Posts Tagged ‘neuroeconomics’

The Neuroeconomics Revolution

Fascinating article by Psy-Fi’s Tim.  (My yellow highlighting.) – Ilene

The Neuroeconomics Revolution

Courtesy of Tim at The Psy-Fi Blog

Blond Bride and a Half-dressed Punk Groom Getting Married in a Church

Marriage Made in Heaven – or Hell?

A recent development in economics sees the combining of neurology, psychology and economics in an attempt to reduce economic behaviour to brain function and to predict market behaviour from observable brain patterns. Its aim is to glue together a subject that can’t predict human behaviour from analysis of the brain with a subject that can’t predict human behaviour from analysis of people to a subject that can’t predict human behaviour from analysis of economic data.

Welcome to the Neuroeconomics Revolution.

The Busted Flushes of Psychology and Economics

Psychology spent a large part of the last century stuck in a behaviourist dead-end, carrying out endless experiments on animals in an attempt to explain all human behaviour in terms of externally observable responses to equally observable stimuli: think ringing bells causing salivating dogs or rising markets causing manic investors. The net result of this was that the subject ended up befuddled by mice running the wrong way around mazes and found itself generally regarded as the extreme paramilitary wing of the pigeon fanciers association.

Meanwhile economics, the study of how human financial systems operate, also proceeded on the basis that how humans actually behave was irrelevant and arrived at a set of explanations that defied both logic and the evidence of real markets. Yet even as economics has reluctantly faced up to the need to involve psychology in its models so psychology is beginning to recognise that understanding people requires a more detailed look at the way the brain actually works. Taken together we’re witnessing the creation of a new subject.

Neuroeconomics

Neuroeconomics is nothing more or less than the attempt to relate the now observable functioning of the brain, as provided by neuroscientific techniques, with the various models of economics. Advances in brain scanning techniques permit researchers to subject innocent participants to endless pointless questions while inspecting how their brains grapple with the problems. There is no escape.

As you might imagine, the marketeers of the world have leapt on this idea. Martin Lindstrom relates in Buyology how the inspection of people’s brains reveals what more…
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No Free Lunch, Part 2

 

Picture via Pixabay

No Free Lunch, Part 2

Courtesy of John Mauldin, Thoughts from the Frontline 

Matching the stock market’s long-term average returns sounds like it should be easy, if you’re patient enough. But in fact it is remarkably difficult. In last week’s letter, Ed Easterling and I showed you why it is a longshot bet in almost every market environment. Returns over a decade or two are usually well above or well below average. Most of all, it’s fairly predictable which side of average will occur.

This has serious...



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Zero Hedge

San Francisco's 'Super Rich' Dominate A Widening US Wealth Divide

Courtesy of ZeroHedge. View original post here.

San Francisco is one of the few places in America where software engineers who earn hundreds of thousands of dollars a year routinely suffer the indignity of accidentally stepping in a steaming pile of human feces as they exit their crappy, overpriced one-bedroom apartments in the Mission District to grab a $20 burrito and $10 latte. That's part of SF's charm. After all, there's a reason it is, by some measures, the most unaffordable major city in the country.

...



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Chart School

Weekly Market Recap Mar 24, 2019

Courtesy of Blain.

It was looking like another week of Federal Reserve Kool Aid and crushing bears .. until Friday.  On the back of bad economic news out Europe, the yield curve inverted on the 3 month vs 10 year bond – before you fall asleep to that news, it is a quite important indicator for the economy (not necessarily the stock market… yet).   More on that in a bit.  As you can see the action in the bond market Friday was quite severe so it will be interesting to see the move in the coming few days.

As for the Federal Reserve:

The Federal Reserve signaled no more increase in interest rates this year and just one in 2020, according to its new ‘dot plot,’ and the bank said it would...



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ValueWalk

Micron this week was the poster child for this "bull-trap" lunacy

By Jacob Wolinsky. Originally published at ValueWalk.

From Crescat Capital

Thursday had the feel of a blow-off top for the bear market rally. We are near historic valuations for US stocks across at least eight fundamental measures and at a record late stage in the business cycle. Equity markets appear more stretched relative to underlying deteriorating fundamentals than ever.

Micron this week was the poster child for this “bull-trap” lunacy. Investors bid Micron’s stock up 10% on Thursday after the company released earnings. The move sent the semiconductor index to a record high on Thursday. The truth was that Micron gave terrible forward guidance on the conference call forcing analysts to slash estimates for revenues, earnings, and free cash flow for 2019 and 2020.

Friday the market start...



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Kimble Charting Solutions

NYSE Index Suggesting The Top Is In, Says Joe Friday

Courtesy of Chris Kimble.

Is a very broad stock index suggesting that a top is in play? What this index does to close this week should go a long way to answering that question!

This chart looks at the NYSE Index on a weekly basis over the past 4-years. Over the past 15-months, it has created a series of lower highs and lower lows inside of the shaded falling channel. It hit strong support around Christmas at (1) and a counter-trend rally started. The rally now has it testing the top of the falling channel at (2).

Joe Friday Just The Facts Ma’am- The NYSE index could be cre...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga.

  • Buckingham cut the price target for Trinity Industries Inc (NYSE: TRN) from $32 to $26. Trinity Industries shares closed at $22.96 on Thursday.
  • Canaccord Genuity lowered the price target for Biogen Inc (NASDAQ: BIIB) from $396 to $275. Biogen shares closed at $226.88 on Thursday.
  • H.C. Wainwright cut the price target on Conatus Pharmaceuticals Inc (NASDAQ: CNAT) from $8 to $1.50. Conatus Pharmaceuticals shares closed at $2.91 on Thursday.
  • Wedb...


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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Reminder: We are available to chat with Members, comments are found below each post.

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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