Basis Points: A View From the Hills

The Decoy Effect and Risk Tolerance

Investment Archive

October 2016

Investment Archive

The Decoy Effect and Risk Tolerance

by admin on October 15, 2016

When given the option to choose between two products or services, consumers tend to focus on the advantages of the two choices relative to their needs. When the consumer perceives their need as small, they gravitate toward the limited service or smaller (less expensive) product. When you insert a third choice or “medium” into the…

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The “Bums” Problem With Bond Indexing

by admin on March 5, 2016

In 1776, Adam Smith penned his opus on the economy. One of the discussions within the work is considered to be one of the earliest references to the law of supply and demand. The law simply states that price is a function of supply and demand. When demand is greater than the supply, the prices…

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Welcome to the Club

by admin on December 15, 2015

Bobby Jones and Cliff Roberts joined together in the 1930’s to turn a plot of land in Augusta, Georgia into the premier golf destination in the United States. Beginning in 1934, the course played host to The Master’s Tournament, which is now considered to be one of the four major championships of professional golf and…

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Campaigns and Capital Gains

by admin on December 15, 2015

Moody Analytics began using a complicated model that looks at the overall economic health and political affiliation of America on a state by state basis to predict the Presidential election winner. As forecasting goes, the model has a fairly short but perfect record. The model has correctly predicted the outcome of each of the last…

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Unicorn Ventures

by admin on December 15, 2015

During the Renaissance, a mystical animal was a common subject of European folklore. The unicorn was said to be colored in a white so pure that other colors could not penetrate it. Their protruding ivory horn was said to have magic healing powers and could make even the most bacteria infested water source potable. The…

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