February 2010
1 post
WatchHere is last night’s Market Shrinkology Program on StockTwitsTV. I talk about the implications of a break down in a very longstanding pattern in the SP500 Index from a price behavior perspective.
January 2010
2 posts
WatchTalking the $VIX w/ Adam Warner in Davos.
Talk Your Book on StockTwitsTV
We’ve begun a program called Talk Your Book on StockTwitsTV where our community members send in 140second or less videos in which they provide a rationale for a position they hold in the market. It has been awesome so far. This most recent episode features @JudPyle, @DownTownTrader and @TraderStwie.
You can watch it HERE.
(If you have questions or would like to contribute, you can...
November 2009
1 post
4 tags
Organizing Your Trading Plan
On last week’s Market Shrinkology program, @SnoopyJC asked a question about how to keep one’s trading plan well organized. If you go to minute 20 of the video linked above, you can watch my discussion of this. I received a lot of feedback on this and many asked if I might elaborate and provide some examples as well.
To begin, a trading strategy is super critical. When you are...
October 2009
1 post
Market Shrinkology: Structuring Episodic Memory to...
Last Tuesday night on StockTwits.TV, I began broadcasting a program called Market Shrinkology in which I examine a broad range of topics related to the psychology of markets.
I am really excited about this because it allows me an additional medium in which to more closely connect with the StockTwits community and my hunch is that we might all learn a little something in the process.
Tonight at...
August 2009
3 posts
Interview with Matt Davio (@MissTrade)
I was privileged to get interviewed by Matt Davio (@misstrade on Twitter). He did a great job provoking me to discuss how I approach markets from a psychological point of view.
MssTrade Interviews Dr. Phil Pearlman @ppearlman of Stocktwits from miss trade on Vimeo.
Interview With Anthony of The Davian Letter
I was interviewed last Friday by Anthony from the Davian Letter. Awesome guy and a lot of fun.
We talked about everything from StockTwits to the present rally to the psychology of markets.
Took a Nice Break
Time for me to start blogging again. Woooohoooo….
May 2009
0 posts
2 tags
Just Be Awesome
My aunt Ookie called and told me she had a great strategy for businesses who wanted to get on Twitter. I am kidding of course but it does seem like everyone is chiming in with what businesses should be or need to be doing to enhance their public relations or customer service or to gain followers or get their message out or whatever. The truth is all organizations are distinct and so they have...
April 2009
4 posts
3 tags
Panel Discussion "Why Twitter Matters"
Here is the link to the SIIA Panel discussion I pariticipated in moderated by @graubart with @harrisj, @pop17 on “Why Twitter Matters.
This was a great bunch and a lot of fun.
3 tags
Building Atop Twitter? Keep It Simple
A while back I wrote a post about how Twitter had created an optimal relational field, fertile soil upon which others might grow vertical communities by adding a bit more structure. By promoting an intuitive fairness, clarity in relationship dynamics and balance between control and freedom, it has managed to get the next phase of global connectedness just about right. Since then, I have indeed...
Training Yourself To Take Small Losses Quickly
In previous posts, I’ve begun introducing the cognitive theory of noise (CTN), a comprehensive model of market participant experience which will include a prescriptive component that will help traders decrease irrational behaviors and improve profitability. This is a big project and there will be many more posts that are theoretical in nature. But in this post I would like to skip ahead a bit and...
March 2009
8 posts
Is South Florida Real Estate Bottoming?
Every Winter, we come down here to South Florida to gather in and around my parents house in Del Ray with my siblings and their families who are scattered around the country.
Since arriving Thursday afternoon, I’ve sniffed about a bit and even made a few calls inquiring about residential properties specifically in Boca and Miami. Here is my initial impression…
The market is upside...
The Complementarity of Behavioral Economics and...
Most simply formulated, it is a paradox - the paradox of behavior which is at one and the same time self-perpetuating and self-defeating! …Common sense holds that a normal, sensible man, or even a beast to the limits of his intelligence, will weigh and balance the consequences of his acts: if the net effect is favorable, the action producing it will be perpetuated; and if the net effect is...
2 tags
StockTwits and the Death of the Delphic Oracle
“Croesesus crossing the Halys will destroy a great empire” - Delphic Oracle, quoted in Niederhoffer’s Education of a Speculator
The beauty of the above quote is that it sounds great but never really specifies which empire will fall. *** While Victor Niederhoffer might ultimately be remembered for blowing up spectacularly on multiple occasions, he wrote a great book back in the...
Sunday Morning Mood Induction
When we were in grad school, my wife (then girlfriend) was involved in research where they would use music to induce mood states including sadness and elation over short periods of time. Then, once they had induced mood, they would ask a bunch of questions about cognitions or whatever.
We used to laugh about it because, while the specific pieces of music had been empirically vetted in previous...
"Selling too Soon" Disposition Effect Evident Here
Over on StockTwits this morning I am observing a bunch of comments from traders saying that they “sold this rally too soon.” This is a significant collective expression.
There are two important psychological processes occurring here which I will briefly outline for the sake of awareness raising among traders. These are loss aversion and regret.
