Are There Ever Good Behavioural Biases?

Behavioural biases and the effect of human psychology on rational decision making is a topic often discussed in investment management. Both retail and institutional investors are impacted by their psychological wiring, but most of the time the discussion centers around how investors can mitigate the impact of negative behavioural biases on their investment decision making….

Guarding Against Recency Bias

In last week’s issue, we touched upon “recency bias” and how this cognitive phenomenon can provoke irrational trading behaviour in investors. Because of recency bias, investors can be susceptible to what is known as “headline risk,” putting more weight on new information regardless of whether it is valuable or effectively just noise. Enterprising Investor recently…

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

For anyone that is familiar with the commonly used finance phrase “Black Swan”, you can thank Nassim Taleb, who popularized the term in 2001 with his book “Fooled By Randomness”. The main theme of the book is that the scientific methods utilized in financial theory tend to lean towards empirical observation, while deductive reasoning is…

Do Zero-Cost Trades Actually Benefit Investors?

– SPECIAL EDITION -Last week in Sagacious, we commented on the recent move by Charles Schwab and TD Ameritrade to cut trading commissions to zero on stocks listed in North America. Our initial thoughts and comments were on the potential for negative externalities, regarding how market structure may be impacted by brokers selling order flow….

Shoe Dog: A Memoir by the Creator of Nike

For entrepreneurs trying to build their own businesses, Shoe Dog by Phil Knight should be on the top of their reading list. The co-founder of Nike Inc., Knight gives the reader an in-depth look at the grit and determination it took to launch the company back in its early years. He also details the trials…

The Downsides to Zero-Cost Commission

This week, financial services firm Charles Schwab announced that they would be eliminating trading commissions for stocks, ETFs, and options listed on U.S. or Canadian exchanges for clients using mobile or web applications. Though the press release stated the motive was to lower barriers for investors, it was likely done in response to initiatives from…