Using insights from psychology, history, neurology and sociology, Morgan walks audiences through the cognitive biases that cause investors to become their own worst enemies, and explains how understanding your own behavior can be the key to reaching your financial goals.
An expert on behavioral finance and investing history, his presentations combine storytelling with the latest research to discuss the current state of financial markets, the investment industry and personal finance.
Morgan Housel is a partner at the Collaborative Fund, a venture capital firm backing young companies that are moving the world forward. Previously, he was a columnist at The Wall Street Journal and an analyst at The Motley Fool.
He is a two-time winner of the Best in Business Award from the Society of American Business Editors and Writers and was selected by the Columbia Journalism Review for the Best Business Writing anthology. In 2013 and 2016, he was a finalist for the Gerald Loeb Award and Scripps Howard Award.
Author: He has authored two books: Everyone Believes It; Most Will Be Wrong and 50 Years in the Making: The Great Recession and Its Aftermath.
“Morgan Housel’s explanatory skills are simply superb. Best of the class,” praised the judges of the prestigious Society of American Business Editors and Writers
~ 45 minutes + Q&A
The Five Mistakes Investors Make
The Five Mistakes Investors Make
Using a multidisciplinary approach to learning, Morgan shares five non-investing stories that highlight how people think about, interpret, and act around risky situations, and what the takeaway from those stories teach us about mistakes investors make.
The overarching message is that we are all filled with biases and misconceptions when we manage risk, and understanding those flaws will help us make better financial decisions in the future. The talk is most relevant to investors, but has been praised (and adapted) by and for audiences whose interest more aligns with general business or risk management.
The five stories in the presentation are:
1) How Austria managed nuclear energy plants. As most of the developed world embraced nuclear energy, Austria shut down its single plant before it was ever turned on and never looked back. It highlights that people don't think about risk in an analytical way; they think about it in a cultural way. What you see as risky in your life is heavily influenced on the culture, generation, and individual circumstances of your upbringing. The same is true in investing.
2) The Wright Brothers. After the Wright Brothers flew for the first time in history, hardly anyone paid attention. Virtually no newspapers covered the first human flight, and didn't for years after. The most underrated trait the bothers had was patience, as they kept plugging away even while no one cared to recognize their achievement. It shows that when results are measured in years and decades, performance shouldn't be measured in months and quarters. The same is true in investing.
3) The war on cancer. We've made big strides in cancer, but hasn't eradicated the disease like we once thought possible. To make more progress we need to double down on prevention. But it's very hard to get people to take prevention seriously. Doctors focus on therapy; foundations don't fund it at high levels; governments don't regulate much around it. Why? Because treatments that are simple and basic but very effective are discounted in favor of those that are complex but less effective. The same is true in investing.
4) 9/11 in America. Air travel plunged after 9/11. But Americans didn't stop traveling. Rather than flying, they drove in their cars. Vehicle travel surged after 9/11. Which is tragic, because driving is vastly more dangerous and deadly than flying. Researchers showed that the net increase in driving after 9/11 resulted in more fatalities than occurred on 9/11 itself. People who take actions they think make them safer can actually be doing something that increases risk in their lives. The same is true in investing.
5) Politics in America. Bill Clinton gave the most optimistic speech in 2000. Barack Obama gave a terribly pessimistic speech in 2009. Yet 2000 was a terrible time to be an investor, and 2009 was one of the best times in history. The way the market behaves in the real world is vastly different from how we think it should behave.