5 Simple Ways to Stay Productive and Reach Success

5 Simple Ways to Stay Productive and Reach Success When things go wrong, or just aren’t moving forward the way we’d like, it’s easy to point fingers. That guy didn’t do what he was supposed to. I was waiting for her to go first. I just didn’t have time. Yet in most cases, the obstacle to our success is pretty clear-cut: it’s us. Here are five ways to  stay productive and succeed.1.  Tackle Your Work ImmediatelyProcrastinating is so easy- it can be hidden under the guise of â€Å"prioritizing.† Human nature being what it is, tasks put off for â€Å"later† will always be theoretical, just out of the reach of the to-do list. Going ahead and doing something, even if it’s not terribly convenient or enjoyable, brings it back to being a tangible achievement. Think how satisfying it’ll be to check it off.2.  Embrace The Possibility of FailureSure, you might fail. Guess what? If you do, the world doesn’t stop. Don’t let your fear of failure or your intim idation dictate your next move, because you will absolutely miss growth and opportunities if you can’t even get started.3. Own  Your IdeasYou had the great idea to begin with, so steer it confidently as you bring it to life. You bring skills and a unique perspective to the table- so even if others are having trouble sharing your vision, that doesn’t mean stop. It means keep moving, adapt if necessary, and know that your instincts are valid. It’s okay to be confident in your abilities.4. Turn Fault Into an OpportunityAnalysis is good, finger-pointing is not. Figuring out how things went wrong should be part of any development process, but find ways to make that a constructive session. Ask how things can be fixed and what specifically you or a colleague can do to improve the result moving forward.5.  Continue Learningâ€Å"I didn’t know† isn’t an excuse†¦it’s a cop-out. If you don’t actively learn from everything going a round you, don’t be surprised if you’re suddenly feeling left behind as others around you grow and change and move forward. Similarly, learning from the past can keep you from making mistakes over and over or getting disappointing results†¦again.The good news is that if you’re blocking your own success, you can also be the hero for removing that obstacle. No super-strength necessary, just a willingness to keep your head up and be proactive.Read More at Lifehack

Early European Explorers essays

Early European Explorers essays During the 15th and 16th centuries around the world, the lure of economic opportunity, heroism, and adventure tempted explorers from Europe to travel hundreds of miles to explore the worlds that existed outside their own. What they discovered upon arriving at their destinations, was that these new lands, rich in natural resources, were already inhabited by people who had been living there for hundreds of years. The interactions that ensued between the European explorers and native peoples led to an abundance of trade between the Old and New worlds and increased horizons for people witnessing new cultures for the first time. For the most part, however, this interaction gave rise to warfare, slavery, and exploitation largely due to newfound perceptions about the people and their culture that went both ways; Europeans and indigenous peoples alike made assumptions about the other. These misconceptions shaped the way they regarded these new people they were in contact with as well. When Europeans treks led them to Africa, the Americas, and Japan, they were quick to judge what they saw, given their own backgrounds and range of knowledge. Their limited experiences caused them to make misguided opinions of the people they found. Among the visitors to Africa was a Portuguese explorer named Joao Baptista Lavanha, who described the Africans he met as barbarians (DOC 1) who are very brutish and worship nothing. (DOC 1) The few things he learned about the religious practices of the people in what he called Kaffraria were cast aside. Another Portuguese explorer found the eating habits of the people of Guinea and Benin as haphazard. (DOC 2) Christopher Columbus described the people he found in America to be a very poor people (DOC 4) when he arrived there in 1492. Amerigo Vespucci also took note of the eating habits of indigenous Americans, as well as a tradition of eating the flesh of their ...

