How we should behave
Always think risk and return
Leave emotion out
Always think risk and return
Leave emotion out
Showing posts with label behavioral finance. Show all posts
Showing posts with label behavioral finance. Show all posts
Wednesday, February 17, 2016
Tuesday, February 24, 2015
Basic Politeness Matters In Business
Being polite may be going out of style. It may be the zeitgeist. Decades of poor parenting have elevated self-esteem over self-control. The instant gratification of fast food, online shopping, streaming movies, and whatever else our smartphones can find for us has bred modern Americans to exhibit basic contempt for activities requiring patience. Brutish behaviors have a cost measured in adult reputations tarnished and business opportunities missed. Good manners should make for good business. Just examine the costs of rudeness yourself and compare them to the payoffs for doing the right thing.
Politeness shows a respect for another person's worth. I have attended private events where loudmouths continue to socialize even after a featured speaker has ascended the podium to say what everyone came to hear. It is truly a head-scratching spectacle to watch an educated crowd ignore a feature event, even when some of them paid for the privilege. Quiet down, folks.
Arriving on time shows respect for another person's time. The worst supervisors in my career had a bad habit of making me wait for our appointed meetings while they socialized or wasted time in front of my face. They sent me a clear message that whatever they asked me to bring to the table was not worth their time. One superior never even showed up to a meeting she directed me to attend, even though I had to drive far out of my way. Bad leaders enjoy wasting people's time. Good subordinates run away from those superiors as soon as they witness sociopathic behavior.
Educated San Franciscans can change for the better. The opening night galas of San Francisco's major performing arts companies typically start at least five minutes late because too many people take too long to get to their seats. I wonder if the people arriving late really respect the arts so much by making the performers wait. The VIPs in box seats can lead us by example even if they're not causing the problem.
Alfidi Capital has not always been kind to humans who misbehave. Adults should know better but those who don't sometimes invite my wrath online. My behavior in person is usually more amenable even though I no longer need to please anyone to have a career. I do behave politely when I pay my bills and taxes on time, or when I attend social gatherings that require my silence. Manners pay dividends. It really is that simple.
Politeness shows a respect for another person's worth. I have attended private events where loudmouths continue to socialize even after a featured speaker has ascended the podium to say what everyone came to hear. It is truly a head-scratching spectacle to watch an educated crowd ignore a feature event, even when some of them paid for the privilege. Quiet down, folks.
Arriving on time shows respect for another person's time. The worst supervisors in my career had a bad habit of making me wait for our appointed meetings while they socialized or wasted time in front of my face. They sent me a clear message that whatever they asked me to bring to the table was not worth their time. One superior never even showed up to a meeting she directed me to attend, even though I had to drive far out of my way. Bad leaders enjoy wasting people's time. Good subordinates run away from those superiors as soon as they witness sociopathic behavior.
Educated San Franciscans can change for the better. The opening night galas of San Francisco's major performing arts companies typically start at least five minutes late because too many people take too long to get to their seats. I wonder if the people arriving late really respect the arts so much by making the performers wait. The VIPs in box seats can lead us by example even if they're not causing the problem.
Alfidi Capital has not always been kind to humans who misbehave. Adults should know better but those who don't sometimes invite my wrath online. My behavior in person is usually more amenable even though I no longer need to please anyone to have a career. I do behave politely when I pay my bills and taxes on time, or when I attend social gatherings that require my silence. Manners pay dividends. It really is that simple.
Monday, October 13, 2014
The Haiku of Finance for 10/13/14
Jealous of neighbor
Always seems to outperform
Keeping up with Jones
Always seems to outperform
Keeping up with Jones
Monday, March 31, 2014
Changing Low-Earner Behavior With Low-Information Incentives
A bunch of finance apps innovators shared their tips for changing behavior at last week's Meetup. I attended because I'm always on the hunt for new control mechanisms that the ruling class can implement. The open-source fin-tech community is always a big help.
One entrepreneur mentioned Startuponomics, a behavioral economics event that informs some of the business models percolating through fin-tech. Irrational Labs puts on that show. I don't pay to attend pricey events so they'd better invite me to speak. Startups learn things like the importance of word choices in prompting debtors to honor their promises to pay, and this apparently drives improved debt repayment rates.
"Persuasive design" is a subset of persuasive technology that drives humans to make appropriate financial decisions. It is the natural evolution of Edward Bernays' ad techniques into an all-encompassing environment for driving human behavior. Action-oriented verbiage, emotionally warm color tones, and gamification that rewards prompt repayment with expanded borrowing limits are all persuasive tools.
I actually think it would be beneficial to use video and animation that talks down to low-information consumers. Low-IQ people respond well to emotional appeals and celebrity endorsements in focus groups. The imagery should be as condescending as possible to be effective. Animated walk-through visual tours of a financial service encourage adoption because the vast majority of humans want to be told what to do in life. Behavioral finance works well on stupid people. The poor really should respond well to cartoon animal mascots telling them how to save, invest, and borrow.
