Pragmatic Capitalism

Capital for Living a More Practical Life

Author Archive

The Great Myths of Investing

This is a guest post from the always awesome Bob Seawright (mostly awesome because he’s from San Diego) As the great Mark Twain (may have) said, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” That’s particularly true in the investment world because… Read More

Pants on Fire: 10 Big Lies in the Financial Services Industry

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.

Seven Things

Brain Pickings is a fantastic site and a wonderful daily read. It has nothing (directly) to say about the markets and investing, but it has loads to say about life.

An End-of-the-Year Best-of Top Ten

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.

Ideological Through-and-Through

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.

Facts (and Minds) are Stubborn Things

Facts may well be stubborn things essentially, but our mental mindset ( a less redundant concept than you might think) means that they are not nearly stubborn enough. That’s because our minds are far more stubborn still.

Beguiled by Narrative

The more we repeat and reiterate our explanatory narratives, the harder it is to recognize evidence that ought to cause us to re-evaluate our prior conclusions.

Trouble in Paradise

It’s a problem that is now — finally — discussed and sometimes dealt with. Increasingly, investors of various type are questioning high-cost, high-risk strategies (often purveyed by hedge funds) because they have performed so poorly.

Proof Negative

We should be spending much more of our time focused upon a search for disconfirming evidence for what we think…