GameStop $GME shops mainly sold physical video games. They would also stock many resale items. The physical locations capitalized on the same type of business that comic book shops often had by selling collectibles as well. Many projected that Game Stop had a very limited future and had been cut out of the supply chain as many electronic games are …

The Electric Vehicle (EV) Bubble is rising and appears to be starting to burst. Issuances continue to pick up. The entire basket of EV stocks that we discussed in Episode #68 of Mental Models Podcast is now DOWN 42 % (at the time of this recording). The market will fluctuate and we will likely experience a surge with the approval of the US governme…

Financial insecurity impacts our brain and body throughout human development. Stress is increased with more authority & responsibility. Lessons from of Robert Sapolsky’s book “Behave: The Biology of Humans at Our Best and Worst” For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understandin…

Brain and Investing lessons that we took from the book Sapiens by Yuval Noah Harari (2017). An excellent read covering many surprising insights about human behavior from individuals to global institutions.From a scientific standpoint this book highlights the unique cognitive capacity of Homo sapiens. We can imagine theoretical constructs that canno…

Mental Models Podcasts predicts that this historic and unprecedented bubble will crash by the second quarter of 2021. Bubbles are driven by narratives. Bubbles have an end but timing the end of the bubble is unknown, which is the risky part, and very different than sports betting. Predictors are, volatility, age tilt, issuance, market cave, and acc…

COVID-19 has created an unprecedented impact on the stock market. There have been clear wining and losing stocks in 2020, where will these stock go in 2021? We review the uncharted stock market ahead, stocks to consider travel, #RV, #technologies, & #paper products. So much more to think about with the change that the vaccines for COVID_19 will bri…

Analogies help when we are faced with new challenges. Current events matter for the stock market, let’s frame these current events in relationship to historical perspective of the 2016 election and the impact of the market. ‘Political theater’ impacts the stock market, with the unknowns of the last 4 years and the uncertainty of the control of the …

A talent that you have, but will it last, unlikely! We all want that superior money earning performance to continue, and we enjoy the success of an individual over a team (Jessie Walker and Tom Gilovitch reported on it in 2020, links below). Because we like narratives and we want to be the hero of our story, just like Kolby Bryant or LeBron James w…

Hot hand effect is the mystic behind your winning streak, despite all of your theorizing. There are many factors that explain the wins in the stock market, but the hot hand effect/bias is one to consider. For more on best investing strategies, avoiding bias and learning about your brain BUY 5 star reviewed book “Understanding Behavioral Bia$” on Am…

Moving parts of the current economy has been influenced by the pandemic. This is an unprecedented time and reflects a poor experimental design. What is changing and what is holding steady, if anything? The government continues to print money, but has delayed another stimulus package. At one end the economy is being squeezed, (leisure and travel) an…

Compassion and our basic human values drive us. In this episode we revisit a popular episode, and discuss values in detail from both an investing & psychological perspective. Our mental models of other people’s behavior. As the market turns…Stay safe and healthy out there! For more on best investing strategies, avoiding bias and learning about your…

Spotify changing up the podcasting distribution - does it make Spotify a good investment? Spotify is scooping up top podcasters like Joe Rogan and Kim Kardashian to enhance their reach and overall product. Mental Models Podcast is waiting on the phone call from Spotify, we are ready to join the A listers! As the market turns…Stay safe and healthy o…

How does COVID-19 continue to influence market decisions? Online and e-commerce are impacting the market, as is the upcoming presidential election. What opportunities will the stock market provide? Small cap and large cap are seeing growth, and the indices are up, despite the “wall of worry” from possible presidential change. There is a tremendous …

What is the psychology of HOW Disney stock is traded due to #COVID-19? Disney provides ‘top notch escapism’ via multiple arms of the corporation. Additionally, psychology of Disney power is the ‘autobiographical memories’ associated with the Disney ears, Walt Disney himself, and the Disney Park experience. The stock will likely ride the COVID_19 wa…

Risk is always a part of investing but even more with the unknowns of opening and closing of the economy. Another factor driving the market is the money the feds are pumping out. Also, the influx of Robinhood accounts, driven by the lack of outlet for risky behavior (i.e. sports betting) and the stimulus checks. What happens to the stock market whe…

Everyone needs toilet paper! The initial increase in buying of toilet paper (AKA tissue paper) at the start of the COVID-19 crisis was likely due to a hoarding response, which is an instinctive psychological bias response found in nature. Hoarding is not always negative, in this case those that bought lots of toilet paper and hand sanitizer were mo…

