Human Behavior


Don’t Invest in What You Know

It’s common market wisdom that non-professional investors should “invest in what you know.” This makes intuitive sense, since we obviously have an informational edge in sectors that we work in. Furthermore, it’s scary and requires extra effort to investigate areas of the market in which we have no experience. Imagine, for example, a lawyer who […]

Repeated Games & Airline TV

Pricing models are something that have long fascinated us.  So compelling is the topic that it’s a well known form of entertainment amongst economists to try and decipher how businesses set prices.  This is especially fun when there’s a good reason to think that there might be something unintuitive and more interesting than simple supply […]

Ratio of Value to Fear

In investment management we often use information gleaned from ratios to try and establish (within the limits of probability) where we are in a given market cycle.  Most of the time these ratios are financial in nature, comparing price to some other metric that, over long periods of time, should normalize around an average value.  […]