Why I Will Always Be A Better Investor Than You
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- เผยแพร่เมื่อ 25 มิ.ย. 2024
- 👉🏻 Looking for help with Financial Planning?
I am a Chartered Wealth Manager and Partner in a financial planning practice based in the UK. If you would like to find out more about working with us, please follow this link: go.novawm.com/getintouch
This video is all about the fascinating world or behavioral finance. Learn why I will always be a better investor than you, and what you can do to be more like me.
In this video we cover:
- Cognitive Bias
- Anchoring
- Framing
- Risk Aversion
Emotional Bias
- Overconfidence bias
- Regret Aversion
If you found this video interesting, I highly recommend reading Daniel Kahneman’s fantastic book Thinking Fast & Slow:
www.amazon.co.uk/Thinking-Fas...
DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice - James is not responsible for investment actions taken by viewers. Please seek out a regulated advisor if you require assistance (whilst James is a financial adviser, he does not provide advice through this TH-cam Channel, which is not affiliated with his employer).
James Shack™ property of James Shackell
Copyright © James Shackell 2021. All rights reserved.
The author asserts their moral right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this channel and any video published on it.
Which bias do you relate to the most?
“The investor's chief problem, and even his worst enemy, is likely to be himself” Benjamin Graham.
@@ScipioAfricanus809 the technical knowledge required to invest is very basic. But investing is actually very hard, because of this 👆🏻.
Risk aversion. I'm a coward and the fear of losing my money was kept me away from investing for the longest time. Even when interest rates fell below 1%, I still opted to keep saving because at least there was no risk of losing my money in a savings account and then I learnt about inflation. 🙃
I'm too optimistic and believe in a companies story quite easily when it is covered in some article or whatever. Is there a bias for that? I have to have a rule where I don't buy anything unless I have sat on it for a day or two first. Great vid by the way!
I was very risk averse up to March 2021, then during lockdown started watching and learning about Index funds. It is scary, that I had so much ready cash roughly 50% cash 50 % in HL ISA and Sipp. Everything is with Vanguard now. I have increased my portfolio by 41% (8% is growth), the rest from cash invested. Currently got plenty of years cash for backup if anything goes wrong, so in August I have 30k maturing out of a Fixed Rate Account, so will be looking to invest that.
I already have a lot in the S&P 500, some in ESG and might look at the U.S. Equity Index Fund - Accumulation for the 30k.
I eventually want to get myself down to 2 years worth of ready cash, which I know is still probably too much.
Also always watch your videos to the end, keep up the great work
" If you can't control your emotions, you can't control your money" - Warren Buffet
I love this! I used to sit through movies I wasn't enjoying just to get my money's worth or eat a meal I wasn't enjoying for the same reason. It's ridiculous. You're right, we need to think more clinically and cut our loses.
James - Yes I always watch these videos to the end... I find them really informative.
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Yes - watched to the end. Always enjoy your videos.
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Im a big fan James...........great stuff buddy
Cheers Will , thanks for the support!
Thanks for your good advice. We all need to hear this line of thinking over and over.
👍I listen to the end because what you say is informative, interesting and fun too.
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👍 love your content James. It's so great to have a professional, calm opinion through all the noise around finance. Keep it up!
Cheers Charlie!
Hi James thank you so much for putting the time and effort into these lectures, the information, insight and perspective are fantastic, it makes me wish I’d learnt more about financial education when I was younger, and the missed opportunities I could have benefited from with some simple guidance early on in my financial career.
Hey no problem! Just make sure to share!
Great stuff, James, thank you. The probability questions were unfair though. Probability only works statistically if the same bet is taken multiple times. You did not ask the question that way. You implied the listener was just making this bet once ("Which would you rather"), not multiple times. Obviously someone will only choose the chance not to lose rather than the sure lose if someone only has one stab at it. Just like most people would choose the sure win of a slightly lower amount than the gamble of a slightly higher amount, IF they only get one chance. The statistical analysis is only valid when the dice is rolled multiple times. Most of your stuff makes sense but this was utterly invalid because of the trick you played in the wording of the test questions. (I would give you a thumbs up but emoticons are a pain in the arse on this system.)
Another great 'hit the nail on the head' video. Thank you!
Another great episode from James, and of course, I watched until the end 👍
👍 informative as ever James, always look forward to your videos.
