We all lie, especially to and about ourselves. Sometimes the lies are overt. Sometimes they are unintentional. Sometimes they are sales puffery. And sometimes they are devious. What follows are ten great lies in the financial services industry. The first three are propagated primarily by academic finance.
End-of-the-year best-of lists are an internet staple. Who am I to argue with tradition, especially at Christmas?! So here’s an Above the Market Top Ten of a slightly different sort (not to mention that I have included 11 posts, adding one for good luck). First, here are the top three 2014 posts (by readership) at ATM this year.
Homo economicus is a myth. This alleged “rational man” is as non-existent as the Loch Ness Monster, Bigfoot and (perhaps) moderate Republicans. Yet the idea that we’re essentially rational creatures is a very seductive myth, especially as and when we relate the concept to ourselves (few lose money preying on another’s ego). In fact, we tend to think that we’re almost superhuman in our ability to invoke reason to our advantage.