Australian government disability policy Essay Example | Topics and Well Written Essays - 1500 words

Australian government disability policy - Essay Example The latest research surveys conducted by global disability association illustrated that, out of the total current worlds’ population; approximately 10 percent are found to be disabled in one way or another. However, it is still contrastingly clear that, disabled persons form the minority on the society. Despite the fact that, communities have been sensitised to recognize the disabled like any other member of the society, persons with disability are still prone to subjection of acts of violence and rape. The offenders are likely to get a way scot free without legal intervention. This is the main reason as to why the federal Government of Australia has enacted the disability policy to ensure fairness and equal opportunities in all roles within the society. Integration of the disability policy Since it had been brought to the limelight that, people associated with disability are often assumed with a lot of neglect in most of the societal structure. The Australian Government, ther efore, pushed for their recognition just as any other normal citizen in the federal republic. To start with, the Government enacted equalization of persons with disability act to drive a sense of equity in the delivery of services and equitable sharing of responsibility in favour of the disabled persons so that, they can enjoy the same kind of life associated with able members of the society. According to this act, the federal government has put in place mandatory policy to all the institutions offering any form of employments both at private and state level to empower and exercise right of the disabled person (Paun 2006). This authority has been designed to be far much felt both in rural and urban areas where the disabled human resource who are otherwise recognised as to able are differently given equal opportunities to ascertain productive employment with respect to the labor market. The basic advantage of this policy is to avert any form of discrimination of persons perceived to be disabled and no obstacles should be brought in their way while pursuing employment. Besides, the Australian federal Government has ensured harmony and integration of disabled persons into open employment. It has offered support which is being driven through different kinds of measures such as offering vocational training for persons considered to have severe physical problems and disadvantaged from joining higher levels of education. With respect to vocational training, talent development and a skilled perfection is made as a way of making them to achieve equal status like the other members of the society (Paun 2006). Some amongst the advantages of this policy is that, the state provides a lot of incentives to the disabled through what is called the quota schemes. Such invectives come in terms of reserved openings and employment opportunities which are specifically meant for the disabled. Besides, they are given fair opportunities in accessing loans at affordable interest rates a nd grants with sufficient settlement duration of repayment, and this makes them feel the advantage of entrepreneurship. However, for this not to be visualized as undue advantage to the rest of the society, strategies can be put in place to disburse incentives to a group or combination of both able and disabled persons so as to avert unfairness or biasness. Moreover, the government is very much considerate and has subsidised the tax collected from such persons and has instead facilitated compliance in terms of offering contracts besides funding and other technical assistance to the institutions that has put in recognition to employ persons with disabilities. This acts as an additional support in generation of returns helping in the collective support in building of the society in all aspects of personalities (Vosko 2006). The Australian National council, a body, which supports the awareness of persons with disa

According to Cronon, when and why did the contemporary American Essay

According to Cronon, when and why did the contemporary American conception of wilderness emerge, and why does he consider it dangerous to environmentalism - Essay Example part, have always defined the wilderness as being an environment in which ordinary human beings struggled to be able to provide for themselves and their families. Moreover, this unrealistic notion disregards the fact that the American Indians lived comfortably in that supposed ‘harsh wilderness’ for virtual centuries; only to be unceremoniously cast out of it so that pampered tourists could continue to take pleasure in the illusion that they still had places in their nation which were preserved in their original and pristine state. Cronon openly avows that the notion of the preservation of the wilderness is actually a myth of mainstream cultural construction (Cronon, LoPrete and Demos, 2003). The supposedly ‘American Wilderness’ was once the home of American Indians who farmed the land to produce food and lived on it as well. They also freely owned this land. Today, the notion of hunting societies gaining sustenance from the wilderness is in direct conflict with the statutes sustained the concept of environmentalism. Environmental dualism holds that environmentalists have a duty to safeguard â€Å"unspoiled† environments. This means that the natural inhabitants of these lands who farm or hunt in them are viewed as being threats to the natural condition of the

Woolf Professions of women Essay Example | Topics and Well Written Essays - 500 words

