55 episodes

All about your brain & obtaining real-world behavioral finance knowledge! Listeners have access to original and engaging discussion of behavioral finance and cognitive bias.

Mental Models Podcast It's not a brain in a jar, that's the gist! Dr. Daniel Krawczyk & George Baxter, JD, CFA

    • Business
    • 5.0, 17 Ratings

All about your brain & obtaining real-world behavioral finance knowledge! Listeners have access to original and engaging discussion of behavioral finance and cognitive bias.

    Mental Models: Psychological Timeline of Pandemic: #55

    Mental Models: Psychological Timeline of Pandemic: #55

    Jan. - Feb., 2020 was a period of ‘psychological inoculation’, in that we have heard this before, viruses come and go, like the flu and N1H1, and we will be okay.
    March - April, 2020 was a period of acknowledgment, that this virus is real and dangerous. Followed by the rapid onset of fear, resulting in a stress response. Fear is usually a quick moment that passes. That has not happened with the pandemic. Stress usually results in action, and there was some actions by individuals and governments that were surprisingly bipartisan and encouraged safety measures. Although these government responses across the world were confusing at times, which increased stress from more unknowns. Continued stress response can be physically and emotionally damaging. Read more on stress in #1 bestselling stress book “Why Zebras Don’t get Ulcers” by Robert M. Sapolsky (link below). For many people there are continued unknowns associated with job loss and financial and or food insecurity which may continuing the fear and stress response long past the current time period.
    May - June, 2020 is a period of psychological relief from virus concerns in that there is a period of predictability. Good health practices and ‘physical distancing’ are being setup and implemented.

    Links:
    “Why Zebras Don’t get Ulcers” by Robert M. Sapolsky https://www.amazon.com/Why-Zebras-Dont-Ulcers-Third/dp/0805073698
    Guide to stress and stress related diseases.

    • 31 min
    Mental Models: Brain Effects While Working From Home: #54

    Mental Models: Brain Effects While Working From Home: #54

    Norepinephrine sends signals widely throughout the brain that move us into a task motivated stated. A brain regain called the locus coeruleus located in the brain stem is involved in the release of norepinephrine. As we shift to a more passive state, another type of brain cell called astrocytes take over (they get their name from their star shape). Astrocytes cells support neurons in the brain, and are the most abundant glial cells in the brain. A study by Yu Mu et al, 2019 (link below) with Zebra fish shows that Norepinephrine was released when they are moved to actively swim. Meanwhile, astrocyte activity increased when the fish moved to a passive state. When workers get tired, just like the Zebra fish who felt they were not getting anywhere with their swimming, a passive state sets in the brain. To overcome this passive state and increase Norepinephrine release into the brain, take a break or change up work pattern to increase productivity again. Other ways to increase task-engaged brain activity include getting early light exposure and exercising. Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE
    Links:
    Glia Accumulate Evidence that Actions Are Futile and Suppress Unsuccessful Behavior https://www.cell.com/cell/pdf/S0092-8674(19)30621-X.pdf
    Decision Fatigue Mental Models podcast….
    Russell Foster book on sleep. https://www.amazon.com/Circadian-Rhythms-Short-Introduction-Introductions/dp/0198717687
    Video of Dr. Daniel Krawczyk and George Baxter on ETFguide Which Behavioral Traits are Hurting Your Investment Results? https://youtu.be/34VnOUyNgcA
    Investors are often their own worst enemies. That's what investing great Ben Graham once concluded. In this episode, Lynn Dolan @ETFguide TV talks with Authors Daniel C. Krawczyk and George H. Baxter, JD, CFA about their new book Understanding Behavior BIA$: A Guide to Improving Financial Decision Making. Both men also host the Mental Models Podcast. https://youtu.be/34VnOUyNgcA
    Other resources for ETFguide TV viewers:
    1. Free ETF Guides https://tinyurl.com/y2gep5kj
    2. Habits of the Investing Greats https://tinyurl.com/y6cg9n4v
    3. Index Investing Show https://tinyurl.com/y3862uaa

    • 11 min
    Mental Models: COVID-19 Stock Market Rallies: #53

    Mental Models: COVID-19 Stock Market Rallies: #53

    Global economy has stalled in early 2020 due to COVID-19 and governments have provided stimuli. The stock market has rallied; SMP is up from the bottom which is the most dramatic rise of the market EVER! CONCERN: exuberance in the market does not take into account the return to normal, as there is a new normal, which is still unknown. Narratives fill the gaps of unknown reality, and the narratives are less reliable than ever before, since analogies are made in the context of experience. Many business will be gone, or have take on significant indebtedness. Largely what has driven the stock market to rally is corporations borrowing at low interest rates, then buying more expensive equity. TWO trillion $ of equity expansion! “Punctuated Equilibrium” by Stephen J. Gould explain the evolution of ecological system of the stock market and the global business system. In the current business world the environmental shifts in business have created a ‘disequilibrium’ due to breaks in business and lifestyle. This alteration in business ecological system is looking for ‘Equilibrium’, which is not likely to occur very soon, and possibly not without a vaccine for COVID-19! Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE

    Links:
    Robinhood to track individual investors on individual stocks. https://robinhood.com/us/en/
    Punctuated Equilibrium by Stephen J. Gould. https://www.hup.harvard.edu/catalog.php?isbn=9780674024441
    Peppered moth of UK. https://www.bbc.com/news/science-environment-36424768
    Have you heard ‘Mental Models: Reflexivity: #20’ by Mental Models Podcast | Behavioral Finance https://soundcloud.com/user-682136294/mental-models-reflexivity-20

