Decision Nerds

Paul Richards & Joe Wiggins
  • 5.0 (5)
  • Investing

We talk about human behaviour and decision-making with an investment slant. And tell terrible jokes. Join us as we dive into the trenches with industry innovators, academics and mavericks.

  1. 3d ago

    There's no I in investment team

    Send us Fan Mail When seeking improvement in teams we generally face two choices: 1. Try something new and interesting, ideally something that can be compressed into an awayday session. It's easy - we will never be short of New Sexy Ideas (NSIs); things like psychological safety, radical candour, psychometric profiling. Choose your poison. 2. Stop doing the unproductive shit that everyone knows is causing damage.  What do most people choose? In my experience, it's option 1. Why? Most NSIs are plausible and talk to real problems. And who doesn't want to feel like they are being innovative and positive – it can make the team feel good and show management we are on the ball. Probably the most important reason to pick an NSI is that it means we don't have to directly deal with the tough baked-in problems the team might be facing.  My personal take is that you'll often get more from stopping the things that erode value than from adding something new on top. In this episode of Decision Nerds, we explore Charlie Munger's exhortation to 'Invert, always invert' with Andy Evans, an industry veteran who's written an excellent note on this issue. If you haven't come across inversion before, the idea is that instead of asking how to achieve success, you ask what causes failure and try to systematically avoid those pitfalls. We focus on one of the most challenging issues in investment management – how to make a team work effectively – covering everything from terrible incentive structures to why we promote the wrong people. Discussing teams and their problems can easily turn into a whingeathon, so we also offer some simple, practical fixes to make team life more enjoyable and effective. Feel free to listen to this as a team, with your own 'Jeez, do we do that?' bingo card. Andy' note can be downloaded here.

    There's no I in investment team

  2. May 8

    The curse of knowledge

    Send us Fan Mail 𝐍𝐞𝐯𝐞𝐫 𝐡𝐚𝐯𝐞 𝐈 𝐞𝐯𝐞𝐫… ...heard a client say, “I’m disappointed, you made that point too easy for everyone to understand”. Unsurprisingly, anyone who works in the field of investment or consulting will have heard many complaints the other way around. You may have been the culprit, or maybe had to present with THAT colleague who is incredibly smart, but who struggles to get their point across to less sophisticated audiences. In this episode of Decision Nerds, Joe Wiggins and I unpick this problem, why it exists and why it’s sticky. We discuss: 𝐓𝐡𝐞 ‘𝐜𝐮𝐫𝐬𝐞 𝐨𝐟 𝐤𝐧𝐨𝐰𝐥𝐞𝐝𝐠𝐞’ – once we know something, we can struggle to remember what the world was like before we knew it. This can impact everything from how decks are structured to how we answer questions in a meeting. 𝐓𝐡𝐞 𝐝𝐮𝐚𝐥 𝐚𝐮𝐝𝐢𝐞𝐧𝐜𝐞 𝐩𝐫𝐨𝐛𝐥𝐞𝐦 – investors and consultants often have to present to audiences with different knowledge bases. The problem is when they are both in the room at the same time. We discuss hitting the lowest common denominator vs. making a decision on who is the most important constituent. 𝐓𝐡𝐞 𝐚𝐟𝐟𝐞𝐜𝐭 𝐡𝐞𝐮𝐫𝐢𝐬𝐭𝐢𝐜 – humans process cognitively and emotionally. When we understand something well, our cognitive faculties can judge the quality of an argument. But what do people pay attention to when they don’t understand? As much as anything it is our tone, which can leave people with different impressions than hoped for. Out of the many behavioural problems that impact investors and their clients, this should be one of the easier ones to solve. It’s just communication skills, right? Sometimes, yes, but we also discuss: 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐯𝐬. 𝐞𝐠𝐨 – should we assume that people are always trying to communicate optimally? People may be using jargon, because they want to appear smart, or to bamboozle. If it’s this kind of driver, simply telling people to simplify their message won’t work. 𝐎𝐧𝐞 𝐭𝐫𝐚𝐜𝐤 𝐦𝐢𝐧𝐝𝐬 - 𝐭𝐢𝐦𝐞 𝐯𝐬. 𝐜𝐨𝐧𝐭𝐫𝐨𝐥 – very few people can easily go up and down the complexity curve/explain the same point in different ways, especially on the fly. Once people have ‘their story’ they can often get locked into it. This can either be a function of time (to create and learn a new story) or sometimes control – ‘this is my product, I’ll decide how it gets communicated’. 𝐄𝐦𝐩𝐞𝐫𝐨𝐫’𝐬 𝐧𝐞𝐰 𝐜𝐥𝐨𝐭𝐡𝐞𝐬 – for people to change, they need to know what the problem is. Powerful/influential people often don’t get to hear the unvarnished truth. If we want the best chance of change, we need to communicate the issue in a way that (i) reflects reality and (ii) gives the ‘offender’ a positive way forward that they can practically engage with. You can also hear Joe’s learning moment when he (foolishly?) decided to dig into the ratings his presentation was given at an investment conference.