Woolf Professions of women - Essay Example I wanted to know more about the challenges that a modern woman faces at work, and this curiosity and interest has inculcated the motivation in me to research this topic. I am eager to learn about the psychological barriers holding modern women back. We see that women are getting more and more independent and a break from their traditional domestic and familial responsibilities generally as they are integrating into the socioeconomic system. While the physical barriers to freedom have been eradicated to a large extent, most women still cannot use their skills and competencies optimally because of the psychological barriers. (Woolf) has expressed this very clearly in her writing as she said, â€Å"The Angel was dead; what then remained? You may say that what remained was a simple and common object – a young woman in a bedroom with an inkpot. In other words, now that she had rid herself of falsehood, that young woman had only to be herself. Ah, but what is â€Å"herself†?† (Woolf cited in Rainbolt and Fleetwood 302). I want to learn what sort of psychological barriers are encountered by working women in general and how they deal wi th them. I also want to know more about what are the goals of a vast majority of the working women. I want to learn their preferences and priorities. I want to know if personal freedom and autonomy is more important for women in the modern age or they generally want to work and earn money in order to be able to take care of their families better domestically as well as financially. In order to find answers to my queries, I shall first conduct a thorough review of literature. I shall read the novels, autobiographies, and journals of famous women writers, and note down any quotations, passages, and narrations that qualify as answers to my questions in any way. It would take me five to six drafts to finalize my research paper that would be structured in a way that

Efficient Markets Hypothesis (EMH)

Efficient Markets Hypothesis (EMH) INTRODUCTION: Much of modern investment theory and practice is predicated on the Efficient Markets Hypothesis (EMH), the assumption that markets fully and instantaneously integrate all available information into market prices. Underlying this comprehensive idea is the assumption that the market participants are perfectly rational, and always act in self-interest, making optimal decisions. These assumptions have been challenged. It is difficult to tip over the Neo classical convention that has yielded such insights as portfolio optimization, the â€Å"Capital Asset Pricing Model†, the â€Å"Arbitrage Pricing Theory†, the â€Å"Cox Ingersoll-Ross theory† of the term structure of interest rates, and the â€Å"Black-S[choles/Merton option pricing model†, all of which are predicated on the EMH (Efficient Market Hypothesis) in one way or another. At few points the EMH criticizes the existing literature of behavioral finance, which shows the difference of opinion on psychology economics. The field of psychology has its roots in empirical observation, controlled experimentation, and clinical applications. According to psychology, behavior is the main entity of study, and only after controlled experimental dimensions do psychologists attempt to make inferences about the origins of such behavior. On the contrary, economists typically derive behavior axiomatically from simple principles such as expected utility maximization, making it easier for us to predict economic behavior that are routinely refuted empirically The biggest threats to Modern Portfolio theory is the theory of Behavioral Finance. It is an analysis of why investors make irrational decisions with respect to their money, normal distribution of expected returns generally appears to be invalid and also that the investors support upside risks rather than downside risks. The theory of Behavioral finance is opposite to the traditional theory of Finance which deals with human emotions, sentiments, conditions, biases on collective as well as individual basis. Behavior finance theory is helpful in explaining the past practices of investors and also to determine the future of investors. Behavioral finance is a concept of finance which deals with finances incorporating findings from psychology sociology. It is reviewed that behavioral finance is generally based on individual behavior or on the implication for financial market outcomes. There are many models explaining behavioral finance that explains investors behavior or market irregularities where the rational models fail to provide adequate information. We do not expect such a research to provide a method to make lots of money from the inefficient financial market very fast. Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology the implications of these theories appear to be significant for the efficient market hypothesis, that is based on the positive notion that people behave rationally, maximize their utility and are able to prices observation, a number of anomalies (irregularities) have appeared, which in turn suggest that in the efficient market the principle of rational behavior is not always correct. So, the idea of analyzing other model of human behavior has came up. Further (Gervais, 2001) explained the concept where he says that People like to relate to the stock market as a person having different moods, it can be bad-tempered or high-spirited, it can overreact one day and make amends the next. As we know that human behavior is unpredictable and it behaves differently in different situations. Lately many researchers have suggested the idea that psychological analysis of investors may be very helpful in understanding the financial markets better. To do so it is important to understand the behavioral finance presenting the concept that Investors are not as rational as traditional theory has assumed, and biases in their decision-making can have a cumulative effect on asset prices. To many researchers behavioral finance is a revolution, transforming how people see the markets and what influences prices. The paradigm is shifting. People are continuing to walk across the border from the traditional to the behavioral camp†. (Gervais, 2001, P.2) . On the contrary some people believe that may be its too early call it a revolution. Eugene Fama( Gervais, 2001) argued that Behavioral finance has not really shown impacts on the world prices, and the models contradict each other on different point of times. He gave little credit to behaviorist explanations of trends and anomalies(any occurrence or object that is strange, unusual, or unique) arguing that data-mining techniques make it possible to locate patterns. Other researchers have also criticized the idea that the behavioral finance models tend to replace the traditional models of market functions. The weaknesses in this area, explained by him (Gervais, 2001) are that generally the market behavior displayed is attributed to overreaction and sometimes to under reaction. Where People take the behavior that seems to be easy for the particular study regardless of the fact that whether these biases are the result of underlying economic forces or not. Secondly, Lack