Psychology

People underestimate their personal probability of encountering negative …it is not so much that individuals believe that negative events will not happen, but rather that these events are relatively unlikely to happen to them.

Former Premier of New Brunswick & Canadian diplomat and businessman

He told me that his returns got so much better in the Bahamas, why? Because he got the Wall Street Journal a few days late! It's so difficult to mentally distance yourself from the herd and so perhaps physically distancing yourself from the herd is a good idea.

Value investor and niece of legendary investor John Templeton

I genuinely believe that you can train yourself to see trouble as opportunity and realise that the best time to make money is when other people are most fearful.

Value investor and niece of legendary investor John Templeton

The point of maximum pessimism is the ultimate time to buy a stock because at this point, all the sellers are gone… and only buyers remain. How do you determine this point? Even Uncle John said it's impossible…. You never know until it has passed!

Value investor and niece of legendary investor John Templeton

Human beings have a real tendency to overreact on the upside and the downside. We are not rational investors. I do not believe that people make rational financial decisions! If you study financial decision-making you will find that human beings are irrational in a very predictable manner.

Value investor and niece of legendary investor John Templeton

We tend to see two scenarios that come up time and time again. The first and most common scenario is that security prices become inefficient or show large departures from intrinsic value when there are few investors paying attention to the company. The second is a crisis situation. Uncle John always had a desk-plate in his office that said 'trouble is opportunity' and that's very much how we see the markets.

Value investor and niece of legendary investor John Templeton

You actually see behaviours that show this when people say, 'Oh don't show me that photograph or film, I can't bear to watch that because I love my steak!' When else would we say that? Would you hear people saying, 'oh don't show me those child labour photographs because I love my nighties!' These behaviours are an admission that we know something is wrong.

Founder and President of People for the Ethical Treatment of Animals (PETA)

Imagine you have to walk through a field that has a few land mines scattered through it. If you walk through it and nothing happens, it seems there is no danger. If you walk across it enough times, you'll step on a landmine. Traditional risk management simply fails to account for the fact that the most dangerous risks are those which occur infrequently and don't show up in track-records.

Author of Market Wizards & Hedge Fund Expert

If you asked most people to categorise good trades and bad trades, you would find the answers to be quite simple… If it makes money it's a good trade, and if it loses money, it's a bad trade. That's not true at all… There's a very simple test to see whether something was a good or bad trade. You have to ask the question: 'If I was faced with the exact same information and circumstances again, would I still make the same trade?'. If the answer is yes, then it was not a bad trade.

Author of Market Wizards & Hedge Fund Expert

To me it was an adventure. I'm a hardened explorer and adventurer, and I remember the whole mission as an adventure with some awesome experiences and beautiful sights.

Astronaut on Apollo 16 Moon Landing Mission

Once you land, it's total excitement, 'I'm on the Moon!' – you're bubbling with enthusiasm like a little kid on holiday. I thought the Moon was just awesomely beautiful. It was stark, barren, lifeless… yet it had this beauty like the desert.

Astronaut on Apollo 16 Moon Landing Mission

It has certainly affected the appetite to investors to engage in LIBOR denominated contracts. Financial markets depend on trust, and we had precious little trust as it was. The LIBOR scandal has done nothing to restore that trust.

MIT Finance Professor & Pioneer of Quantitative Finance & Behavioral Economics

inspires because it has a huge emotional component, everybody feels very attached to it. At the same time, it's incredibly complex- and full of mind-bogglingly stupid things that make it more complex than it needs to be

The easiest piece of advice to give, but the hardest to follow- is to not let yourself get swept up in the next bubble. You could have said that about tech stocks in the 90's, housing prices around the world in the early 2000's… but people always got swept up in them. The history of financial bubbles does not give cause for optimism.

Prominent Economist & Former Vice Chair of Federal Reserve Board

There's a disease shared between individuals who consider themselves the smartest people in the room that makes them think they'll be the ones that get out just in time, while others are left holding the bag. That was true for a few people, but in general… someone will always be left holding the bag.

Prominent Economist & Former Vice Chair of Federal Reserve Board

Research has shown that when you compare the effect of a 1% change in unemployment rate and 1% change in the inflation rate; a 1% increase in unemployment has a bigger impact on people's happiness than a 1% increase in inflation.

Economist known for the Easterlin Paradox on income and happiness