I found this interesting interview in the FT with James Montier, who is undoubtedly one of the most insightful and eloquent authorities on behavioral finance:
James Montier, however, doesn't wear a suit or tie. He doesn't look smooth or polished, and he certainly isn't the type you would put in a line-up of likely bankers, yet what he doesn't know about investing isn't worth knowing.
Now as a member of the asset allocation team at GMO and with four published books under his belt, Mr Montier reminisces: "My mother used to watch the business news at lunchtime and Bill Martin of UBS - as it was then - was a frequent guest. She always thought he looked terribly smart. It must be a tragic disappointment to her that I have the career but abandoned the smart attire."
It was his father who first ignited his interest in economics and investment strategy, and after studying traditional economics, first as a bachelors degree at Portsmouth University and then as a masters at Warwick, Mr Montier took banking jobs in London, Tokyo, and Hong Kong, building quite a reputation in the investment world along the way.
He began mining behavioural economics, an emerging discipline linking economics and psychology, to explain investors' irrational behaviour during the dotcom boom. He became intrigued by the role of human emotions in markets where prices were moved as much by psychological factors as by earnings reports.
He says: "We are our own worst enemy because we are human. Evolution equipped us to deal well with the savannah of 150,000 years ago, but that doesn't necessarily equate to leaving us well prepared for the world we find ourselves living in now."
He continues: "Traits such as over-optimism may have served us well historically - after all, the pessimists probably stayed at home in the cave and didn’t go out and try and catch woolly mammoths, and thus died out relatively quickly. However, over-optimism in investing can be an unmitigated disaster."
The study of human behaviour, Mr Montier says, is one of his passions, and he reads almost anything he can get his hands on relating to the subject, claiming that he often finds it has applications to investing.
And while most people would be content with simply reading to boost their personal knowledge on a subject, Mr Montier wanted to become one of the authors. Already au fait with producing technical market analysis in the form of web-based viewpoints and an increasingly popular blog - BehaviouralInvesting.blogspot.com - Mr Montier secured a publishing deal after being approach by business publishers Wiley
Link to full article can be found here.
James Montier, however, doesn't wear a suit or tie. He doesn't look smooth or polished, and he certainly isn't the type you would put in a line-up of likely bankers, yet what he doesn't know about investing isn't worth knowing.
Now as a member of the asset allocation team at GMO and with four published books under his belt, Mr Montier reminisces: "My mother used to watch the business news at lunchtime and Bill Martin of UBS - as it was then - was a frequent guest. She always thought he looked terribly smart. It must be a tragic disappointment to her that I have the career but abandoned the smart attire."
It was his father who first ignited his interest in economics and investment strategy, and after studying traditional economics, first as a bachelors degree at Portsmouth University and then as a masters at Warwick, Mr Montier took banking jobs in London, Tokyo, and Hong Kong, building quite a reputation in the investment world along the way.
He began mining behavioural economics, an emerging discipline linking economics and psychology, to explain investors' irrational behaviour during the dotcom boom. He became intrigued by the role of human emotions in markets where prices were moved as much by psychological factors as by earnings reports.
He says: "We are our own worst enemy because we are human. Evolution equipped us to deal well with the savannah of 150,000 years ago, but that doesn't necessarily equate to leaving us well prepared for the world we find ourselves living in now."
He continues: "Traits such as over-optimism may have served us well historically - after all, the pessimists probably stayed at home in the cave and didn’t go out and try and catch woolly mammoths, and thus died out relatively quickly. However, over-optimism in investing can be an unmitigated disaster."
The study of human behaviour, Mr Montier says, is one of his passions, and he reads almost anything he can get his hands on relating to the subject, claiming that he often finds it has applications to investing.
And while most people would be content with simply reading to boost their personal knowledge on a subject, Mr Montier wanted to become one of the authors. Already au fait with producing technical market analysis in the form of web-based viewpoints and an increasingly popular blog - BehaviouralInvesting.blogspot.com - Mr Montier secured a publishing deal after being approach by business publishers Wiley
Link to full article can be found here.