of trained and expert people. The field does not have enough trained professionals both academic psychology and traditional finance and so the models that are being put up together are improvised. David Hirshleifer (Gervais, 2001) focuses on the individual behavior influencing asset prices, suggesting that behavioral finance is in its developmental stage and not yet a mature one, theres a lot of disagreement but productive one. Hirshleifer agrees that applying behavioral-finance concepts to corporate finance can pay off. If managers are imperfectly rational, he says, perhaps they are not evaluating investments correctly. They may make bad choices in their capital-structure decisions. Few people realistically think behavioral finance will displace efficient-markets theory. On the other hand, the idea that investors and managers are not uniformly rational makes insightful sense to many people. Traditional Finance Empirical Evidence: â€Å"Traditional theory assumes that agents are rational the law of one price holds† that is a perfect scenario. Where the law of â€Å"One price† states that securities with the same pay off have same price, but in real world this law is violated when people purchase securities in one market for immediate resale in another, in search of higher profits because of price differentials known as â€Å"Arbitrageurs†. And the agents rationality explains the behavior of investor â€Å"Professional Individual† which is generally inconsistent with the rationality or the future predictions. If a market achieves a perfect scenario where agents are rational law of one price holds then the market is efficient. With the availability of amount of information, the form of market changes. It is unlikely that market prices contain all private information. The presence of â€Å"noise traders† (traders, trading randomly not based on information). Researches show that stock returns are typically unpredictable based on past returns where as future returns are predictable to some extent. Few examples from the past literature explains the problem of irrationality which occurs because of naà ¯ve diversification, behavior influenced by framing, the tendency of investors of committing systematic errors while evaluating public information.(Glaser et al, 2003) Recent studies suggest that peoples` attitude towards the riskiness of a stock in future the individual interpretation may explain the higher level trading volume, which itself is a vast topic for insight. A problem of perception exist in the investors that Stocks have a higher risk adjusted returns than bonds. Another issue with the investors is that these investors either care about the whole stock portfolio or just about the value of each single security in their portfolio and thus ignore the correlations. The concept of ownership society has been promoted in the recent years where people can take better care of their own lives and be better citizen too if they are both owner of financial assets and homeowners. As a researcher suggested that in order to improve the lives of less advantaged in our society is to teach them how to be capitalist, In order to put the ownership society in its right perspective, behavioral finance is needed to be understood. The ownership society seems very attractive when people appear to make profits from their investments. Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. (Shiller, 2006) According to (Glaser et al, 2003) there are two approaches towards Behavioral Finance, where both tend to have same goals. The goals tend to explain observed prices, Market trading Volume Last but not the least is the individual behavior better than traditional finance models. Belief Based Model: Psychology (Individual Behavior) Incorporates into Model Market prices Transaction Volume. It includes findings such as Overconfidence, Biased Self- Attrition, and Conservatism Representativeness. Preference Based Model: Rational Friction or from psychology Find explanations, Market detects irregularities individual behavior. It incorporates Prospect Theory, House money effect other forms of mental accounting. Behavioral Finance and Rational debate: The article by (Heaton and Rosenberg,2004) highlights the debate between the rational and behavioral model over testability and predictive success. And we find that neither of them actually offers either of these measures of success. The rational approach uses a particular type of rationalization methodology; which goes on to form the basis of behavior finance predictions. A closer look into the rational finance model goes on to show that it employs ex post rationalizations of observed price behaviours. This allows them greater flexibility when offering explanations for economic anomalies. On the other hand the behavior paradigm criticizes rationalizations as having no concrete role in predicting prices accurately, that utility functions, information sets and transaction costs cannot be ‘rationalized. Ironically they also reject the rational finances explanatory power which plays an essential role in the limits of arbitrage, which actually makes behavioral finance possible. Milton Friedmans theory lays the basis of positive economics. His methodology focuses on how to make a particular prediction; it is irrelevant whether a particular assumption is rational or irrational. According to this methodology, the rational finance model relies on a limited â€Å"assumption space since all assumptions that are supposedly not rational have been eliminated. This is one of the major reasons behind the little success in rational finance predictions. Despite the minimal results, adherents of this model have criticized the behavioral model as lacking quantifiable predictions that are based on mathematical models. Rational finance has targeted a more important aspect in the structure of the economy, i.e. investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioural emphasises the importance of taking limits in arbitrage. Friedmans methodological approach falls into the category ‘instrumentalism, which basically states that theories are tools for predictions and used to draw inferences. Whether an assumption is realistic or rational is of no value to an instrumentalist. By narrowing what may or may not be possible, one will inevitably eliminate certain strategies or behaviors which might in fact go on to maximize utility or profits