Archives for Markets - Page 5
In 1957, it was estimated that the Sydney Opera House would cost $7 million and be completed in 1963. In reality, a scaled-down version cost $102 million and did not open until 1973. This is an extreme example of Planning Fallacy. But it is just one of many examples from…
The recent US election has led to cognitive dissonance for many people, particularly Clinton supporters. Having Trump win after being certain that Clinton was a shoo-in led to conflicting emotions. To resolve this emotional conflict some developed ludicrous theories, such as vote rigging by the Russians, and that Clinton would…
The following three charts show the return on the S & P 500 on a daily, monthly and annual basis. They are reproduced from an article by Cullen Roche of Pragmatic Capitalism. Read the article here. The average daily and monthly returns are random and negligible. This supports the common…
It has been a widely accepted “truism” that more choice is better than less. While that may have been true when two or three choices were preferable to one, today we are swamped with choice. This leads to decision paralysis. Evaluating and comparing all the choices is exhausting and stressful,…
People tend to take credit for their successes but blame external factors, or other people, for failures. This is self-serving bias. It allows us to protect our self-esteem, which in turn is good for our confidence. There are regular examples of self-serving bias in sports. The winning team considers they…
Since the commodity boom, the only game in town has been residential house and apartment construction. Virtually all of this construction has been financed by offshore lenders, through local banks. This made eminent sense when Australia’s cash rate was much higher than the rest of the developed world. However, this…