Succinct Summation of Week’s Events 1.24.20 (plus more updating on behavioral finance)

Below is the usual summation for the week, the biggest positive that the impeachment is not really impacting the markets, the biggest negative that the impeachment is a national embarrassment.  (It will be left to the individual reader to decide whether it's the Democrats or Republicans who are responsible for this embarrassment.)  The bonus this Sunday is an article just posted yesterday on Barry Ritholtz's Big Picture blog (you can't get more up to date than that) on the latest in cognitive psychology and how that impacts decision making, a concept that can relate to investments or anything.  It is a 93 minute MiB (Masters In Business) interview with Stanford Professor Barbara Tversky and her new book "Mind in Motion: How Action Shapes Thought" detailing on how the 9 rules of cognition affect thought processes.  Hope everyone enjoyed the weekend. 

Succinct Summation of Week’s Events 1.24.20

January 24, 2020 4:30pm by Barry Ritholtz

Succinct Summations for the week ending January 24th, 2020

Positives:

1. Markets don’t seem to be especially concerned Impeachment;
2. Existing home sales rose 3.6% m/o/m, above the previous decrease of 1.7%.
3. Same store sales rose 5.3% w/o/w, above the previous increase of 5.0%.
4. FHFA house price index rose 0.2% m/o/m, meeting expectations.

Negatives:

1. Regardless, the Impeachment is a national embarrassment; the fall of the US empire continues apace.
2. Index of leading indicators fell 0.3% m/o/m, below the previous increase of 0.1%.
3. Home mortgage apps fell 2.0% w/o/w, below the previous increase of 16.0%;
4. Jobless claims rose 6k w/o/w from 205k to 211k.

1-26-20 MiB: Barbara Tversky, Cognitive Psychologist - The Big Picture

MiB: Barbara Tversky, Cognitive Psychologist

January 25, 2020 9:30am by Barry Ritholtz

This week, we speak with Barbara Tversky, professor of psychology at Stanford and Columbia University, and the author of more than 200 research papers in experimental psychology. Her new book is Mind in Motion: How Action Shapes Thought. It details how the 9 Rules of Cognition affects our thought processes. 

Tversky’s research focuses on visual-spatial reasoning and collaborative cognition. She discusses the interplay of mind and body in enabling cognition. Consider gesture as an example. Tversky argues that gesturing is more than just a by-product of speech: it literally helps us to think. An experiment in her book is to “try to explain out loud how to get from your house to the supermarket, train station, your office or school” while you sit on your hands. It turns out to be very difficult. Without gesture, speaking is difficult, and we occasionally “can’t find the words.” 

Tversky was married to Amos Tversky, and helped Michael Lewis do his research for his book on Amos Tversky & Danny Kahneman, The Undoing Project.

Her favorite books can be seen here; A transcript of our conversation will be available here. 

You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google, Bloomberg, and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here. 

Next week, we speak with Chris Davis, Chairman and CEO of Davis Selected Advisors, which has over $25 billion under management. Davis is also on the board of directors of Coca Cola, and is Vice Chairman of the American Museum of Natural History.

Barbara Tversky’s Book

Mind in Motion: How Action Shapes Thought by Barbara Tversky