Nash Blogz (when he can!)

On Behavioral Finance

2004-10-27T22:46:00.000+08:00

Knowledge at Wharton (October 20 - November 2, 2004) features an article titled How Human Behavior Drives Investment Activity , summarizing a talk by Alliance Capital Management CEO Lewis A. Sanders, at Wharton.

While the talk focusses on behavioral finance - how financial markets are impacted by human behavior, I feel much of what he mentioned can be generalized to any decison making. For instance, Sanders talks about three key traits that drive markets - a strong preference for certainty, ignoring probability in the face of large payoffs, and aversion to loss. I'd not be surprised if studies show that managers exhibit pretty much the same behavioral traits when making business decisons.

Sanders also talks about two other behavioral factors that impact markets - "inertia of regret" and "forecast bias". Inertia of regret refers to the the phenomenon where taking action leads to greater regret than not doing anything. And forecasts are biased by our tendency to take mental shortcuts - like basing forecasts on recent personal experience. Again, this pretty much appears to be applicable to management in general.

But perhaps this should not be all that surprising - it is a fact that these "investment theories" are themselves derived from the more general behavioral theories of economics!

On Mind Maps

2004-10-26T01:36:00.000+08:00

Chanced on this piece Beyond crayons: Why maps really work while serial-browsing!

I was introduced to mind-maps by an acknowledged master - Dilip Mukerjea during a BrainDancing seminar in Singapore a few years ago. Over the years I have found this tool, developed by Tony Buzan a really great way to brainstorm, organize my thoughts, draft reports, speeches, presentations and similar 'creative' stuff. However, one thing I have consistently failed to use mindmaps effectvely for - is to take notes during meetings/seminars/lectures. I manage with conventional 'linear' notes, but can't help thinking that I'm missing out on something that's infinitely better!

Ready to Try Getting Things Done - Try the GTD Forum First

2004-10-25T23:27:00.000+08:00

Over the past year or so, I've been trying to organize my projects/tasks along the principles outlined in Getting Things Done: The Art of Stress-Free Productivity, the time/life management classic by David Allen. While the book is very well written and easy to follow, I have found the GTD Forum, hosted on the David Allen/GTD site an even better resource, when it comes to practical implementation of GTD. Besides clarifying queries with detailed personal examples, this very active community of GTDers ( mainly enthusiatic practitioners, with some participation by Davidco coaches) is also very supportive of each other - a kind of AA for those in risk of sliding back into disarray.

6 G-mail Invites Available

2004-10-24T10:16:00.000+08:00

I have 6 G-mail invites to pass around. If you are interested, post a comment with your e-mail address.

On my must-read list

2004-10-21T20:34:00.000+08:00

As an engineer working in industry, I have been involved in several "incident investigations" and am familar with the concept of Root Cause Analysis. The basic premise here is that incidents (euphemism for accidents that lead to injury or loss of life or damage to property) are usually caused by a chain of causes, and preventing future recurrence requires that we get to the root of the problem - rather than stop at the "immediate cause". The book Will Your Next Mistake Be Fatal? Avoiding the Chain of Mistakes that Can Destroy Your Organization (Wharton School Publishing) by Robert E. Mittelstaedt Jr, seems to be extending the concept to investigating business fiascos, including Enron, New Coke, Martha Stewart and several others.

I've only read the synopsis at http://knowledge.wharton.upenn.edu and am intrigued enough to add this to my must-read list.

Email Post 2

2004-10-21T00:01:00.000+08:00

I just learnt that adding a "

Trying to Post Via Email

2004-10-20T21:32:00.000+08:00

I was told this is a Blogger Pro feature. So why does the seetings page ask for a secretname for e-mail posting?

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Disconnect between Content and Expression

2004-10-19T21:35:00.000+08:00

Dink, my significant other, met an old acquanintance after a long time, and the lady went "I heard your father passed away?". Nothing wrong there, except she had a wide toothy grin on her face!

Reminded me of the time I sat through a presentation by a consultant on Behavior Based Safety. The presenter was talking about the enormous cost of injuries and fatalities and all the while she had this smile on her face, as though she were talking about something pleasant!

I've also seen this elsewhere - even on TV, recently when Cheryl Fox was presenting a segment on a natural disaster (I forget which) and ended with a very sunny smile! Just what is it that causes this mismatch between content and expression? Is there a name for this phenomenon?