Psychological research can inform our behavior during the COVID-19 pandemic. How do we decide what is the most effective response and how we will act? Follow along with the research article from Nature Human Behaviour “Using Social and Behavioral Science to Support COVID-19 Pandemic Response” (link below). First, as humans we have a tribal response…

Jan. - Feb., 2020 was a period of ‘psychological inoculation’, in that we have heard this before, viruses come and go, like the flu and N1H1, and we will be okay.March - April, 2020 was a period of acknowledgment, that this virus is real and dangerous. Followed by the rapid onset of fear, resulting in a stress response. Fear is usually a quick mome…

Norepinephrine sends signals widely throughout the brain that move us into a task motivated stated. A brain regain called the locus coeruleus located in the brain stem is involved in the release of norepinephrine. As we shift to a more passive state, another type of brain cell called astrocytes take over (they get their name from their star shape).…

Global economy has stalled in early 2020 due to COVID-19 and governments have provided stimuli. The stock market has rallied; SMP is up from the bottom which is the most dramatic rise of the market EVER! CONCERN: exuberance in the market does not take into account the return to normal, as there is a new normal, which is still unknown. Narratives fi…

African Swine Fever in China has depopulated the hog heard in China. China is responsible for 50% of global production and consumption of pork. The coronavirus was completely unexpected and has further impacted the pork market with meat packing plants closing due to workers and their family members, sadly becoming ill or dying from Covid-19. Closur…

Our basic human values drive us and drives up our oxytocin levels in our brain. Provided are applied examples of values in the investing world. We consider the basic human values by Shalom Schwartz tying together and the interesting relationships among the different values.We talk conservatism, openness to change, benevolence, universalism, achieve…

Analogies help our brains understand a current event often using a past event, but with our brain filling in unknown gaps and creating possible dangerous inferences. Comparisons between the flue, N1H1, SARS, 1918 flu or even 9/11 are likely dangerous for understanding how society and investments will be impacted. Current events are different than p…

How do we think psychologically about numbers? Especially in relation to the Covid-19 2020 pandemic and the impact on the stock market. Take into consideration the effect of the Anchoring bias and Base Rate Neglect in your mental model and decision making. A recession will come following the 2020 pandemic along with changes in behavior which will u…

Biases investors need to be aware of include ILLUSIONS OF INVULNERABILITY and ILLUSIONS OF CONTROL. Due to years of investing success investors feel invulnerable and are making decisions from their mental model which needs recalibration, along with the bias Illusion of Control. For more on this topic explore FIVE STAR reviewed book “Understanding B…

Our basic human values drive us. In this episode we discuss values in detail from both an investing and psychological perspective. Our mental models of other people’s behavior and our own can helps us to predict steps management might take in a company that we are considering purchasing. We discuss a variety of the basic human values outlined by Sc…

Do you have the will power to keep from buying that stock too early? Humans need the will power to delay gratification - how do we get it? Discipline is important to success. Walter Mischel’s, research which is commonly called the “Marshmallow Test” with preschoolers and self-control provides great insight. Video of Marshmallow Experiment https://y…

The keys to flexible thinking come from exploring the different solutions to a problem vs. exploiting the rewards, resulting in perseveration behavior. In this episode we explore the ‘set effect’ which is linked to problem solving. An example of successful flexible thinking and over coming the ‘set effect’ is when Warren Buffet realized that invest…

In this episode we consider how our memory systems are organized and what we can do to help become better at remembering in a variety of areas of our lives. We consider memory from a multiple memory systems approach focusing on working memory- our short-term store. Working memory has a clear limit and we can use a “chunking” strategy to group items…

Selection Bias can keep us hunting for what is most present on our mind, Waldo or the new Toyota we are planning to buy. Once we have committed to a decision we will see that specific brand everywhere. We are experiencing selection bias. Our brain is guiding us to what is most present on our minds. “The Invisible Gorilla” book by C. Chabris and D. …

Be the courageous investor! Fear linked to 3 things:1: To little information2: Potential Threat3: HelplessnessInvesting is linked to 2 things:1: Fear2: Greed The Salience Bias is linked to fear and uncertainty and your primal brain functions in your amygdala. There are 2 types of cognition 1)hot and 2)cold. Hot cognition is primal and linked to lym…

Rationalization and thesis drift is akin to wrestling with muddy pigs... it’s slippery and you will lose $$$. For investors ”thesis drift” is the tendency to rationalize bad news and come up with fresh reasons to still like a stock. Don’t accommodate your viewpoint for a group of facts that you were not previously aware of. Consistency Bias: don’t …

