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Why is paying for things painful? Why are we comfortable overpaying for something in the present just because we’ve overpaid for it in the past? Why is it easy to pay $4 for a soda on vacation, when we wouldn’t spend more than $1 on that same soda at our local grocery store?

We think of money as numbers, values, and amounts, but when it comes down to it, when we actually use our money, we engage our hearts more than our heads. Emotions play a powerful role in shaping our financial behavior, often making us our own worst enemies as we try to save, access value, and spend responsibly. In Dollars and Sense, bestselling author and behavioral economist Dan Ariely teams up with financial comedian and writer Jeff Kreisler to challenge many of our most basic assumptions about the precarious relationship between our brains and our money. In doing so, they undermine many of personal finance’s most sacred beliefs and explain how we can override some of our own instincts to make better financial choices.

Exploring a wide range of everyday topics—from the lure of pain-free spending with credit cards to the pitfalls of household budgeting to the seductive power of holiday sales–Ariely and Kreisler demonstrate how our misplaced confidence in our spending habits frequently leads us astray, costing us more than we realize, whether it’s the real value of the time we spend driving forty-five minutes to save $10 or our inability to properly assess what the things we buy are actually worth. Together Ariely and Kreisler reveal the emotional forces working against us and how we can counteract them. Mixing case studies and anecdotes with concrete advice and lessons, they cut through the unconscious fears and desires driving our worst financial instincts and teach us how to improve our money habits.

The result not only reveals the rationale behind our most head-scratching financial choices but also offers clear guidance for navigating the treacherous financial landscape of the brain. Fascinating, engaging, funny, and essential, Dollars and Sense provides the practical tools we need to understand and improve our financial choices, save and spend smarter, and ultimately live better.

Bio: Jeff Kreisler is a typical Princeton educated lawyer turned award-winning comedian, best-selling author, international keynote speaker and champion for behavioral economics.

In this episode of Trend Following Radio:

• Human Irrationality
• Hoarding Toilet Paper
• What is Money?
• Behavioral Science

Mentions & Resources:

• Jeff Kreisler
• Dan Ariely
• Daniel Kahneman
• Dollars and Sense: How We Misthink Money and How to Spend Smarter
• Get Rich Cheating: The Crooked Path to Easy Street
• Vernon Smith
• Coronavirus
• peoplescience.com

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Hi Michael,

Absolutely love your work and coverage of what we’re experiencing through your guests. I love your bluntness and no BS and sugarcoating attitude. The world needs more of that. I know you’ve had guys like Ed Seykota and Salem Abraham on your podcast before, and it would be a gem to hear their thoughts on the current situation and have someone like yourself pick their brains again. You might have heard of him, but [name] might be an interesting guest for you to have. He’s a big advocate for gold and in a way called the 08 crisis. Just a thought, but love your work and look forward to you future podcast.

Cheers,
Sameer

Thanks!

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Michael,

I loved the interview with Alexandra Carter! It was fantastic. I’m an engineer working at a very high level in the healthcare industry and have to utilize such skills often.

I also owned my own investment advisor business for several years (what brought me to your podcast long ago). In studying the COVID illness for my work, with publicly-available information, I decided to liquidate a majority of my portfolio a week before the shit hit the fan. Whew…

Keep up the great work!

Dave M

Thanks!

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Michael,

I hope you are doing well. I am an old open outcry guy an have been waiting and preparing for these markets for the last 10 years. I am looking for someone to backtest my system. I have ADHD, bipolar, PTSD, and have been sober for over 15 years. That is the long-winded way of saying I am horrible at the “guts” of the technology part of this. I have the rules and the triggers I just need someone to test it. Do you have a recommendation? I am bootstrapping this and documenting it on LinkedIn. Hustle up a couple of thousand bucks (mowing lawns, light work, caddying, etc.) and start trading it… turning it into something big. I am mono-manically focused on your books, Mark Douglas, and not consuming news. I hope this is clear. I would love to chat if you are interested in a good story. Please feel free to give me a call. I don’t answer numbers I don’t know so leave a message or shoot me a text so I know its you. [number]. Have a great day Michael!

Name

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Michael explores the Great Reset weaving in trend following wisdom. Don’t listen if you are asleep.

