Behavioral Finance

226 Posts

Aswath Damodaran: The Most Reliable Investment Valuations Balance Numbers and Narratives

Aswath Damodaran: The Most Reliable Investment Valuations Balance Numbers and Narratives

When it comes to valuing stocks, the most reliable valuations come from imaginative number crunchers and disciplined storytellers, says Aswath Damodaran. And too often pure “numbers” people drift off into what he calls “spreadsheet nirvana.” Similarly, investors who focus purely on the narrative of a potential investment run the risk of quickly “veering from reality to fantasy.” Damodaran urged investment managers to bridge the gap between numbers and narratives, insisting that the best valuations are not just “a collection of numbers, but a story connected to numbers.” Read more

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Everything Is a Meme

Everything Is a Meme

When certain memes appeal to our belief system, we expose ourselves to a wide range of behavioral psychology problems ranging from confirmation bias, to framing, to social proof, to authority influence, to meme validation, to cognitive dissonance. The list goes on and on. In short, a well-constructed meme can make us gullible. Read more

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