My guests today are Hersh Shefrin and Arvid Hoffmann.
Hersh Shefrin has done pioneering work in behavioral finance and is the author of Beyond Greed and Fear.
Hoffmann is a colleague of Shefrin. He is a Professor of Finance at Maastricht University in the Netherlands.
The topic is their paper, Technical Analysis and Individual Investors.
In this episode of Trend Following Radio we discuss:
- Covel and Shefrin discuss how Shefrin came to know that behavioral finance was his path; the two-system framework; the connection to behavioral and eating disorders; the disposition effect; when emotion and reason are in conflict; “transferring your assets” vs. “selling a loss”; distinguishing between rules and discretion; how we stick with rules for ourselves given the context of our humanity; the psychological pitfalls of the 2008 financial crisis; the inevitability of market crises; Minsky and Keynes; the psychology of Keynesian economics; and human ideas surrounding uncertainty.
- With Arvid Hoffmann, Covel discusses the paper Technical Analysis and Individual Investors; the inspiration for the paper; Hoffmann’s definition of technical analysis; the narrow focus of the paper to short-term trading; technical analysis and trend following; “invest as if the market was efficient”, and “restrict your attempts to beat the market”
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