Subscribe to Trend Following Radio on iTunes

Negotiation is not a zero-sum game. It’s an essential skill for your career that can also improve your closest relationships and your everyday life, but often people shy away from it, feeling defeated before they’ve even started. That’s the perspective my guest today Alexandra Carter brings to the table.

We’ve been taught incorrectly that the loudest and most assertive voice prevails in any negotiation, or otherwise both sides compromise, ending up with less. Instead, Carter shows that you get far more value by asking the right questions of the person you’re negotiating with than you do from arguing with them. She offers a simple yet powerful ten-question framework for successful negotiation where both sides emerge victoriously. Carter’s proven method extends far beyond one “yes” and instead creates value that lasts a lifetime.

Bio: Alexandra Carter is a Clinical Professor of Law and Director of the Mediation Clinic at Columbia Law School, where she has spent over a decade helping thousands of people improve their negotiation skills. She is a world-renowned negotiation trainer for the United Nations, where she has taught dozens of negotiation workshops to hundreds of diplomats from more than eighty nations.

In this episode of Trend Following Radio:

• Negotiation Definition
• Brainstorming Solutions
• Problem Solving
• Landlord and tenant
• Factual Uncertainty – Probability, Ambiguity and Complexity
• Emotional Uncertainty – How we make decisions in life
• Fear and Guilt

Mentions & Resources:

• Alexandra Carter
• Ask for More: 10 Questions to Negotiate Anything
• Coronavirus
• Enron
• Enron: The Smartest Guys in the Room
• 9/11

Feedback in:

Hi,

Firstly, thank you for your site, and all the knowledge and insight it gives.

Your question is what is the biggest challenge, which I think is quite a hard question to answer as a new trader. A single answer would never be able to capture the complexity of the question

5 years ago I embarked on a journey to build a fully automated black box system; whilst I hope to have the skills as a 20yr+ computer specialist, understanding how to apply this to a trading model that could reliably create returns is the real challenge. I have devoted hours of learning, research and trial and error often going down routes that in theory should work but actually deliver no results.

Until recently my system hasn’t been able to deliver consistent results but I have persevered to learn more and to try new things. I have tried unsuccessfully to apply indicators to systematic trading including adding neural networks to aid predictions. Some of these have been based on strategies that I have found online and some derived from my own thoughts.

I have built my own trend prediction module that attempts to understand the major trend, to understand when a correction is happening and to gauge the strength of the trend. I had hoped this would have been the missing piece of the puzzle but alas it wasn’t – at least not on it’s own.

The last few months, as I take some time away from a 9-5 job to work closely on the system, it has started to deliver some much better returns. I have really started to understand about Risk and Money management – things that have been implemented from the start and have grown with the system but until now I haven’t probably fully understood.

Simple quotes like “Cut your losses and let winners run” I have but recently only fully understood. At a high level these quotes seem rather obvious but implementing are rather more cumbersome, and that take something rather trivial to something much more

So to round up and actually answer your question; I think the biggest challenge in trading is to turn something complicated into something simple. Trading is inherently a complex beast, but as the age-old saying goes in computer systems at least, we cannot solve complex problems and instead seek to break down large problems to smaller problems that are easier to solve. My answer is meant to reflect both implementation and to theory.

The strategy that I am using now is rather simplistic and just attempts to jump on a trend and ride it out. It doesn’t seek to open trades at the beginning of a trend, but does attempt to follow the trend as long as a trend is prevalent. I realize now that the opening trade is perhaps less important as to the position size and what one does with trade in regards to moving stoploss and take profits. And thus, I now have a system that is almost working. A system, that as you quote on your website could potentially trade anything due to price action and not knowing about fundamentals or other intrinsic elements about the market.

I had found your site a few years ago, but, to quantify again my learning, back then I didn’t really understand it. Now, armed with a bit more knowledge, I read your site and realize – hey, this is the direction I had already taken of recent – whether on my own or sub-consciously of all the readings in the past.

I’m sure I still have a long way to go, although being close. If I were to try and quantity “close” then I don’t know if close means I’m days or still years away but will keep running on a paper account until I can have at least enough confidence. During this time and after, I look forward to reading your mailings and continuing to learn, so I close by saying thank you for sharing

Tom

But none of that sounds simple. All of it sounds overly complicated…

I still recall a classic quote from a classic trend follower: “Everything we do we could do on the back of an envelope with a pencil.”