based on their uniqueness. An assumption could be irrational even in the long run, but it is continuously revised and refined to make it into something useful. In opposition to this, many individuals have gone on to say that behaviouralists are not bound by any constraints thus making their explanations systematically irrational. Rubinstein (2001) described how when everyone fails to explain a particular anomaly, suddenly a behavioral aspect to it will come up, because that can be based on completely abstract irrational assumptions. To support rationality, Rubinstein came up with two arguments. Firstly he went on to say that an irrational strategy that is profitable, will only attract copy cat firms or traders into the market. This is supported when a closer look is given towards limits to arbitrage. Secondly through the process of evolution, irrational decisions will eventually be eliminated in the long run. The major achievements characterized of the rational finance paradigm consist of the following: the principle of no arbitrage; market efficiency, the net present value decision rule, derivatives valuation techniques; Markowitzs (1952) mean-variance framework; event studies; multifactor models such as the APT, ICAPM, and the Consumption- CAPM. Despite the number of top achievements that supporters of the rational model claim, the paradigm fails to answer some of the most basic financial economic questions such as ‘What is the cost of capital for this firm? or ‘What is its optimal capital structure?; simply because of their self imposed constraints. So far this makes it seem like rational finance and behavioral finance are mutually exclusive. Contrary to this, they are actually interdependent, and overlap in several areas. Take for instance the concept of mispricing when there is no arbitrage. Behavior finance on the other hand suggests that this may not be the case; irrational assumptions in the market will still lead to mispricing. Further even though certain arbitrageurs may be able to identify irrationality induced mispricing, because of the imperfect market information, they are unable to convince investors of its existence. Over here, the rational model is accepting the existence of anomalies which are affected both through the factors of risk and chance; therefore coinciding with the perspective of behavioral finance. Two instances are clear examples of how rationalization is an important limit of arbitrage: i) the build-up and blow-up of the internet bubble; and ii) the superiority of value equity strategies. If we focus on the latter, we are able to see behavioral finance literature that highlights the superiority of such strategies in the ability of analysts to extrapolate results for investors. This is possible when rationalization is taken as a limit to arbitrage. Similarly these strategies may also limit arbitrage against mispricing, through the great risk associated with stocks. In explaining most anomalies it is essential that analysts first conclude whether pricing is rational or not. To prove their hypothesis that irrationality-induced mispricing exists, behaviouralists may find it easier if they accepted the role of rationalization in limits of arbitrage. Slow information diffusion and short-sales constraints are other factors that explain mispricing. However these factors alone cannot form the basis of a strong and concrete explanation that will clarify pricing across firms and also across time. Those supporting the rational paradigm attack behavioral finance adherents in that their predictions for the financial market have been made on irrational assumptions; that are not supported by concrete mathematical or scientific models. In their view the lack of concrete discipline in the methodology adopted in behavior finance leads to the lack of testing in their forecasts. On the other hand the rational model is criticized for its lack of success in financial predictions. The behaviouralists claim that this limitation exists because the supporters of rational finance dismiss aspects of the economic market simply because it may not fall into explainable rational behavior. Both perspectives claim to align themselves with respect to the goals of ‘testability and ‘predictions, while at the same time continue to offer evidence against the other model. In reality however, rather than being exclusively mutual both paradigms assist one another in making their predictions. BODY: A cognitive bias is a persons tendency to make errors, based on cognitive factors. Forms of cognitive bias include errors in statistical judgment, social attribution, and memory that are common to all human beings. (Crowell, 1994, p. 1) â€Å"Cognitive bias is the tendency of intelligent, well-informed people to consistently do the wrong thing†. The reason behind this cognitive bias is that the Human brain is made for interpersonal relationships and not for processing statistics. The paper discusses facility of forecasts. Generally it is said that the world is divided into two groups. One who forecasts positively and one negatively. These forecasts exaggerate the reliability of their forecasts and trace it to the â€Å"illusion of validity† which exists even when the illusionary character is recognized. (Fisher and Statman, 2000) discussed five cognitive bias, underlying the illusion of validity that are Overconfidence, Confirmation, Representativeness, Anchoring, and Hindsight (Shiller, 2002) discusses, that irrational behavior may disappear with more learning and a much more structured situation. As the past research proves it that may of cognitive biases in human judgment value uncertainty will change, they may be convinced if given proper instructions, on the part-experience of irrational behavior. There are three main themes in behavioral finance and economics Heuristics: People often make decisions based on approximate rules of thumb, not strictly rational analysis. See also cognitive biases and bounded rationality. Prospect theory Loss aversion Status quo bias Gamblers fallacy Self-serving bias Money illusion Framing: The way a problem or decision is presented to the decision maker will affect their action. Cognitive framing Mental accounting Anchoring Market inefficiencies: There are explanations for observed market outcomes that are contrary to rational expectations and market efficiency. These include mis-pricings, non-rational decision