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At least one person1 has noticed the risks to young consumers of social media: Since August 2020, @TikTokInvestors has been curating the most outrageous money-losing and dangerous videos culled from the “financial experts” at TikTok. Nestled in between lip-sync dancers and fashion influencers, financial fraud lurks on TikTok.
But last year, 2020, how do you look at these breaking new stories and all the buzz and mania around an IPO for both good and bad? RITHOLTZ: So let’s talk about some imbalances, and I’m thinking about the sort of meme stock mania that began in 2020, when everybody was stuck at home during the pandemic, and just exploded in 2021.
While the data isnt as black and white as other aspects of finance, the impact of behavioral finance is clearjust consider the Covid-induced crash in February 2020 or the meme stock phenomenon of 2021 (to name a few more recent events). Behavior Finance and Your Portfolio So much of the concept of investing is about logic, math, and numbers.
Statistically, these are known as Type 1 errors of commission (or inclusion) having fallen for a false positive signal. We all know that a 55% hit rate is the top decile across the industry, and the maths above demonstrates why. Certain accounts in the Composite may pay asset-based custody fees that include commissions.
Not only did he serve on the Brady Commission looking at the ’87 crash, but his history of investing and trading and public service, both at the Fed and the Chicago Board of Trade and Treasury Department, really unparalleled, as well as just a pretty amazing track record as an investor and trader. What did you find? RITHOLTZ: Right.
ANAT ADMATI, PROFESSOR OF FIANCE AND ECONOMICS, STANFORD GRADUATE SCHOOL OF BUSINESS: So, my journey starts where I took a lot of math. I was good in math and I love the math. So, I was kind of, in my romantic mind when I was in my early 20s, I was going to take but not give back to math, that kind of thing.
The book comes out in June, 2020, instant acclaim, New York Times bestseller list. So the book publishes June, 2020. 00:22:49 [Speaker Changed] I was, it was in January of 2020. I, it was January and 00:22:58 [Speaker Changed] We were, we were in Florida in January, 2020. How giant of a surprise was that reaction?
And so he set me off in a direction that was practical and at that point, commission business that he generated was ginormous, I’m sure. I’d been ranked i i back in the seventies, if you can do the math. And so you have, hindsight is great, but always, 00:48:21 [Speaker Changed] But 2020.
And so I would see how the over-the-counter desk, over-the-counter stock desk would push stocks and encourage brokers to sell them, put a lot of commission in them, to move them because some big seller was coming into the market. I mean you really saw the inner workings, how the sausage is made, as they say. RITHOLTZ: Right. MORGENSON: Right.
His commissions were drying up. Unemployment shoots up to 14% in April of 2020 in the US. I do the math. And I went in, introduced myself and talked to this guy, Marshall Witty, who was a salesman who at that time was about to send the keys back on his third spec house.
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