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A good investor is a person who continues to regularly invest and invests in the long term . If you genuinely believe that a stock is under valued then it is always a good idea to invest in it, especially when there is a downturn in the markets. The more you buy and sell, the greater the risk of under performing but the more you buy and hold, the greater the chance of at least matching the markets the longer you hold on to the stocks. Patience is a virtue
👍🏻 The discussion about aversion to risk of losing money reminded me of the story recently where a US men’s football team took a risky contract but the women’s team negotiated for a less risky contract.
Nice one James - subbed and watched to the end.
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👍🏻 great content!
By the way, regarding your bets examples, I think more time should have been placed on the statistical analysis. Some of these bets make lots of sense on a repeated instance, but become risky if you know the occurance of it is limited to once. For instance, a 50/50 probability of either losing 1000 or winning 5000 is a good or bad bet depending on (1) how much 1000 is of your total assets and (2) how many times your repeating the bet. If 1000 is, say, 80% of your assets and you do the bet only ONCE, the value of those 1000 far exceeds the potential benefit, because 50% of the time you will become broke. Now of you know its a bet you can repeat, say 10 times, it becomes a no-brainer because the bet is free money at this point. Therefore the probability calculations are important for the decisionmaking.
Thanks for the feedback Tommy, yes I’ve heard that from others . it seems I didn’t quite frame is all correctly.The reference point of how much money you have certainly affects decision making.
👍I watch everyone of your videos from start to finish. Very informative and thought provoking. It would be great to have a video on more exact details about the processes you mention to avoid our cognitive bad behaviours.
Hey Raj, thanks for the continued support! I'll get round to that for sure!
👍🏽 always watching to the end. Very informative as always James
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Always watching til the end, so informative! 👍👍👍
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And again, you've smashed it out the park. Quality is definitely greater than quantity. I watched to the end as always. Found this really informative and really just corroborates the fact that direct debits or standing orders into investment funds are the best option.
I think the riskiest part (for me atleast) is when it comes to the annual or semi annual re-balancing.
Could we get a video on that?
Haha! Thank you. Yes i've started to realise that it's worth slowing down and even doing 2 vids a month just so you can put more thought into the ideas! Yep, I'm gonna do one on that very soon. Some title like "Why you should sell your winners and buy your losers"
I watched to the end. I found behavior to be more important than the actual mutual fund or ETF I own. 2020 was a great example.
Yes indeed. Unfortunately this can only be learned through experience, it can’t be taught!
While I agree with what you say, I wouldn't be so harsh on people that took out their savings when everything crashed in March. Not everyone was fortunate to be employed, lots of relationships were tested, and for corporations, no one knew quite what they were in for. But yes, it's better to hold the course than take a loss.
👍 big thumbs up...didn't want it to end. Great to see a good uk investment channel. Keep up the good work...feel like I need to see a financial planner now lol
I feel like you’re speaking directly to me thank you very much for your education!
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These are actually good life lessons, not just with investing. One of the better videos out there. I like how you got my attention with the click bait offensive title :)
Haha glad it worked!
Agree. The videos are simple enough for the average Joe to understand and really should be taught in school mandatorily.
Excellent channel. Wish I discovered it at 26 not 36 but nevermind. I at least now have money to invest.
it was offensive to me until you clarified that youre better with my money vs myself. im a god trader and investor and next meme follower
Haha, so I’m guessing you relate most closely to Overconfidence bias ?!
Everyone’s thinks they’re a genius in a bull market 🙂
Great video! Whew! You almost TIED ME! 😂
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Really enjoyed listening to how we can be our own worst enemy and these cognitive biases apply to so much that we choose to watch online. Thanks James 👍🏽
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👍🏻 Great content again James - it’d be interesting to see how people’s risk aversion changes when the potential loss increases. I imagine many more people would happily risk losing $100 from a coin toss for the chance to win $150, compared with those who would accept the risk of losing $10,000 against winning $10,050 even though the expected return would be the same. And if you could toss the coin infinite times of course you’d be crazy not to accept the bet.
Hey! So typically it falls off between 1.5-2 times the loss. So $100 loss for $150 gain up to $100 for $200 gain. After 2x it really drops off. This is a test of people's attitude to risk.
