Joe Wiggins is the excellent author of the Behavioural Investment blog and the newest guest on the TVP Pod. He's interviewed by Andy Evans and Liam Nunn who discuss how Joe's background in sociology and behavioural science has helped him advise investment managers. He stresses how behavioural issues are important to investment outcomes and being conscious of those behaviours and biases can help all investors - from retail to professional.
Minutes:
1:08 Episode Intro
1:50 Joe's background
3:47 What are the most common behavioural issues?
5:57 Are there any biases that are unique to investing?
7:22 Outcome Bias and thinking in probabilities
10:14 The prevalence of overconfidence - what can fix it?
12:33 Process v. outcome - how can investors learn more from mistakes?
15:19 The consideration of time - why do we struggle with time horizons?
20:17 Do professional investors feel the need to be constantly active?
23:42 Has the approach to behaviour bias in finance evolved at all in recent times?
26:28 How can we improve decision making?
28:13 Examining decision making in other industries
32:49 A bad outcome that came from bad process and book recommendations
Book recommendations:
The dog and the frisbee by Andrew Haldane
Gut Feelings by Gerd Gigerenzer
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