A couple of the startups mentioned their reliance on electronic bill payments, and how vendors caught them off guard by accepting only paper checks. Anyone who only deals in paper checks is way behind the times. I pay as many bills as possible electronically. Shame on those sloths who are unwilling to deposit checks in a timely manner. Their poor cash management practices will be a death knell in a hyperinflationary economy.
My descriptions above reflect more than just a Jonathan Swift-like modest proposal to drive financial technology. I truly believe that the lowest social classes want and need benevolent guidance from elites. Fin-tech startups really do want to empower the poor to make better financial choices. Bringing them inside the capitalist system from the fringes makes everyone better off. Society becomes more stable, the poor become responsible customers, and the rich remain in power. The best revolutions are the ones that leave elites entrenched while everyone else is better off. Behavioral finance will change lives.
Nota bene: I redacted one paragraph from this article on April 1, 2014. I decided upon reflection that it was over the top and just plain unnecessary. I go pretty far out there sometimes, but when I go too far I know when to pull back.
One entrepreneur mentioned Startuponomics, a behavioral economics event that informs some of the business models percolating through fin-tech. Irrational Labs puts on that show. I don't pay to attend pricey events so they'd better invite me to speak. Startups learn things like the importance of word choices in prompting debtors to honor their promises to pay, and this apparently drives improved debt repayment rates.
"Persuasive design" is a subset of persuasive technology that drives humans to make appropriate financial decisions. It is the natural evolution of Edward Bernays' ad techniques into an all-encompassing environment for driving human behavior. Action-oriented verbiage, emotionally warm color tones, and gamification that rewards prompt repayment with expanded borrowing limits are all persuasive tools.
I actually think it would be beneficial to use video and animation that talks down to low-information consumers. Low-IQ people respond well to emotional appeals and celebrity endorsements in focus groups. The imagery should be as condescending as possible to be effective. Animated walk-through visual tours of a financial service encourage adoption because the vast majority of humans want to be told what to do in life. Behavioral finance works well on stupid people. The poor really should respond well to cartoon animal mascots telling them how to save, invest, and borrow.
A couple of the startups mentioned their reliance on electronic bill payments, and how vendors caught them off guard by accepting only paper checks. Anyone who only deals in paper checks is way behind the times. I pay as many bills as possible electronically. Shame on those sloths who are unwilling to deposit checks in a timely manner. Their poor cash management practices will be a death knell in a hyperinflationary economy.
My descriptions above reflect more than just a Jonathan Swift-like modest proposal to drive financial technology. I truly believe that the lowest social classes want and need benevolent guidance from elites. Fin-tech startups really do want to empower the poor to make better financial choices. Bringing them inside the capitalist system from the fringes makes everyone better off. Society becomes more stable, the poor become responsible customers, and the rich remain in power. The best revolutions are the ones that leave elites entrenched while everyone else is better off. Behavioral finance will change lives.
Nota bene: I redacted one paragraph from this article on April 1, 2014. I decided upon reflection that it was over the top and just plain unnecessary. I go pretty far out there sometimes, but when I go too far I know when to pull back.
Sunday, February 24, 2013
The Limerick of Finance for 02/24/13
Most financial experts are dumb
Their brains are the size of my thumb
They act but don't think
Deceive clients and wink
I won't do business with a bum
Their brains are the size of my thumb
They act but don't think
Deceive clients and wink
I won't do business with a bum
Saturday, April 23, 2011
Hedge Funds Back To Taking Dumb Money In Overvalued Market
It must be great to be a hedge fund manager. You can lever up at rock-bottom rates thanks to ZIRP and reinvent yourself in a brand new guise no matter how many times you've crashed.
Never mind the massive fines flying for traders who sank their commodity funds.
Never mind the continuing parade of money managers indicted for running Ponzi schemes.
Never mind the hedge fund managers who continue to trade even after they're convicted of money laundering.
Despite these and more systemic problems, new hedge funds launched at breakneck pace in 2010. Accredited investors with more money than smarts show a never-ending willingness to entrust poor-performing money managers with even more money. People who should know better are too credulous for words. Specialists in behavioral finance need to research this phenomenon. I suspect Bayes' Theorem comes into play. Go look that one up.
Never mind the massive fines flying for traders who sank their commodity funds.
Never mind the continuing parade of money managers indicted for running Ponzi schemes.
Never mind the hedge fund managers who continue to trade even after they're convicted of money laundering.
Despite these and more systemic problems, new hedge funds launched at breakneck pace in 2010. Accredited investors with more money than smarts show a never-ending willingness to entrust poor-performing money managers with even more money. People who should know better are too credulous for words. Specialists in behavioral finance need to research this phenomenon. I suspect Bayes' Theorem comes into play. Go look that one up.
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