Behavioral Finance for Technical Professionals
The course provides a concise overview of behavioral finance. This is the study of the effects of psychology on investors and financial markets. It focuses on explaining why investors often appear to lack self-control, act against their own best interest, and make decisions based on personal biases instead of facts. While a popular theory is that the business world works in rational, predictable ways, the reality is markets are full of inefficiencies because of flawed thinking about prices and risk. The session highlights dozens of social psychology tendencies that can inadvertently mislead and distort your financial analysis.
The course is inspired by the life experience and research of Charlie Munger, an American billionaire investor and vice chairman of Berkshire Hathaway. Over a 70+ year career, he has identified a set of prevalent cognitive behaviors that can trigger flawed thinking and sub-optimal behavior. Munger has shared this “worldly wisdom” in multiple speeches and writings, and this session is a summation of his work.
Behavioral finance is especially important for Technical Professionals because that is precisely what they do -- make business and financial decisions based on their own psychology. How practitioners think, act, and decide is driven by their unique education, experience, biological influences, social pressures, and environmental factors. Gaining a richer and deeper understanding of psychology can help professionals achieve insights into their own actions as guardians of the public trust, arbiters of truth, and business advisors. The act of “thinking about thinking” will also provide a better understanding of your clients, peers, and the world.
You’ll walk away from the course with a checklist of standard thinking errors that you or your team may be committing but not necessarily realize it. You’ll also discover how to use psychology knowledge to avoid common human misjudgments, and self-sabotaging behaviors in your professional and personal life.
- What is Behavioral Finance?
- Examples of How Irrational, Biased and Emotional Investors Move Markets
- Charlie Munger and His Corpus on the Psychology of Human Misjudgment
- Reward and Punishment Tendency
- Liking/Loving Tendency
- Disliking/Hating Tendency
- Inconsistency-Avoidance Tendency
- Curiosity Tendency
- Envy/Jealousy Tendency
- Social-Proof Tendency
- Key Antidotes to Thinking Errors
- Point out at least 25 common thinking errors
- Summarize three case studies of how important incentives and disincentives are in changing cognition and behavior
- Give at least three examples of how liking or loving something can unconsciously distort your thinking about that entity
- Illustrate five examples of how authority figures can misinfluence and generate disastrous unintended consequences
- List at least 10 antidotes to thinking errors
Who Should Attend
Practitioners who want a foundational understanding of behavioral finance and wish to increase their awareness of social psychology tendencies that can cause business misjudgments, and how to avoid and fix these common thinking errors.REQUEST GROUP TRAINING QUOTE
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Almost all of EPIC's courses offer :
- Continuing Education Units (CEUs) and
- Professional Development Hours (PDHs)
These course credits will help attendees earn training requirements for their associations or provincial governing bodies.
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