making, and return anomalies. Richard Thaler, in particular, has described specific market anomalies from a behavioral perspective. Anomalies (economic behavior) Disposition effect Endowment effect Inequity aversion Intertemporal consumption Present-biased preferences Momentum investing Greed and fear Herd behavior Anomalies (market prices and returns) Equity premium puzzle Efficiency wage hypothesis Limits to arbitrage Dividend puzzle Models in behavioral economics are typically addressed to a particular observed market anomaly and adjust standard neo-classical models by describing decision makers as using heuristics and being affected by framing effects. In general, economics sits within the neoclassical framework, though the standard assumption of rational behavior is often challenged. Loix et. Al in their paper â€Å"Orientation towards Finances† explains the individual financial management behavior, people dealing with their financial means. They have analyzed the Non-specific Financial behavior as already we see extensive research on the specific finance behavior such as saving, Taxation, Gambling, amassing debt. But they had given a lot of importance to stock market, investors and households. The analysis of general public`s behavior was done, where an ordinary man is not sure and simply act according to the guesses over their money related issues. It was also found that people interested in economic and financial matters are much more active in collecting specific information than general public, stating that financial behavior of household is an important relevant topic that needs to be discussed in much more details. Household financial management is similar to the financial management. The construct of orientation towards finances was developed where the individual ORTO FIN focuses on competencies (interest and skills). Having stronger money attitude is an indication of stronger orientation towards finances and much more effective competencies. Therefore we expect some relevance and similarity between corporate and household management behavior as both require organizing, forecasting, planning and control. (Loix et. al, 2005) analyzed general publics behavior in basically dividing them into two groups, Financial Information Personal financial planning. Also explaining some practical and theoretical gaps in the area of psychology of money usage, they concluded that ORTOFIN (Orientation towards finance) indicates the involvement of individuals in managing their finances. Proving out the point that active interest in financial information and an urge to plan expenses are two main factors. A stronger ORTFIN indicates: Greater use of debit accounts, Higher savings account, Wide variety of investments, Greater awareness of ones financial Intimate knowledge of the details of Ones savings/deposit accounts obsessed by money, Higher achievement and power in monetary terms, Further age is also inversely proportional. Shiller in 2006, in his article talked about the the co-evolution of neo-classical and behavior finance. In 1937 when A. Samuelsson one of the great economists wrote about people maximizing the present value of utility subject to a present vale budget constraint. Another judgment he realized was time being consistent human behavior where if at any time t 0 Where people reconsidered the problem of maximization from that date forward, they would not change their decision where as in real life it is totally opposite for example people sometimes try to control themselves by binding their future decision as from history we find out that that some of man make irrevocable trust in the taking out of life insurance as a compulsory savings measure. (shiller, 2006, p.) Considering personal saving rate, saving and down for no reason has emerged as a weakness of human self control. People seem to be vulnerable to complacency from time to time about providing for their own future. The distinction between neoclassical and behavioral finance have therefore been exaggerated. Both of them are not completely different from each other. Behavioral finance is more elastic willing to learn from other sciences and less concerned about the elegance of models whereby explaining human behavior Investing and cognitive bias: Money Managers Money management is a very popular phenomenon. The performance in the stock market is measured at the daily basis and not to wait for a highly subjective annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, the more confident one becomes of ones ability to succeed, clients support them by trusting them that eventually helps their careers. But the truth is that few money managers put in sufficient amount of time and effort to figure out what works and develop a set of investment principles to guide their investment decisions (Browne, 2000). Further Browne discussed the importance of asset allocation and risk aversion, in order to understand why we do what we do regardless of whether it is rational or not. General public opts for money Managers to deal with their finances and these managers are categorized in three ways: Value Managers, Growth Managers and Market Neutral Managers. The vast majority of money managers are categorized as either value managers or growth managers although a third category, market neutral managers, is gaining popularity these days and may soon rival the so-called strategies of value and growth. Some investment management firms even are being cautious by offering all styles of investments. What too few money managers do is analyze the fundamental financial characteristics of portfolios that produce long-term market beating results, and develop a set of investment principles that are based on those findings. Difference of opinion on the definition of Value is the problem.The reasons for this are two-fold, one being the practical reality of managing large sums of money, and the other related to behavior. As the assets under management of an advisor grow, the universe of potential stocks shrinks Analyzing that why individual and professional investors do not change their behavior even when they face empirical evidence, that suggests that their decisions are less than optimal. An answer to this question is said to be that being a contrarian may simply be too risky for the average individual or professional. If a person is wrong on the collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less