‘Born to Fly’ is the phrase tattooed on Felix Baumgartner’s arm. Flying is perhaps not the word one would use to describe his supersonic sky-dive from a hot-air balloon at a height of 39 kilometres, but it was no less fascinating to watch. Hours after the record-breaking plunge on Sunday, I still sat engrossed inContinue Reading

How many Smarties can you get into a Smart? It is not the first line of a joke; it is a brainteaser of the kind recruiters are increasingly using to upend interview candidates, and to test their capacity for logical thinking. I recently came across another example of such a conundrum

“Turning back and climbing down is one of the most difficult decisions a mountain climber has to make. Perhaps, the most difficult.”  The Tyrolean mountaineer, Hans Kammerlander, made the point very succinctly. It was only recently, though, that I got a glimpse of just how difficult the decision is to abandon an expedition and toContinue Reading

Mark Zuckerberg, Bill Gates, George Soros, Larry Page, Sergei Brin – I could go on with this list of people who became super-rich by putting all their proverbial eggs in one basket. There is no doubt about it: to achieve extreme monetary outcomes, one has to accept extreme gambles. Portfolio diversification in the spirit ofContinue Reading

Ninth consecutive week in pessimistic territory 19 September 2012. FRANKFURT (Börse Frankfurt). The eurozone debt crisis has ceased to be the most worrisome problem child in the schoolyard for global investors. According to a survey by BofA/Merrill Lynch, the US ‘fiscal cliff’ has elbowed its way to the top spot, aided no doubt by theContinue Reading

‘Draghi disappoints markets’ is the headline on many front pages today. Yet, if we were to go back one year – or even one month – we would recognise the ECB’s position today is light-years away from where it was then. The Bank has just announced its willingness to buy short-dated paper from crisis-struck countriesContinue Reading

The most severe instance of bias in the survey this year 1 August 2012. FRANKFURT (Börse Frankfurt). The DAX bears on Boerse Frankfurt’s survey panel enjoyed but the briefest of moments in the sun last week. After expressing their second most extreme pessimism so far this year, they witnessed the index dip less than oneContinue Reading

There is hardly anybody left who believes that savings achieved through austerity measures will not hinder growth in peripheral Europe. At the same time, high and rising debt burdens also have a negative impact on economic performance. Countries are stuck in a vicious circle. Yet, it is clear that somebody must bear the burden ofContinue Reading

I have been engaged in a fruitless search for a new mattress for weeks. I have come up short, but not for want of alternatives. On the contrary, the abundance of choice is precisely the problem. Looking back, I recognise now how woefully unprepared I was the first time I went into a bed store.Continue Reading

“If only days like this could last forever,” sang Die Toten Hosen. These are perhaps not the kind of romantic sentiments one might expect from a punk band, but they are certainly ones that almost all of us can identify with. Every now and again, those special moments in life come alone when we thinkContinue Reading

Investors must now take ‘good’ EU news at face-value 4 July 2012. FRANKFURT (Börse Frankfurt). Investors selling equities after a summit of EU heads of state or a finance ministers’ meeting has become such familiar pattern that the rule could be carved in stone. Regardless of how ‘fruitful’ it is claimed to have been, irrespectiveContinue Reading

“What are they going to force us to do next – eat broccoli?” raged one American TV commentator about the healthcare reform known as Obamacare. He considered it an impingement on his personal liberty to be obliged by law to buy health insurance. The decision by the US Supreme Court last Thursday to uphold theContinue Reading

Bulls and bears reach for the sell-on-good-news schema 20 June 2012. FRANKFURT (Börse Frankfurt). Stock market investors have to be fast learners. However, learning requires accurate feedback about cause and effect. Financial markets, however, do not always provide the best feedback as the causes behind the observable effects are obscure, unstable, or simply non-existent. OneContinue Reading

Even beggars are getting wise to behavioural economics these days. Instead of asking whether you have any spare change, they ask instead for the time of day. Who can refuse a simple request for the time? However, once you have stopped and pushed back your cuff to look at your watch, it becomes more difficultContinue Reading

If five winners share a lottery payout of two million, how much does each get? Although I arrived at the right answer – 400,000 – quite easily, this might not be the case in 30 or 40 years’ time. In one study, while more than half of subjects aged 53 were able to answer theContinue Reading

