Entries by Spencer Li

Confirmation Bias – I See Only What I Want to See!

Confirmation bias refers to a type of selective perception that emphasizes ideas that confirm our beliefs, while devaluing whatever contradicts our beliefs. This can be thought of as a form of selection bias in collecting evidence to support certain chosen beliefs. For example, you may believe that more red cars drive by your house during […]

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Endowment Bias – Do You Really “Own” a Trading Position?

People who exhibit endowment bias value an asset more when they own it, as compared to when they don’t. This is inconsistent with standard economic theory, which asserts that a person’s willingness to pay for a good should always equal the person’s willingness to accept disposition of the good.     In essence, this bias […]

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Long-term refinancing operations (LTROs) – Long-term time bombs?

Long-term refinancing operations (LTROs) involve the central bank lending money at a very low interest rates to eurozone banks, which has led to the term “free money.” The injection of this cheap money means that banks can use it to buy higher-yielding assets and make profits, or to lend more money to businesses and consumers […]

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Optimism Bias – Why Most People Think They Can Beat the Market

Most people have heard of “rose-tinted glasses” and know that those who wear them tend to view the world with undue optimism. Studies have shown that with respect to most positive traits, for example driving ability, good looks, sense of humour, physique, etc, most people tend to rate themselves as above average. Logically speaking, this […]

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Exclusive Invitations – The Future of Derivatives Party 2012

Spencer LiAfter trading for 18 years, reading 1500+ books, and mentoring 1000+ traders, I specialise in helping people improve their trading results, by using tested trading strategies, and making better decisions via decision science.

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