Ep. 263: Meir Statman Interview with Michael Covel on Trend Following Radio

Michael Covel's Trend Following

Michael Covel

Business, Investing

4.6 • 732 Ratings

🗓️ 8 August 2014

⏱️ 33 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

My guest today is Meir Statman, the Glenn Klimek Professor of Finance at the Leavey School of Business, Santa Clara University. His research focuses on behavioral finance. He attempts to understand how investors and managers make financial decisions and how these decisions are reflected in financial markets. Meir's latest book, "Finance for Normal People: How Investors and Markets behave" has been published by Oxford University Press.

The topic is his book What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions.

In this episode of Trend Following Radio we discuss:

How we make decisions, and how these decisions are reflected in markets
What investors want besides the utilitarian aspect of money
Philanthropy and status
Why Madoff's clients' own greed helped them fall into a trap
Envy and happiness
The fear of losing and the fear of missing out
Mental accounting
Statman's drivers and early influences
Libertarianism vs. paternalism
Social Security and mandatory retirement savings

Jump in!

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I'm MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I'm proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.

To start? I'd like to give you a great piece of advice you can use in your life and trading journey… cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/

You can watch a free video here: https://www.trendfollowing.com/video/

Can't get enough of this episode? You can choose from my thousand plus episodes here: https://www.trendfollowing.com/podcast

My social media platforms:
Twitter: @covel
Facebook: @trendfollowing
LinkedIn: @covel
Instagram: @mikecovel

Hope you enjoy my never-ending podcast conversation!

Transcript

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0:00.0	This is Trend Following Radio, where great thinking comes alive.
0:10.9	Nobel Prize winners, legendary traders, bestselling authors, and the pros that know what drive us irrational human beings.
0:21.2	I am your host, Michael Covel.
0:24.0	Not filtered, raw, honest.
0:27.3	That's my passion.
0:33.6	Before I jump into my guests today,
0:36.5	I want to discuss a really cool sketch by Hugh McLeod at gapingvoid.com.
0:44.8	On one side of the ledger, the left-hand side, he says information.
0:48.5	On the right-hand side, he says knowledge.
0:51.3	On the information side, it's a series of random circles. Some filled with purple,
0:57.3	some filled with green, completely random. On the right hand side, under knowledge, are the same
1:03.4	random purple and green circles, except they're now connected with lines. There's connective tissue.
1:12.6	I thought it was a great sketch, and I know Hugh did not intend it this way,
1:17.6	was probably not thinking of this, but it's a great sketch about fundamental analysis.
1:23.6	You could have all of the data, all of the details.
1:29.3	But they don't necessarily connect to give you something.
1:33.3	Just think about that.
1:36.3	My guest today, Mayor Statman, professor of finance at Santa Clara University, a behavioral finance expert.
1:47.7	His recent book, What Investors Really Want?
1:53.7	Mare goes into, as any great professor of behavioral finance would and should. What drives decision-making,
2:06.6	and how does that decision-making affect markets? It's his life's work. Listen up. I'm sure
2:14.6	you're going to learn something.
	...

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