    The curse of knowledge

  3. 04/16/2025

    Howard Marks: Navigating Crises - Creed, Preparation and Emotional Control

    Send us Fan Mail Howard Marks – navigating the crisis - creed, preparation and control What kind of mindset and organisational culture does it take to survive and to thrive in market turmoil? Let’s be frank, there are a vanishingly small number of people who have navigated multiples crises successfully and have something interesting and reflective to say it about it. One person who does is Howard Marks. Founder and Co-Chairman of Oaktree he is, for our (and Warren Buffet’s) money, one of the most thoughtful and experienced investors in the market today.   In the latest episode of Decision Nerds, we got to speak to him in the middle of recent market craziness. We had a fascinating chat - not about tariffs, Trump or trade wars, but the inner game; what individuals and firms need to succeed in this environment. Joe's writing on investment decision-making is here.   You can find Paul on LinkedIn here.

    Howard Marks: Navigating Crises - Creed, Preparation and Emotional Control

  4. 03/13/2025

    Dealing with Trumpcertainty

    Send us Fan Mail The Disruptor in Chief’s blizzard of executive orders, tariffs and foreign policy positions and his propensity to change them is making life difficult for investors and clients.    Things look and feel uncertain, perhaps more so than in living memory.  In this bite size episode, we discuss the science and practicalities of dealing with uncertainty.   The Electric shock study refernced in the discussion.

    Dealing with Trumpcertainty

  5. 01/23/2025

    Room 101: Project Coldplay

    Send us Fan Mail As the wordly philosophers of Coldplay suggest, getting what you want, but not what you need, might leave you in need of fixing.  Leaps in investment platform technology give investors more information, more choice and the ability to act more quickly and easily. We want that, but is it what we need? As Joe points out, many of the positive developments in tech are double-edge swords. He thinks from a behavioural perspective, now is one of the worst times ever to be an investor. 𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀: #𝟭 𝗟𝗮𝗰𝗸 𝗼𝗳 𝗳𝗿𝗶𝗰𝘁𝗶𝗼𝗻 – it takes me less than 10 seconds from launching my platform app on my phone to being able to deal. Is that a good thing? In one dimension yes, but the overarching story of behavioural finance is people doing irrational things that create bad outcomes. Slick and seamless tech combined with noise, FOMO and a constant barrage of stimulus has the potential to exacerbate these problems. #𝟮 𝗔 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲 𝗱𝗼𝗼𝗺 𝗹𝗼𝗼𝗽 – tech providers exist in a highly competitive environment and 'faster, easier, more' are key facets of the battleground. No one wants to lead a pitch with, ‘and….this is how we reduce information available to clients and make it harder for them to trade’. #𝟯 𝗥𝗲𝗳𝗿𝗮𝗺𝗶𝗻𝗴 𝘁𝗵𝗲 𝗴𝗮𝗺𝗲 – whilst it might be possible to get providers around a table to agree a common approach that helps investors manage their worst impulses, a market-based solution is likely more workable. This needs those who advise on these platforms to be changing the conversation and including behavioural design as part of any selection process. Imagine a world where providers compete on how they help clients beat their biases as much as how slick the tech itself is.  𝗣𝗵𝗿𝗮𝘀𝗲 𝗼𝗳 𝘁𝗵𝗲 𝗱𝗮𝘆? 𝗜𝗻𝘁𝗲𝗹𝗹𝗶𝗴𝗲𝗻𝘁 𝗳𝗿𝗶𝗰𝘁𝗶𝗼𝗻 “Intelligent friction,” is a concept from the payments industry which focuses on interventions based the risk level of a transaction. It aims to balance a good user experience with effective security. Buy a coffee in a new country when you land there fine, buy a laptop, expect an intervention. There are some obvious investment analogies here. And of course this is only one tool in the arsenal, getting better at education and helping clients help themselves is also pivotal. We don’t want to lose all the good things that tech brings, but to mangle Coldplay, we should perhaps be trying to help people want what they need.

    Room 101: Project Coldplay

  6. 01/15/2025

    Room 101: Performance fees - heads I win...???

    Send us Fan Mail Joe doesn’t like performance fees - but why? Are they innately problematic or just badly and perhaps cynically implemented in the mutual fund industry? In this bitesize episode, we get into alignment of interests, bad design and investor behaviour. 𝗧𝗵𝗲 𝗺𝗼𝘀𝘁 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴 𝗽𝗮𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗰𝗵𝗮𝘁? Performance fees are most often discussed in the context of alignment and risk sharing. Joe raises an interesting question - can they also be used to nudge investors away from unhelpful behaviour?

    Room 101: Performance fees - heads I win...???

  7. 01/08/2025

    Room 101: Chartcrime?

