Tag: stocks

Investors Selectively Forget Their Money-Losing Stocks – They Often Have A Biased Memory – Why Are They So Cocky?
MONEY

Investors Selectively Forget Their Money-Losing Stocks – They Often Have A Biased Memory – Why Are They So Cocky?

Philip Fernbach, University of Colorado Boulder and Daniel Walters, INSEAD The Research Brief is a short take about interesting academic work. The big idea Stock investors mistakenly remember their past investments as better than they actually were, which leads them to be overconfident about how they’ll perform in the future, according to our new study. Past research has shown that investors tend to be very overconfident. But there’s been little explanation as to why. We wondered whether a biased memory might play a role. So we recruited about 900 investors – mostly men, who dominate the finance industry – through online forums and panels and conducted three studies. In the first, we asked 401 investors a series of questions intended to estimate their level of overconfidence, glean the...
Stocks are plummeting – could coronavirus cause a recession?
BUSINESS, COVID-19

Stocks are plummeting – could coronavirus cause a recession?

Fears are growing that the new coronavirus will infect the U.S. economy. U.S stocks are headed for their worst week since the 2008 financial crisis; companies including Apple and Walmart have been warning of potential sales losses from COVID-19 and the Centers for Disease Control and Prevention told Americans to prepare for the outbreak to spread to the United States, with unknown but potentially “bad” consequences. Lately, many people have asked me, as an economist, a question I haven’t heard in years: Could a virus really send the global and U.S. economies into recession – or worse? Put more pertinently, will COVID-19 trigger an economic meltdown? What a virus can do The worry is understandable; viruses are scary things. I’ve read my share of medical thrillers based on some new virus...