than if a person is wrong alone. The herd instinct allows for the comfort of safety in numbers. The other reason is that individuals try to behave the same way and do not tend to change courses of action if they are happy. If the results are not too painful individuals can be happy with sub-optimal results. Moreover, individuals who tend to be unhappy make changes often and eventually end up being just as unhappy in their new circumstances. According to the traditional view of Investment management, fundamental forces drive markets, however many other investment firms considers to be active and working out based on their experienced Judgment. It is also believed that Judgmental overrides of Value Fundamental forces of markets can be lethal as well as a cause of Financial Disappointment. From the history it has been found that people Override at the wrong times and in most cases would be better off sticking to their investment disciplines (Crowell, 1994) and the reason to this behavior is the Cognitive bias. According to many researchers, stocks of small companies with low price/book ratios provide excess returns. Therefore, given a choice among small cheap stocks large high priced stocks, prominent investors (financial analysts, senior company executives and company directors) will certainly prefer the small cheap ones. But the fact is opposite to this situation where these prominent investors would opt for large high priced ones and so suffer from cognitive bias and further regret. According to a survey in 1992/1993, a research was carried out that included senior executives directors where they were suppose to rate companies in their industries on eight factors: Quality of management, Quality of products services, Innovativeness, Long term investment value, Financial soundness, Ability to attract, develop and keep talented people, Responsibility to the community and environment, Wise use of corporate assets. The assumptions that we made were that that â€Å"Long term investment value should be negatively correlated with size since small stocks provide superior returns. Long term Investment value should have a negative correlation with Price/book since low Price/Book stocks provide superior returns†.(Crowell, 1994). Whereas the results of the survey were contrary that stated that Long Term Investment had a positive correlation with the size and also that the Long term investment value had a positive correlation with the Price/Book stocks. According to Shefrin and statman, prominent investors overestimate the probability that a good company is a good stock, relying on the representative heuristics, concluding that superior companies make superior stocks. Aversion to Regret: aversion to regret is different from aversion to risk, Regret is acute when the individual must take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of the stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, we find there are two major Cognitive errors: â€Å"We have a double cognitive error: a Good company make good stocks (representativeness), and involves less responsibility(Less aversion to regret† (Crowell, 1994,p.3) The Anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further Taking the responsibility for the actions to improve their performance in the future. The reasons for all the available disciplines, tools, and quantitative techniques is to deal with the Cognitive bias error, where the quantitative investment techniques enables the investment managers to overcome cognitive bias, follow sound investment, and eventually be successful contrarian investor(one who rejects the majority opinion, as in economic matters). Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. With the help of two very important examples Shiller explains how Government involvement can influence financial investments of individuals. In April 2005 â€Å"Tony Blair† stated a program when all new born babies were given a birthday present of 250 to 500. The present were to choose among a number of investment alternatives to invest until child comes of age. This is an effect done in order to make the parents feel connected with investments and modern economy. Another example: as it is said that people should be heavily active in stock market when they are young and so generally should reduce the activity with age. According to the conventional rule people should have 100 Age = % age of investment In 2005 president bush also portfolio announced one such plan for personal account â€Å"life cycle fund† which would be among the option that works will be offered to invest their personal account. It was A centerpiece of the presidents proposal bur a major point to be noticed was the default option. An important aspect of behavioral finance is the human attention is capricious focuses heavily tat same times on financial calculations and are subject to distraction and dissipation of default option is central. All this brings us a question that what should an intertemporal optimizer do to manage his portfolio over the lifetime. According to Samuelson someone who wished to maximize the expected value of his intertemporal utility function by managing the allocation of the portfolio between a high yielding asset and less yielding asset would not actually change the allocation through time. Neoclassic finance appears highly relevant to such a discussion in that it offers the appropriate theoretical framework for considering what people ought to do with the portfolio if not what they actually do. Behavioral is beginning to play an important role in public policy such as in social security reforms. Agents Rationality: Global culture Culture Social Contagion: The selective attention exhibited by a human mind is the concept of culture. Every nation, tribe or asocial group has a social cognition reinforced by conversation ritual and symbols, rituals and supposition of a particular nation has a subtle but far reliability affect on human behavior. Some researchers found that the unique customs of people actually arise as a logical consequence of a belief system of a nation group of people. Cultural factor were found to have great influence on rational or irrational behavior. We find many factors that are same across countries , e.g fashion, music, movies, youthful rebellious, other than these we find more factors in producing internationally- similar human behaviors then just rational