    Send us Fan Mail We all have things in our working lives that drive us insane. Anyone who regularly listens to the pod will know that there are a few subjects that consistently raise Joe’s blood pressure to unhealthy levels… In the interest of Joe's and our future guest’s wellbeing, we wanted to find a way of dealing with these issues productively.  Our solution, Decision Nerds: Room 101  Room 101 is the torture chamber in George Orwell’s classic book, 1984. For those who cross its threshold, it contains, ‘the worst thing in the world’.  Many Brits will remember the Room 101 TV and radio shows where celebrities suggested what they thought was the worst thing in the world and competed to have their pet hate consigned to oblivion (my personal favourite being Jimmy Carr and tax avoidance schemes). Our take on Room 101 is slightly different. Like the celebrities, Joe, I and our guests will discuss the issues that make our eyes roll. But it won’t be just a winge-a-thon, we’ll try to get to the heart of the issue and start a productive discussion.  𝗖𝗵𝗮𝗿𝘁𝗰𝗿𝗶𝗺𝗲 We're kicking-off with ‘chartcrime’ and something that particularly riles Joe - the overlaying of time series, such as inflation, from different periods and looking for predictive patterns. Are these charts a problem, or is it how they are used and framed?  In the episode, we discuss: 𝗣𝘂𝗻𝗱𝗶𝘁𝗿𝘆 𝗮𝗻𝗱 𝗽𝗿𝗲𝗱𝗶𝗰𝘁𝗶𝗼𝗻 and how different investor types might confuse the two 𝗧𝗲𝘅𝗮𝘀 𝘀𝗵𝗮𝗿𝗽𝘀𝗵𝗼𝗼𝘁𝗲𝗿𝘀 𝗮𝗻𝗱 𝗰𝗵𝗮𝗿𝘁 𝗰𝗿𝗲𝗮𝘁𝗼𝗿𝘀 - are they the same thing? 𝗧𝗵𝗲 𝗮𝘄𝗸𝘄𝗮𝗿𝗱 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻 that might stop people producing these charts Our Room 101 episodes are bite-sized and designed to provoke a conversation. Hot takes, or deeply considered meditations are both welcome. https://www.linkedin.com/posts/paul-richards-34965883_%F0%9D%97%A5%F0%9D%97%BC%F0%9D%97%BC%F0%9D%97%BA-%F0%9D%9F%AD%F0%9D%9F%AC%F0%9D%9F%AD-%F0%9D%97%96%F0%9D%97%B5%F0%9D%97%AE%F0%9D%97%BF%F0%9D%98%81%F0%9D%97%B0%F0%9D%97%BF%F0%9D%97%B6%F0%9D%97%BA%F0%9D%97%B2-we-activity-7282682076963733504-tB9s?utm_source=share&utm_medium=member_desktop And of course, feel free to submit the most egregious example of chartcrime you have ever seen (if you want to raise Joe’s blood pressure).

    Room 101: Chartcrime?

  8. 09/11/2024

    May Contain Lies...

    Send us Fan Mail If you’ve been around the block, you will likely have seen some eye-rolling use of evidence during meetings. Evidence can be used badly for many reasons; a misunderstanding of what conclusions can be drawn from it, or perhaps it has been cherry-picked to support a particular position. In this episode, we unpick these issues with Professor Alex Edmans of London Business School. Alex recently published a book, ‘May Contain Lies’, which discusses the methodological, psychological and incentive problems surrounding evidence use. We spend a decent amount of time on a core idea from the book, ‘The Ladder of Misinference’. If you think scientifically, there are no earth-shattering revelations here, but I really like it because it is a simple teachable framework that groups can adopt. Alex gives some great examples that everyone can understand and internalise.  The Ladder deals with the challenges of method, but that’s only half the story. We also have to beat the behavioural cards that nature has dealt us, e.g. confirmation bias.  And even if we beat the first two traps, incentives can nudge us away from saying what we really believe.  Key insights: - How Alex tries to move beyond black-and-white thinking and engage with complexity - getting the right mix of data and stories - Why do bad ideas stick - do you still 'Power Pose'?  - Changing minds – the power of good questions (there’s a great experiment on pianos and toilets that you can try at home). - Trading off the short and long-term - why he chose the most critical agent to help him publish his book.  - Understanding neurological carrots and sticks - what happens when we put people in a brain scanner and give them statements they like and don’t? - The state of debate around ESG and DEI – ideology, identity and pressures to conform.

    May Contain Lies...
See All (20)

Ratings & Reviews

5
out of 5
5 Ratings

About

We talk about human behaviour and decision-making with an investment slant. And tell terrible jokes. Join us as we dive into the trenches with industry innovators, academics and mavericks.

Information

  • Creator
    Paul Richards & Joe Wiggins
  • Years Active
    2023 - 2026
  • Episodes
    20
  • Rating
    Explicit
  • Copyright
    © 2026 Decision Nerds
  • Show Website
    Decision Nerds

You Might Also Like