Experimental Economics and Market Bubbles in the Lab
Can you grow a stock market bubble inside a classroom? Not a metaphor. An actual bubble where prices rise above what everyone in the room knows the thing is worth?
Latest published articles
Flash Boys Chapter 8 - The Real Trial of Sergey Aleynikov
This chapter hit me different than the rest of the book. Maybe because Sergey Aleynikov is from the former USSR, same as me. Maybe because I spent 20 years in IT and know what it feels like when non-technical people judge your work. Probably both.
Investing Psychology Chapter 8: Debunking the Money Myths
We’re nearing the end of Tim Richards’ “Investing Psychology.” In Chapter 8, he tackles the myths that keep us trapped in bad financial habits.
Volatility Surfaces: Smiles, Skews, and Local Vol
You look at the market. Calls with the same expiry but different strikes have different implied volatilities. The Black-Scholes model says this should not happen. Constant volatility means one number for all strikes. But the market does not care what Black-Scholes says.
Flash Boys Chapter 7 Part 2 - IEX Goes Live and Goldman Makes a Surprising Move
In Part 1 we talked about the misfits Brad recruited to build IEX. Now we get to the good stuff. They launched it. And then Goldman Sachs did something nobody expected.
Investing Psychology Chapter 7: Building a Better Process
We’ve spent a lot of time dismantling our egos and exposing our biases. Now, in Chapter 7, Tim Richards gives us a toolkit to build something better. He calls it “Good Enough Investing.”
Neuroeconomics - Your Brain on Money Decisions
You know all those behavioral biases we talked about in earlier chapters? Loss aversion, status quo bias, overconfidence. The big question hanging over all of them is simple. Where do they come from? Are we born with them? Did we learn them from our parents and culture? Or is there something deeper going on inside our actual brains?
Volatility Modeling: The Big Picture
You cannot see volatility. You cannot touch it. You cannot even measure it precisely at any given instant. And yet, it is the single most important input in options pricing. Get volatility wrong and nothing else matters. Get it right and you can make a lot of money.
Flash Boys Chapter 7 Part 1 - The Misfits Who Built a Fair Stock Exchange
Chapter 7 is called “An Army of One.” And it starts not with trading algorithms or secret cables. It starts with a guy on the subway on September 11, 2001.
Investing Psychology Chapter 6: Proving Yourself Wrong (Part 2)
Continuing our look at Chapter 6. We know we need to look at the numbers. Now let’s look at the specific mental exercises that can save your portfolio.