My name is Rick Benson, you're I'm CEO and founder of the Benson your group
This is a company that consults to you institutional Wall Street portfolio managers
also last year started an individual investor newsletter to help them get access to
Models that typically only institutions have and I also do performance coaching for financial advisors on the street
Behavioral finance is one of the hottest topics on the streets and more and more major firms Tier one firms
Hauser Street are investing in behavioral finance
They're actually making small departments in this area because they realize there is significance here
The interesting part to me is that and this is really a growth of four Nobel Prize winners in the last
You know since 2000 and that cameraman was 2002 or 2003 Danny Kahneman and Amos Tversky
Won. The Nobel Prize in behavioral science is kind of the first people in behavioral economics. Then you had Daniel Schiller
Maybe I know six years ago and Richard Thaler a couple years ago University of Chicago win for behavioral sciences and economics
So people are realizing just how important the whole
meaningfulness of
psychology, especially as it relates to financial decision making is
apropos to
Anybody who's in this business whether you're a broker or you know financial advisor?
Whether you're a portfolio manager
Whether you're a trader whether you're an analyst how you grew up how you were taught about money and what your relationship?
To money is as you developed into an adult is a critical
influencing factor and how you approach every financial decision you make and so people will know that this
Academic theory has been brought much more into the public limelight people are realizing that Senate for instance
I do a lot of performance coaching to financial advisors
especially on behavioral finance and how to incorporate it into their sales process both for them to better understand their
relationship to finance and then once they can do that, they're much better off being able to have the conversation with their clients and
Introduce certain subject matters that will elicit better responses from clients and the traditional sales
Methodology that a funny central visor would have done 10 15 20 30 years ago
So the conversation itself has actually changed for the better on the streets
I've been using behavioral finance before it even had this fancy name
I realized back in the 80s that the
Psychology and that a lot of this came from being in the pits the guy I stood next to in a stock index ped
printed money every day it was
Unbelievable. Now, we stand the shoulders shoulder for several years. What is he looking at? What is he doing?
I'm looking up at screens other prices the bond market anything that can give me a sense of - ironic
Do I really kind of want to be more of a bitter or seller? How is it that this guy's standing next to me?
He wasn't
Smarter than me
Intellectually, but somehow there was something in him that was able to play this game better and I am in
complete
assurance
That it had to do with the psychology that he walks into the marketplace every day
One thing was if this guy had lost early in the day, he would fight he refused to go home a loser
If I lost a couple of thousand dollars early in the damn like I'm stopping. I don't want to lose any more
It's a bad. Damn. I'm out of sync in the market
So part of it was his tenacity to say I refuse to go home a loser and for several years
He didn't have a single losing day
That's psychology. That's it tenacity. That is a focus that has to do with the success
He was able to build so there is a process there. Is this important level in really understanding yourself your strengths your weaknesses
What you're good at what you're bad at?
Understanding them and
Acknowledging them and sometimes that doesn't come until you're an adult
But like even though the markets I knew after being in the pit for so many years I could sell strength. I
Could sell weakness so I mark is going down. I'll help push it down. I
Buy weakness, but I always had trouble buying strength
I was always afraid that as Mark is moving up if I buy it that's going to be the top and
it's an irrational fear and
The I trade it in the 80s and 90s when the best bull markets there ever was and yet I had the hardest time actually
Being long if I had a chase after the market that stuff you learn yourself and and that knowing that help me over time
so the psychology portion of trading is huge and the more Wall Street kind of finally accepts that
The more they're willing to open their eyes that there are other ways than simply looking at
discounted cash flow a Buddha or anything else of fundamental analysis looking at
Because half of all price movement in the market has nothing to do with fundamentals has to do with everything but fundamentals
You