C&B Notes: Psychology
American Movil Rally: A Nonsensical Market Outcome
May 10, 2012
The recent uncertainty around Walmart de Mexico following bribery allegations against the company led to an interesting—but nonsensical—market reaction for American Movil, which saw its market value grow 13% in two days despite no ‘new news’ on the company. Formulaic, top-down trading too often ignores price as a/the key investment consideration.
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The ‘Cocktail Party Effect’
April 25, 2012
A group of California-based scientists now believe the brain has a base level function that forces us to focus on one stream of sound at a time. It has interesting implications for how effective multitasking is and whether we can even multitask at all.
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The Benjamin Franklin Effect
April 18, 2012
Ben Franklin highlights a human psychological trait that is generally counterintuitive but very applicable in everyday life.
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Coca-Cola and Gesture-Based Marketing
April 16, 2012
Coke continues to innovate new ways to market, including working hard to tailor its message for different audiences/cultures. We enjoyed this example of positive brand association.
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Strangers Can Spot ‘Kindness’ Gene
March 26, 2012
People with a certain genetic trait are known to be more kind and caring than people without it. According to a study conducted by scientists at Oregon State University, strangers can quickly tell the difference.
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Of Data & Certainty
March 23, 2012
One of the cornerstones of our investment process is attempting to identify and correctly interpret the information that would disprove our thesis on or ideas about a business. We intentionally focus on why we might be wrong in order to counteract cognitive biases, including the human tendency towards ‘certainty.’ Robert Seawright explores this idea in a recent blog post, which also reminded us of the value of Karl Popper’s ideas on falsifiability for the investment process.
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Clutch is Overrated
February 27, 2012
Humans have a psychological tendency to let anecdotes overwhelm actual underlying statistics. This proclivity must be accounted for in investing.
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The Power of Music Works To Adele’s Benefit
February 14, 2012
Scientists study the effect of underlying patterns in music.
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Online Review Skewing
January 31, 2012
If a system is gameable, humans will find a way to game it.
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Idea Generation & Productivity
January 30, 2012
How does one best balance the benefits that teams provide for idea generation with the advantages that privacy and solitude afford for productivity?
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When Stress Is Good for You
January 24, 2012
A little stress is helpful for peak performance, but too much can literally shut down the brain.
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I Err, Therefore I Am
January 23, 2012
“Fallor ergo sum.” St. Augustine’s memorable quote translates to “I err, therefore I am.” This TED talk by Kathryn Schulz, a self-proclaimed "Wrongologist,” finds inspiration in this idea of not just admitting, but rather embracing, our unavoidable fallibility.
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