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The Great Financial Crisis
The market bottomed on March 9th, 2009, after a 57% drop. The trove of the recession in economic growth didn't come until four months later in June. I'd love for you to tell the story of the hedge fund manager you chatted with during that time. He was just screaming more pain to come. And you actually decided not to make any changes to your client's portfolio.
On today’s episode, Clay chats with John Jennings about his new book - The Uncertainty Solution.
John Jennings is President and Chief Strategist of St. Louis Trust & Family Office, which has $12 billion dollars in assets under management. He is also a member of the firm’s Management Committee, on its Board of Directors, and also serves on the Investment, Risk Management, and Trust Committees. John works closely with client families, advising them in all areas of wealth management.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro.
01:38 - Why humans are hard-wired to avoid uncertainty.
06:40 - Mental models we can use to invest more intelligently.
10:08 - How humans tend to react when faced with uncertainty.
16:56 - Why we are wired to quickly come to conclusions and tend to confuse correlation with causation.
27:17 - How the improbable is much more probable than we might expect.
32:13 - Why the economy is not directly correlated with the stock market.
47:51 - Where investing falls on Michael Maubbousin’s Skill vs Luck continuum.
1:00:53 - How behavior biases like loss aversion and overconfidence affect our investment decisions.
1:06:14 - How storytelling can trick us into making poor investment decisions.
1:10:13 - What base rates are and understanding base rates can help us make more intelligent decisions.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
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