    • 25 min
    Mental Models: Global Protein Chain Breaking/Broken: #52

    Mental Models: Global Protein Chain Breaking/Broken: #52

    African Swine Fever in China has depopulated the hog heard in China. China is responsible for 50% of global production and consumption of pork. The coronavirus was completely unexpected and has further impacted the pork market with meat packing plants closing due to workers and their family members, sadly becoming ill or dying from Covid-19. Closure of meat packing plants to protect the meat packing workers and their families is necessary and the right this to do! The amount of pork in cold storage has decreased as of the recording of this podcast from 4 weeks to 3 weeks, and may have dropped further. The breaking of the Global protein chain, is an event that was never expected to be seen in the modern world and is a solid reason for continuing to reinvestigate the markets. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed “Understanding Behavioral Bia$” on Amazon - link here: http://amzn.to/2XHtsOE

    • 14 min
    Mental Models: Motivations & Basic Human Values-Part 2: #51

    Mental Models: Motivations & Basic Human Values-Part 2: #51

    Our basic human values drive us and drives up our oxytocin levels in our brain. Provided are applied examples of values in the investing world. We consider the basic human values by Shalom Schwartz tying together and the interesting relationships among the different values.We talk conservatism, openness to change, benevolence, universalism, achievement, and power. We discuss how these values are embedded and carried out within the networks of our brain. The pie chart of basic human values theory by Shalom Schwartz, will help you navigate Episode #51 and Episode #47: "Mental Models: Motivations That Drive You Part 1“. Listen here on the Mental Models Podcast website: https://www.mentalmodelspodcast.com/post/motivations-that-drive-you-basic-human-values-47.
    Interested in more on this topic and learning about your brain Buy“Understanding Behavioral Bia$” to learn more about overcoming biases that are keeping you from investment success! http://amzn.to/2XHtsOE

    LINKS:
    Mental Models: Motivations That Drive You: Basic Human Values-Part 1 #47 listen on Apple Podcast https://podcasts.apple.com/us/podcast/mental-models-motivations-that-drive-you-our-basic/id1458795155?i=1000468730689

    Mental Models Podcast Episode #2 "Value Drives our Lives! Your Brain Response to Value and Investing" listen on Apple Podcast https://podcasts.apple.com/us/podcast/value-drives-our-lives-your-brains-response-to-value/id1458795155?i=1000434905197 or SoundCloud https://soundcloud.com/user-682136294/2-value-drives-our-lives-your-brains-response-to-value-how-it-affects-our-investing-lives

    Mental Models: "Inside Bill's Brain: Decoding Bill Gates": #28 listen on Apple Podcast https://podcasts.apple.com/us/podcast/mental-models-inside-bills-brain-decoding-bill-gates-28/id1458795155?i=1000453548100

    Teed, A. R., Rakic, J., Mark, D., & Krawczyk, D. C. (2019). Relative activation patterns associated with self-transcendent and self-enhancement core values: An fMRI study of basic human values theory concepts in males. Social Neuroscience, 25,1-14. https://www.tandfonline.com/doi/abs/10.1080/17470919.2019.1598893
    Wealth of Nations by Adam Smith. https://en.wikipedia.org/wiki/The_Wealth_of_Nations
    Jane Goodall: https://en.wikipedia.org/wiki/Jane_Goodall

    #mentalModels #MentalModelsPodcast #UnderstandingBehavioralBias #Bias #DecisionMaking

    • 32 min
    Mental Models: Are Analogies between ‘?’ and Covid-19 Dangerous?: #50

    Mental Models: Are Analogies between ‘?’ and Covid-19 Dangerous?: #50

    Analogies help our brains understand a current event often using a past event, but with our brain filling in unknown gaps and creating possible dangerous inferences. Comparisons between the flue, N1H1, SARS, 1918 flu or even 9/11 are likely dangerous for understanding how society and investments will be impacted. Current events are different than past events. Analogies start forming from a ‘target analogy’, such as a believed equivalent past event, then our brains begin a mapping process from ‘source analogy’. Interested in learning more about investing, analogies, YOUR #Brain, and how we think to improve your financial gain in the market, read the five star reviewed book “Understanding Behavioral Bia$” amzn.to/2XHtsOE #learn Researchers Dr. Krawczyk has worked with in the filed analogy include Dr. Keith Holyoak http://reasoninglab.psych.ucla.edu/KeithHolyoak.html and Dr. John Hummel https://psychology.illinois.edu/directory/profile/jehummel

    • 16 min

Customer Reviews

5.0 out of 5
17 Ratings

17 Ratings

Left Tail Hedge ,

Useful nuggets of insight

The fundamental role of the investor is to process information and make decisions. One of the big hurdles to overcome in making good decisions is cognitive bias. Even with good information, people make bad decisions. Why? Who better to explore this than a SCIENTIST at the forefront of brain research and FUND MANAGER in the trenches?! I’ve found these short conversations enlightening and relevant, and I think you will too. RECOMMENDED.

double down ace ,

Great strategies for investors bonus brain info

I really enjoy listening to this podcasts, as a value investor who is interested in the why and how of bias and decision making, this is my go to podcast. Looking forward to their upcoming book!

Dough_Roller ,

Great Points

I'm a (overly) seasoned institutional equity investor, and this podcast provides great points for improvement. I particularly liked discussion about avoiding "default decision" making, how to think about the value of an asset and the role group-think plays in decision making.

Delivery is style of the speakers is great, and the quick, to-the-point content is easy to consume.

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