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Classic Ep: How to avoid being eaten by a lion w/ Meir Statman

HOSTS Alec Renehan & Bryce Leske|17 November, 2019

With Ren having to duck off to Fiji last-minute, we didn’t want to risk a dodgy internet feed from his beach-side bungalow. So we’ve dusted off an old, all-time classic episode that we thoroughly enjoyed. It’s an interview with Meir Statman – an expert in behavioural finance. We can’t talk about this stuff enough. Understanding how your emotions work in relation to markets, and how they can impact your decision making, is vitally important, and very hard to master. We hope that by revisiting this episode, it refreshes your thinking when it comes to identifying, and controlling, cognitive bias. Old episode notes below: The stock market can be an emotional place, and often investing decisions are made based on emotion, and sub-conscious thought, or cognitive bias, with returns not always ending well! Recognising and understanding how you think when you invest, and how to avoid emotional traps, is vitally important for long-term success. This episode we talk with Meir Statman – an expert in behavioural finance, and understanding how investors think. Meir Statman is the Glenn Klimek Professor of Finance at Santa Clara University. His research focuses on behavioral finance. He attempts to understand how investors and managers make financial decisions and how these decisions are reflected in financial markets. His most recent book is “Finance for Normal People: How Investors and Markets Behave.” The questions he addresses in his research include: What are investors’ wants and how can we help investors balance them? What are investors’ cognitive and emotional shortcuts and how can we help them overcome cognitive and emotional errors? How are wants, shortcuts and errors reflected in choices of saving, spending, and portfolio construction? How are they reflected in asset pricing and market efficiency? In this episode you will learn:

• The difference between a rose, a watch and a stock

• The major cognitive bias that investors fall victim to, and how to avoid them to improve your investing

• How to make sure you’re not eaten by the lions of the market

• What the ‘greater fool’ means, and how you can take advantage of your investing Equity Mates Investing Podcast is a part of the Diamantina Media Network – the home of Australia’s favorite podcasts. For more information, visit http://diamantina.com.au/


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Meet your hosts

  • Alec Renehan

    Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

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