1. Loss aversion: The two behavioral...
Brief Comments on Market Sentiment (Much More...
(This was originally published on Real Money on 03/06/09 @ 11:32PM EST)
I am reading with interest the comments here on the Real Money Columnist Conversation regarding the psychology of the market now. I think that the tension here is a reflection of the tension among market participants in general.
Traders have been in an increasingly volatile (and stressful) environment since at least February...
Normative, Descriptive and Prescriptive Economic...
Before I get into the heart of a comprehensive model of market participant behavior, I would like to put the concept of prescription into context amid economic theory. Traditional economists offer normative theories. That is, they model how markets ought to behave in a world where all the participants are rational actors and always behave in accordance with expected utility theory. One need...
On a Prescriptive Model of Market Participant...
In a recent article in the Seattle Times, Teri Cettina interviewed Dan Ariely about his new book entitled Predictably Irrational. Airely is a behavioral economist at MIT and Duke who has done wonderful research which helps to describe the ways in which people behave irrationally especially where money is involved. I love this type of research but at the same time have a big problem with...
February 2009
3 posts
The Collective Market Participant Basket Case
The simple truth is that measuring human emotion is extremely difficult. Expert researchers have been working at it since before the phrenologists felt the bumps on one’s head to divine personality.
Its so difficult to do because emotions are super complex, intertwined dynamically with other modes of experience and remote to direct observation.
So measuring market sentiment with the VIX...
Centralizing Accountability
I had a great breakfast this morning with Lindzon and Mick from Research Edge. Mick brought up the idea of centralizing accountability which I loved and which dovetails nicely with my piece on StockTwits and transparency. The idea is that up unitl now we have had all of these market pundits squawking whatever they want even when it means losing people tons of money with little accountability. ...
Loss Aversion, Evolution and Risk Complacency
Since the end of World War II, the U.S. has arguably experienced the greatest era of increasing prosperity in the history of nations. From 1945 to 2001 U.S. GDP and the Dow Jones Industrial Average both increased approximately 50 fold. At the same time, the abundance of and access to resources also increased exponentially. This increase in wealth has been a huge positive with regard to quality...
January 2009
5 posts
The Constructivist Revolution and New Media
Early psychoanalytic models were deterministic. That is they espoused a view of human nature as being mostly at the whims of forces beyond people’s control whether these forces were internal (needs, desires and conflicts) or external (war. political, socio-economic). Some of the more recent dynamic models have run counter to a deterministic view. One in particular called constructivism...
Fostering Transparency on StockTwits
One of the toughest things for traders to do is realize losses. I have written about it here already. You also find that this holds in terms of what market participants are willing to fess up to in public. We see this with traders (and gamblers coming back from Vegas) all the time and the current main stream media supports this to no end. Guys pop up on the CNBC and on the major financial...
2 tags
Twitter and the Relational Field
When people interact, very little attention is paid to the spaces between them, the field upon which they are interacting. Nevertheless, this space is an incredibly important part of the interaction. The energy behind the correspondence, the relationship of the participants, the implicit rules of the setting, the physical surroundings… I call the space in between people’s interactions...
My New Blog
Im psyched to have this new blog set up I’ve had this virtual spot for a while and never really did much with it aside from the occasional post here and there.
I plan to begin posting much more frequently and invite all readers to join in the conversation.
The majority of my blog posts will be about finance, social media and the integration of the two and I tend to adopt a psychological...
1 tag
social140
social140@gmail.com
November 2008
1 post
The 'As If'
Much continues as if half of the worlds wealth has not been destroyed over the past year. Families living at the margin are still booking trips to Disney. Pfizer is still copping Elvis to sell Viagra. The nouveau continues to trade in beamers for beamers. Don’t get me wrong the shift towards a more humble America is perceptible as the retailers hemorrhage and even the Japanese automakers...
October 2008
2 posts
Actionable Patterns Amid the Chaos
Recently I have tweeted 3 actionable index price patterns that I’ve observed amid the seeming chaos…
These include 1. a longer term consolidation set up consisting of a v broad range followed by a series of higher lo’s and lower hi’s which is looking good so far, 2. the end of day extensions which have been occurring so regularly and with such ferocity I am sure they must...
The Pychology of Realizing Losses
Average market participants dread losing money in the market as much as agoraphobics dread the market itself. And sometimes they cope in similar maladaptive ways by avoiding realization of the fear, rational problem solving and resolution… In fact, one of my all time favorite terms in all of trading is realizing losses. There is a wonderful double meaning there that gets to the heart of...
November 2007
2 posts
cog con and etrade....
first off let me just say that i have no position in etrade long or short… next, in light of recent events, if u have money at etrade, whether it is insured or not u ought to be getting it out of there asap… if there is even a remote chance that they go banko, u do not want to have assets there. cognitive shrinks call the tendency to only slowly process and then respond to new...
January 2007
2 posts
About
Phil is the head of market research and community development at StockTwits.com and trades a private account in New York. He also makes angel investments in social media based start ups. He spent 4 years as a director at a behavioral finance focused long short equity hedge fund with 50 million in assets under management. He is a contributor to RealMoney.com. Phil is an expert in the areas of...
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