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Mind over matter?

Episode 7: The uses and abuses of behavioural economics

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Lauren French
Deputy Head of Private Wealth
Andrew van Biljon
Research Director
Rory McIvor
Investment Communications Specialist

What do these theories say about us as decision makers? What are their shortcomings? 

Can behavioural science make us better investors? Andrew van Biljon and Lauren French offer their insights into the world of behavioural economics. 

Further reading

Gigerenzer (2018), The Bias Bias in Behavioral Economics, Review of Behavioral Economics vol 5/3-4

Kahneman and Tversky (1979), Prospect Theory: An Analysis of Decision under Risk, Econometrica vol 47/2

Miller and Sanjurjo (2018), Momentum Isn’t Magic—Vindicating the Hot Hand with the Mathematics of Streaks

Peters (2019), The ergodicity problem in economics

Raviv, (2018) The Genius Neuroscientist Who Might Hold the Key to True AI

Nanayakkara, Nimal and Weerakoon (2019) Behavioural Asset Pricing: A Review, International Journal of Economics and Financial Issues vol 9/4

Choice (2020) What Lesson Can Investors Take from Sir Isaac Newton’s Mistakes?

 

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2021 Q1 Investment Review
April 2021: Looking back over the past year and a bit, we feel a sense of relief Ruffer has performed well through another crisis – protecting clients from the initial covid turmoil, and making good money in the many weathers that have followed. Yet the markets remain our master – they will do what they do, when they do it: we must do our best in that context. And that context is about to change.
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Inflation protection – what’s the right recipe?
April 2021: As we emerge from lockdowns and pent-up demand meets ongoing supply constraints, we consider how different asset classes might fare if inflation does return.
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The Great Acceleration
The coronavirus crisis has accelerated pre-existing tectonic shifts that are changing world order. Four interlinked areas deserve the attention of long-term investors: greater geopolitical instability; the digital revolution; domestic political changes in the advanced economies; and the rise of environmental, social and governance (ESG) considerations.
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The views expressed in this podcast are not intended as an offer or solicitation for the purchase or sale of any investment or financial instrument, including interests in any of Ruffer’s funds. The information contained in the article is fact based and does not constitute investment research, investment advice or a personal recommendation, and should not be used as the basis for any investment decision. This document does not take account of any potential investor’s investment objectives, particular needs or financial situation. This document reflects Ruffer’s opinions at the date of publication only, the opinions are subject to change without notice and Ruffer shall bear no responsibility for the opinions offered. Read the full disclaimer.

Minds over matter
Whilst technology has transformed stock markets over the centuries, they are underpinned by human traits like fear and greed, which remain unaltered. But one key recent change has been to markets’ purpose, and this risks severe instability.
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Investment Review
April 2024: Jonathan Ruffer discusses the stock market’s seemingly invincible summer. This has created distortions in both debt and equity markets, and with them, opportunities to benefit from a change in the season.
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Out of sight, out of mind
April 2024: Markets today are very different to the pre-2008 era. But has systemic risk been removed or relocated?
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London
Ruffer LLP
80 Victoria Street
London SW1E 5JL
Paris
Ruffer S.A.
103 boulevard Haussmann
75008 Paris, France
New York
Ruffer LLC
300 Park Avenue
New York NY 10022
Edinburgh
Ruffer LLP
31 Charlotte Square
Edinburgh EH2 4ET