You should check our Daniel Khaneman's book Thinking Fast and Slow. It goes way deeper than what i've done here and across even more biases
Watched to the end! Great video :-)
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Thanks James!
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Great video James - i rewatch it often 👍
Thumbs up, watched to the end.
Watched it till the end. Great video as usual.
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I love your videos James. Thank you 😍
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Mind Blown! Thumbs up! Wink!
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Yet again another great video. Food for thought!!
To the end. Your video length is spot on and engaging throughout.
Cheers Lee! Much appreciated!
👍👍Another way to get out of the "dont sell at a loss" mode is to view each stock/fund like a traffic jam. All the other lanes are moving faster than yours, so just switch lanes. Then switch again when the current lane stalls (obviously not immediately for investing, Id give it a few months). If you jump back to your original stock/fund in a few months time, wont you be ahead compared to not changing lanes? 👍👍
👍 Love the clarity with which you explain things
Thank you for saying so!
Sent your last video to a friend and he instantly subscribed 👍🏻
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Hi James! I watched till the end. I know what you did there. 😉 That's another subtle "lesson" I just learned. Thank you.
👍 Thank you for your videos!
👍 Thanks for the lesson
I did!!!! And I agree with everything you have said!!!
👍👍👍👍👍...! Watched it all. 10/10 as always, James.
Very interesting topic and why I take a hands off approach to investing. I watched to the end 👍
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👍🏼 always watch to the end.
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Really good and intriguing stuff. thumbs up!
👍 I enjoyed this video more than you did! 😀
I could have listened for another hour- so many truths, we all fall into the traps but great when someone takes the time to tell you where they are 👍
Watched to the end! 👍
I watched to the end James!
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👍 Great stuff. Thank you.
👍Good stuff - thanks
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Excelent video. Really makes you think👍
Hi James....Your contents are fantastic. I feel myself lucky to subscribe to your channel....
You’re welcome !
👍🏼 Thanks for your excellent explanations.
My pleasure!
👍🏽 Useful content, with great visual representation as always. Keep it up
👍👍Great video, thank you 🤘
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Old but...👍 appreciating the content
👍 great content very well delivered, thanks James.
👍 I now find Netflix binge watching even more counter productive than before.
Cheers, Jamasaurus Rex!
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Thanks James another great video
Another excellent video...eye opener!
👍really enjoyed this, very interesting
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👍 Thanks. Love the vids!
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Great video…. I had never heard of anchoring, now I can totally see clearly what it is. I was looking at a DFS sofa…..anchoring right there!!!!
Great content very well presented
👍 At the moment the thing I'm mostly affected by is Confirmation bias. I came here following one of your links that I thought would take me to a video on Factor investing. I'm glad I stuck around to the end of this video though.
Thanks James 😃👍
You're welcome!
Always watching to the end … most enlightening for us amateurs …good job …
Thanks George!
👍 thanks James!
Watched to the end.
👍- Another great video. Thanks James
👍 Great video James!
Another great video, James - dealing with an aspect of investing that isn't covered as much as it should be. Love the provocative title and yes, I watched all the way through to the end - it would be rude not to 🙂
Your content is excellent!
Great
Good one, James :)
Great video, I read Daniel Kahneman Thinking Fast and Slow; and Nassim Nicholas Taleb Black Swan etc...your ideas fit perfectly with their observations.
👍🏽 another great video. Always watch to the end
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👍watched till the end
Ah yes, a Daniel Kahneman fan :) Good stuff...
Love it!
Watched it to the end!
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great video - thanks
👍 60 years old UK guy just retired from teaching and doing part time work to avoid taking too much of my pension pot. I watch a lot of your videos James. Very interesting
To the end - great video. Really good fun.
Glad you liked it!
👍Nice take on the realities of investing for general folk. Good delivery James.. Kept my interest!
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Thumbs up!
👍 love it, the argument of EV is also so relevant also in matched betting where people go through the same emotions as financial investing.
Yes indeed!
Yes a very very great tactic to discipline the own emotions!
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👍another great lesson- thanks James!
Brilliant, I really love the psychological aspect of investing..plz make more of these..keep up the good work
I will try!
Great video and sooooo true
👍Good points
Great video, I watched to the end. I like they way you explained it.
👍 Great stuff, thanks for posting!
👍good one James thanks.
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