Richard Thaler
Richard Thaler
Richard H. Thaleris an American economist and the Ralph and Dorothy Keller Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business...
thinking people recalls
Recall that people like to do what most people think it is right to do; recall too that people like to do what most people actually do.
optimistic skills people
People exaggerate their own skills. they are optimistic about their prospects and overconfident about their guesses, including which managers to pick.
writing should-have games
The same with the mortgage brokers that were selling people mortgages they couldn't afford. We shouldn't pay them on each mortgage they write. They should have what they call "skin in the game," where they've got to reimburse us if the guy who sold the mortgage defaults.
thinking giving risk
I think one lesson we have to learn is that there's a lot more risk than we're giving credit to, a lot more what economist calls systematic risk.
retirement credit debt
Maybe you'll take the cash out. So a credit card company or a bank that goes into the business of saying we're going to be the broker, we're going to sell you a mortgage that you're going to be able to pay off, we're going to help you reduce your credit card debt, we're going to help you save for retirement, we're going to put you into mutual funds that have low fees rather than high fees.
money ties gold
Why tie to gold? Why not 1982 Bordeaux?
empowerment easy empirical-evidence
I'm all for empowerment and education, but the empirical evidence is that it doesn't work. That's why I say make it easy.
rare-events swans giving
So the world is much more correlated than we give credit to. And so we see more of what Nassim Taleb calls "black swan events" - rare events happen more often than they should because the world is more correlated.
people longevity economist
Most economists, including me, agree that longevity insurance would make sense for a lot of people.
rip naps years
Rip Van Winkle would be the ideal stock market investor: Rip could invest in the market before his nap and when he woke up 20 years later, he'd be happy. He would have been asleep through all the ups and downs in between. But few investors resemble Mr. Van Winkle. The more often an investor counts his money - or looks at the value of his mutual funds in the newspaper - the lower his risk tolerance.
thinking people reason
There's no reason to think that markets always drive people to what's good for them.
class two oil
LTCM lost money when Russia defaulted on a certain class of bonds, and then they had other investments like on the spread between two different kinds of shares of Royal Dutch Shell Oil Company. Now that seems completely unrelated to Russian bonds. But they were related because other hedge funds saw similar discrepancies and they were all making similar bets.
choices action cases
There are cases when I can make myself better off by restricting my future choices and commit myself to a specific course of action.
differences car mind
Investors must keep in mind that there's a difference between a good company and a good stock. After all, you can buy a good car but pay too much for it.