An observation made in a study by Kenneth Rogoff and Carmen Reinhart[1] is often cited in connection with the eurozone debt crisis: when a country’s debt burden surpasses 90 percent of its GDP, economic growth suffers. Many European nations overtook this threshold a long time ago.  Even though the study has amassed a fair amountContinue Reading

Investors are no longer sure how the Greek drama will affect stocks. 23 May 2012. FRANKFURT (Börse Frankfurt). DAX investors have had few other preoccupations since last week’s survey than to evaluate the prospects, and the consequences of an imminent Greek exit from the eurozone. The reassurances from Greece’s former Prime Minister, Lucas Papademos, thatContinue Reading

The one wants to have it at any price; the other wouldn’t touch it with a barge-pole. There is no doubt that the Facebook IPO has polarised opinion. Still, if everything goes to plan, the social network will come to market at a price that values the company at $100bn. That is as much asContinue Reading

“Europe – Why our continent is worth fighting for.” This is the title of the book in which ex-Deutsche Bank chief economist, Norbert Walter, shares his optimism for the euro’s ultimate survival. I had the opportunity recently to hear the good doctor elaborate his arguments in the flesh.

In the blink of an eye, empathy towards an individual’s pain can reverse to schadenfreude, becoming yet another twist in the strange nature of humans. In a recent study which we previously wrote on (One Man’s Suffering…), differences are displayed in the willingness to help based on group association.

In their 2008 book, Nudge, Richard Thaler and Cass Sunstein illustrated how policymakers could ‘encourage’ the public to make better decisions by giving them a behavioural push in the right direction[1]. The reasoning behind

I have to admit, although I love playing football, watching others play is not one of my favourite hobbies. I am hopelessly lost in the jungle that is the Bundesliga. My spectating is limited to the regular perusal of the sports pages of the newspaper, where I recently came across an interview with FC Schalke’sContinue Reading

4 April 2012. FRANKFURT (Börse Frankfurt). Stock markets seem to have been somewhat schizophrenic in recent weeks: when they receive information that suggests the global economy is recovering, stock prices rise; when there is a hint from policymakers that the economic recovery they are witnessing might prompt a withdrawal of stimulus, stock prices fall backContinue Reading

India surprised me. I was fascinated by the beautiful landscapes, and sometimes the helpfulness shown to me at some of the places I stayed on my trip went far beyond my expectations. On the other hand, I loathed seeing the stinking piles of waste everywhere. Plastic bottles seemed to have been tossed everywhere and theContinue Reading

Anyone who has been there knows that travelling in an Indian city by motor-rickshaw is an adventure. Instead of using the two-lane traffic system as mapped out by the city planners, drivers there navigate at least three abreast through never-ending traffic jams made up of thousands of cars, trucks, buses, rickshaws, and even more bikes,Continue Reading

As the elephant stormed through the tall waves, my joy was total. For about 20 minutes, I was able to swim and dive with this majestic creature against a picture-postcard backdrop of sparkling sea, a stretch of white beach, and an emerald green forest. When I returned to shore, I was intoxicated from the experience.Continue Reading

Investors have not appreciated the 20 percent DAX gains since the last ECB operation We all now know that the first Long-Term Refinancing Operation helped to stabilise the outlook for the eurozone banking system, drove down sovereign bond yields, supported lending to the private sector and, given the 20 percent rally in the DAX sinceContinue Reading

This time tomorrow I will be embarking on a flight to an incredible Indian holiday. I love to travel and I have been looking forward to this trip for ages. As usual, I have already spent far more money than I originally planned. Although India is a relatively inexpensive country, I just had to chooseContinue Reading

People like things that are familiar – they are rarely frightening and we enjoy the warm, comfortable feeling of having some control, or at least some understanding, of what is going on around us. The same applies to our investment preferences: someone who regularly sees BMW cars on the streets will tend to see themselfContinue Reading

“…if institutional investors dared not advance Greece as a justification for adding to their underweight stance, what argument did they use? The only real change since last week that could have influenced their decision-making was the price itself. That the DAX traded at the highest level in over six months was probably a factor; thatContinue Reading