“Understanding Behavioral Bia$” follow along with book by Dr. Daniel Krawczyk and George Baxter, JD, CFA, (Chapter 8) while listening to this podcast. BUY on Amazon https://amzn.to/2XHtsOE (copy and paste). This podcast is fifth in the investment process series. It is the planning up from the matters. #1 tip to avoid pain is to use stop loss techni…

Recap of general market trends experienced in 2019 and interpret what they might mean for the economy in 2020. The expansion is the longest we have see, we are now beyond what it occurred from 1990-2000. Growth has been tepid so it might continue. We discuss economic indicators and historical trends from the past. BUY BOOK “Understanding Behavioral…

How politics might influence the stock market in an election year! All of this while the standing president of the United States is under investigation for impeachment by the Senate. What are your predictions for the next president of the United States of America? Which stocks do you seeing impacted? @ 11:30 minutes George discusses his stock pick …

There won't be any regular episodes of Mental Models Podcast as we take a holiday break. Regular service will resume the first full week in January 2020. In the meantime, enjoy a holiday message and we have recapped a popular podcast on Behavioral Bia$. Join Dan and George at the Center for BrainHealth, Dallas, TX on 1/23/20 as they discuss “Money …

“Understanding Behavioral Bia$” follow along with book by Dr. Daniel Krawczyk and George Baxter, JD, CFA, (Chapter 8) while listening to this podcast. BUY on Amazon https://amzn.to/2XHtsOE (copy and paste). Fourth in the series on the investment process - with top fund manager tips of the steps of analysis and execution. Biases to be aware of are r…

Follow along with our book “Understanding Behavioral Bia$” by Dr. Daniel Krawczyk and George Baxter, JD, CFA, (Chapter 8) while listening to this podcast. BUY on Amazon https://amzn.to/2XHtsOE (copy and paste). Electronic version and paperback.The purpose of fundamental research during the investment process is to understand the cooperative positio…

Book review and origin story of "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making”. This book is a great tool to improve your investing skills. This is not a list of biases, but a guide that provides best practices to overcome biases when investing. Remedies to each bias are included. Learn about these biases and be abl…

Idea vetting is the second step in the Investment Process - how to improve your process and what Biases are keeping your from your financial and investing goals. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance advice and solutions. #mentalModels More information at https://www.mentalmode…

Investment Process new series (3 parts) from Mental Models Podcast. Talking you through each step of the investment process, starting with idea generation and associated biases. Watch out for episodes II and III of the Investment Process. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavioral finance a…

Biases can come about and trip up your investing decisions when your moving to fast. Incorporate speed bumps into your process, such as a check list. Have a coffee (or a scotch) and think through your process! There is an upside to biases - consider the slow mode advocated by Daniel Kahneman.BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsO…

In the investing world some very distinctive feature are alerting you to a particular opportunity or something to be concerned about - Peaking your Curiosity. Base Rate Neglect Bias: Try to think in probabilities when ever possible, because there are so many statistics out there. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Beha…

Passive index funds (ex. S & P 500 can be over performed if an edge can be found. Ways to avoid bias in active and passive management. Episode #29 is discussed in our new book "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making", specifically Chapter 8. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Beha…

A discussion of Bill Gate's mental models as observed in the 3 part documentary series on Netflix: "Inside Bill's Brain: Decoding Bill Gates". Bill Gates mental process protects him from a variety of cognitive biases, such as base rate neglect. Other biases discussed in relation to Bill Gates mental process include survivor bias, Illusion of contro…

Artificial Intelligence Part 2 with Mike Hughes from OutSystems in Portugal discussing uses of AI in investing, business and court proceedings as the AI judge! BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK by your hosts of Mental Models Podcast | Behavioral finance advice and solutions. More information at…

Artificial Intelligence enthusiast Mike Hughes discusses a range of topics including machine learning and the future of computing. Part 1 of a 2 part series in AI and investing. Mike is an accomplished "IT Renaissance Man". Mike is part of the OutSystems success story, which helps clients to become their own success stories using OutSystems low-cod…

Consider the "bias luggage" that comes along with your frame and the frame of the market while investing and making investment decisions. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK by your hosts of Mental Models Podcast | Behavioral finance advice and solutions. More information at https://www.mentalmod…

The landscape of value investing has changed due to the availability of information. The rapid increase in information on businesses, stocks and more is decidedly liked to technology. The information highway has changed the process of value investing. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finance BOOK | Behavio…

Value investing from Benjamin Graham to the lessons of Warren Buffet. Followed by what the picture is NOW. Review of modern day investing and how the landscape has changed and where the methodologies of these giants are still correct today and where they might not be. BUY “Understanding Behavioral BIA$” http://amzn.to/2XHtsOE | NEW Behavioral Finan…