On December 7, 2005, a curious thing happened in a Harvard classroom. Professor Michael D. Smith stood in front of a group of computer science students to introduce a guest speaker: entrepreneur and former Harvard student Mark Zuckerberg. What was curious was that the room was nearly empty. The [...]
The Oracle of Boston
Yesterday, I had the opportunity to attend a panel discussion that included a prominent investment manager named Seth Klarman. I'd like to share some of what he had to say. First, some background if you're not familiar with Klarman. The simplistic version of his biography would be to say that he [...]
Poker wisdom
Have you ever struggled with a financial decision? If you're like most people, I suspect that the math wasn't the hard part. What makes financial decisions a challenge, more often than not, is the subjective element. Financial decisions involve lots of variables—your future income, interest rates, [...]
How to make financial decisions
Suppose you wanted to guess the winner of this Sunday's Super Bowl. Which of these methods do you think would work best? (a) Flip a coin (b) Make an educated guess (c) Gather data and conduct an informed analysis In a classic study, researchers Paul Slovic and Bernard Corrigan attempted [...]
Alphabeticity bias
In the world of personal finance, researchers have long understood that behavioral biases negatively impact investors. Examples include recency bias, hindsight bias, confirmation bias, and many others. These are all well documented. But recently, a group of researchers uncovered yet another investor [...]
