 108(17), 6889-6892. Accessed 24/7/21: https://www.pnas.org/content/pnas/108/17/6889.full.pdf?nr_email_referer=1%29%2C.



Levav, J., & Argo, J. J. (2010). Physical contact and financial risk taking. Psychological Science, 21(6). Accessed 24/7/21: https://journals.sagepub.com/doi/abs/10.1177/0956797610369493.



Levav, J., & McGraw, A. P. (2009). Emotional accounting: How feelings about money influence consumer choice. Journal of Marketing Research, 46(1), 66-80. Accessed 24/7/21: https://journals.sagepub.com/doi/pdf/10.1509/jmkr.46.1.66.



Matsumoto, D., & Willingham, B. (2006). The thrill of victory and the agony of defeat: spontaneous expressions of medal winners of the 2004 Athens Olympic Games. Journal of personality and social psychology, 91(3), 568. Accessed 24/7/21: https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.491.414&rep=rep1&type=pdf.



Simonsohn, U. (2007). Clouds make nerds look good: Field evidence of the impact of incidental factors on decision making. Journal of Behavioral Decision Making, 20(2), 143-152. Accessed 24/7/21: https://onlinelibrary.wiley.com/doi/pdf/10.1002/bdm.545.



Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12(3), 183-206. Accessed 24/7/21: https://onlinelibrary.wiley.com/doi/abs/10.1002/%28SICI%291099-0771%28199909%2912%3A3%3C183%3A%3AAID-BDM318%3E3.0.CO%3B2-F.


---

Send in a voice message: https://podcasters.spotify.com/pod/show/the-behavioral-investor/message

Paul Lloyd, CMO of Snoop, tells us about how the app arose through the introduction of open banking legislation, and exists to help people save money whilst monitoring their spending. He mentioned using Openwrks.com for bank data, although they themselves need to perform additional data cleansing. A nice function of the app is displaying user contributed tips on deals or cheaper services. It was a privilege to hear from someone with Paul's depth of experience, having spent 20 years at Virgin Money prior to the Snoop venture.  
More here: https://snoop.app 
WHAT WE DO    
We solve the mathematical problem of causing an enormous increase in one's bank account balance through human effort. The podcast therefore has two themes, mathematics and human behaviour. Together, behavioural investing. We take a first principles approach by summarising scientific studies and interviewing psychology and mathematics researchers. This will show us the first principles. We will then reason from these first principles to the best strategy to cause optimal human investing behaviour.    
WHERE WE ARE  
Substack: https://behafin.substack.com/ 
Twitter: https://twitter.com/ergofin 
Podcast: https://podcasts.google.com/feed/aHR0cHM6Ly9hbmNob3IuZm0vcy8yN2I1YzZhYy9wb2RjYXN0L3Jzcw?sa=X&ved=2ahUKEwjowqeApeLtAhU-LbcAHUHCBm0Q9sEGegQIARAC 
YouTube: https://www.youtube.com/channel/UC4MEB2vMIQYNOqz2ofyLiBQ




---

Send in a voice message: https://podcasters.spotify.com/pod/show/the-behavioral-investor/message

Merle van den Akker is a behavioral science PhD candidate at Warwick Business School. She runs the Money on the Mind (http://www.moneyonthemind.org/) blog and co-hosts the Questioning Behavior (https://youtube.com/channel/UCcz8ms4jDnmqcRlOR5RQSIg) podcast. She can also be found on Twitter (http://www.twitter.com/moneymindmerle).
In this interview we discussed her research on contactless payments and other technology-based means of removing friction and a sense of loss from the paying process. This is a fundamental issue for those practicing personal financial self care, who wish to maximize the proportion of their income that is invested rather than lost during unnoticeable spending events.
The interview also covered research on poverty and the feeing of time as someone struggling to survive. We discovered that hyperbolic discounting rates modulate depending on one’s level of financial distress. A key study she cited is On the Psychology of Poverty (https://science.sciencemag.org/content/344/6186/862). This lead us to a discussion of structures in society that stop people lifting themselves out of poverty, a key challenge to our assumption that the compounding sheet discussed throughout this series shall be sufficient to take care of people’s financial prosperity.
Similar to our S1E9 interview with Leigh Caldwell, she pointed out that business ventures are a major differentiating factor in finding financial success. It appears then that not only good financial compounding behavior but also starting a business shall need to be a focus of this podcast going forward, to answer the question why almost no one is seriously on a path to accumulating a billion dollars within 3 generations.
Finally, as a PhD candidate, Merle was an excellent source of information on conferences:

https://eshop.qmul.ac.uk/conferences-and-events/conferences-events/conferences-events/behavioural-finance-working-group-2021
http://www.rbfc.eu/
https://waset.org/behavioral-finance-and-markets-conference-in-october-2021-in-paris
https://conferenceindex.org/conferences/behavioral-economics
https://www.aobf.org/
https://www.behavioraleconomics.com/event/boulder-summer-conference-on-consumer-financial-decision-making/
https://www.consumerfinance.gov/data-research/cfpb-research-conference/2021-cfpb-research-conference/
https://warwick.ac.uk/fac/soc/wbs/subjects/bsci/events/spudm_2021/
https://www.ukfinance.org.uk/events
https://cepr.org/content/cepr-network-household-finance


---

Send in a voice message: https://podcasters.spotify.com/pod/show/the-behavioral-investor/message