Dr. Daniel Crosby
Organizational Psychology and Behavioral Finance Speaker
Talks about: The Behavioral Investor & The Laws of Wealth
Constructed the “Irrationality Index,” a sentiment measure that gauges greed and fear in the marketplace from month to month.
Named one of the “12 Thinkers to Watch” by Monster.com and a “Financial Blogger You Should Be Reading” by AARP
Co-author of the New York Times bestselling book, Personal Benchmark: Integrating Behavioral Finance and Investment Management
About Dr. Daniel Crosby - President of IncBlot Organizational Psychology and Behavioral Finance Speaker:
Dr. Daniel Crosby, a behavioral finance expert and sought after thought leader on market psychology, is the founder of Nocturne Capital. Dr. Crosby created the sentiment and valuation measures that serve as the overlay for Nocturne's tactical strategy. His ideas have appeared in the Huffington Post, Think Advisor, and Risk Management, as well as columns for WealthManagement.com and Investment News.
Daniel was named one of Investment News "40 Under 40" and a “financial blogger you should be reading” by AARP. Daniel's second book, Personal Benchmark, co-authored with Charles Widger of Brinker Capital, was a New York Times bestseller that outlines a highly personalized approach to investing that aligns intention with action while fostering an investment experience that is both enjoyable and rational.
Dr. Crosby’s book The Laws of Wealth was a Gold Medalist in the Axiom Business Book Awards. In this book, Dr. Crosby offers an accessible and applied take on a discipline that has long tended toward theory at the expense of the practical. Readers are treated to real, actionable guidance as the promise of behavioral finance is realised and practical applications for everyday investors are delivered.
Dr. Crosby's newly released book The Behavioral Investor (Oct 2018) examines the sociological, neurological and psychological factors that influence our investment decisions and sets forth practical solutions for improving both.
What Dr. Daniel Crosby Talks About:
The Behavioral Investor
In this presentation, based on his latest book The Behavioral Investor, psychologist and asset manager Dr. Daniel Crosby examines the sociological, neurological and psychological factors that influence our investment decisions, and sets forth practical solutions for improving both returns and behavior. Audiences will be treated to the most comprehensive examination of investor behavior to date and will leave with concrete solutions for refining decision-making processes, increasing self-awareness and constraining the fatal flaws to which most investors are prone.
The Behavioral Investor takes a sweeping tour of human nature before arriving at the specifics of portfolio construction, rooted in the belief that it is only as we come to a deep understanding of “why” that we are left with any clue as to “how” we ought to invest. Wealth, truly considered, has at least as much to do with psychological as financial wellbeing. The Behavioral Investor aims to enrich audience members in the most holistic sense of the word, leaving them with tools for compounding both wealth and knowledge.
The Laws of Wealth
In this talk, psychologist and behavioral finance expert Daniel Crosby offers an accessible and applied take on a discipline that has long tended toward theory at the expense of the practical. Audiences are treated to real, actionable guidance as the promise of behavioral finance is realised and practical applications for everyday investors are delivered.
Crosby presents a framework of timeless principles for managing your behavior and your investing process. He begins by outlining ten rules that are the hallmarks of good investor behavior, including ‘Forecasting is for Weathermen‘ and ‘If You’re Excited, It’s Probably a Bad Idea‘. He then goes on to introduce a unique new taxonomy of behavioral investment risk that will enable investors and academics alike to understand behavioral risk in a newly coherent and complete way.
Attention then turns to the four ways in which behavioral risk can be combated and the five equity selection methods investors should harness to take advantage of behaviorally-induced opportunities in the stock market. Throughout, audiences are treated to anecdotes, research and graphics that illustrate the lessons in memorable ways. And in highly valuable ‘What now?’ summaries at the end, Crosby provides clear, concise direction on what investors should think, ask and do to benefit from the behavioral research.
The 5 Obsessions of Exceptional Investment Teams Courage
Research by Burton Malkiel and others shows that professional money managers have their most conservative positions when stocks are attractively priced and are most aggressive when they are expensive. Research across 19 countries shows that investment professionals fall prey to the same fear and greed that animates the poor decisions made by retail investors. Great investment teams understand the need for creating processes aimed at constraining bad behavior and managing emotion.
Conviction – Dr. Wesley Gray has found that as many as three quarters of funds marketed as actively managed do not differ meaningfully from their benchmark. At a time when 83% of active funds have underperformed their passive counterparts over the past decade, evidence is mounting that much of this underperformance owes to a lack of conviction. Dr. Crosby will share research that shows how investment teams can achieve “Goldilocks diversification” while still giving their clients the benefits of an actively managed portfolio.
Consistency – Psychologists have shown that we lose 13% of our IQ under duress, meaning that we have least access to our knowledge when we need it most. Accordingly, great investment teams understand the need for rules and systems.
Clarity – The Fed releases 45|000 pieces of economic data each month, all of which is discussed and debated endlessly by the multiple 24/7 financial news channels. Flying in the face of the idea that greater information should lead to more efficient financial markets, manias, panics and bubbles are proliferating in size, strength and frequency in the era of news-at-your-fingertips. The best investment teams achieve clarity by discerning signal from noise and focusing on their circle of competence.
Conservation – Protecting wealth and managing risk provides both financial and psychological benefits to the investors that we serve. Psychologically, we dislike losses more than twice as much as we enjoy similarly sized gains and mathematically a sharp loss can only be recouped by a much larger gain. Understanding this, savvy investment teams take a “risk first” approach that incorporates behavioral notions of risk as well as the more commonly discussed goal of managing volatility.
Dr. Daniel Crosby is also an asset manager so he has the real-world experience to talk about these issues. He will provide anecdotes, research and real-life examples. After presenting on each of the five obsessions Dr. Crosby will discuss concrete ways in which these ideas can be applied in the lives of the participants.
In his presentation on his best selling book Personal Benchmark: Integrating Behavioral Finance and Investment Management, Dr. Daniel Crosby outline the ways in which a program of embedded behavioral finance, fueled by what matters most to you, can be your protection against irrational financial behavior. Along the way, you’ll learn how to improve your investment experience, increase returns formerly sacrificed to misbehavior, and worry less about “The Economy” as you become increasingly focused on “My Economy.”
Welcome to a new way of investing, a new paradigm for conceptualizing wealth, and a system of turning emotion from your portfolio’s worst enemy into its best friend!
In this new model, risk is simply the likelihood that we will under-perform our dreams. Irrationality is acting in ways that thwart our ability to reach those dreams. And the optimal portfolio is not the one that generates the highest return in abstraction, it is the one that helps us meet our goals without killing our nerves before we get there.
- The Ten Commandments of Investor Behavior
- The Power of Goals Based Investing
- Influence and Persuasion for Financial Advisors
- The Four Pillars of Behavioral Asset Management
- Bear Necessities: Keeping Your Clients Calm When Markets Are Volatile
- The Five Most Common Investor Errors