reactions. Therefore it is a difficult job to decide in what avenues global culture exerts Efficient Markets Hypothesis (EMH) Efficient Markets Hypothesis (EMH) INTRODUCTION: Much of modern investment theory and practice is predicated on the Efficient Markets Hypothesis (EMH), the assumption that markets fully and instantaneously integrate all available information into market prices. Underlying this comprehensive idea is the assumption that the market participants are perfectly rational, and always act in self-interest, making optimal decisions. These assumptions have been challenged. It is difficult to tip over the Neo classical convention that has yielded such insights as portfolio optimization, the â€Å"Capital Asset Pricing Model†, the â€Å"Arbitrage Pricing Theory†, the â€Å"Cox Ingersoll-Ross theory† of the term structure of interest rates, and the â€Å"Black-S[choles/Merton option pricing model†, all of which are predicated on the EMH (Efficient Market Hypothesis) in one way or another. At few points the EMH criticizes the existing literature of behavioral finance, which shows the difference of opinion on psychology economics. The field of psychology has its roots in empirical observation, controlled experimentation, and clinical applications. According to psychology, behavior is the main entity of study, and only after controlled experimental dimensions do psychologists attempt to make inferences about the origins of such behavior. On the contrary, economists typically derive behavior axiomatically from simple principles such as expected utility maximization, making it easier for us to predict economic behavior that are routinely refuted empirically The biggest threats to Modern Portfolio theory is the theory of Behavioral Finance. It is an analysis of why investors make irrational decisions with respect to their money, normal distribution of expected returns generally appears to be invalid and also that the investors support upside risks rather than downside risks. The theory of Behavioral finance is opposite to the traditional theory of Finance which deals with human emotions, sentiments, conditions, biases on collective as well as individual basis. Behavior finance theory is helpful in explaining the past practices of investors and also to determine the future of investors. Behavioral finance is a concept of finance which deals with finances incorporating findings from psychology sociology. It is reviewed that behavioral finance is generally based on individual behavior or on the implication for financial market outcomes. There are many models explaining behavioral finance that explains investors behavior or market irregularities where the rational models fail to provide adequate information. We do not expect such a research to provide a method to make lots of money from the inefficient financial market very fast. Behavioral finance has basically emerged from the theories of psychology, sociology and anthropology the implications of these theories appear to be significant for the efficient market hypothesis, that is based on the positive notion that people behave rationally, maximize their utility and are able to prices observation, a number of anomalies (irregularities) have appeared, which in turn suggest that in the efficient market the principle of rational behavior is not always correct. So, the idea of analyzing other model of human behavior has came up. Further (Gervais, 2001) explained the concept where he says that People like to relate to the stock market as a person having different moods, it can be bad-tempered or high-spirited, it can overreact one day and make amends the next. As we know that human behavior is unpredictable and it behaves differently in different situations. Lately many researchers have suggested the idea that psychological analysis of investors may be very helpful in understanding the financial markets better. To do so it is important to understand the behavioral finance presenting the concept that Investors are not as rational as traditional theory has assumed, and biases in their decision-making can have a cumulative effect on asset prices. To many researchers behavioral finance is a revolution, transforming how people see the markets and what influences prices. The paradigm is shifting. People are continuing to walk across the border from the traditional to the behavioral camp†. (Gervais, 2001, P.2) . On the contrary some people believe that may be its too early call it a revolution. Eugene Fama( Gervais, 2001) argued that Behavioral finance has not really shown impacts on the world prices, and the models contradict each other on different point of times. He gave little credit to behaviorist explanations of trends and anomalies(any occurrence or object that is strange, unusual, or unique) arguing that data-mining techniques make it possible to locate patterns. Other researchers have also criticized the idea that the behavioral finance models tend to replace the traditional models of market functions. The weaknesses in this area, explained by him (Gervais, 2001) are that generally the market behavior displayed is attributed to overreaction and sometimes to under reaction. Where People take the behavior that seems to be easy for the particular study regardless of the fact that whether these biases are the result of underlying economic forces or not. Secondly, Lack of trained and expert people. The field does not have enough trained professionals both academic psychology and traditional finance and so the models that are being put up together are improvised. David Hirshleifer (Gervais, 2001) focuses on the individual behavior influencing asset prices, suggesting that behavioral finance is in its developmental stage and not yet a mature one, theres a lot of disagreement but productive one. Hirshleifer agrees that applying behavioral-finance concepts to corporate finance can pay off. If managers are imperfectly rational, he says, perhaps they are not evaluating investments correctly. They may make bad choices in their capital-structure decisions. Few people realistically think behavioral finance will displace efficient-markets theory. On the other hand, the idea that investors and managers are not uniformly rational makes insightful sense to many people. Traditional Finance Empirical Evidence: â€Å"Traditional theory assumes that agents are rational the law of one price holds† that is a perfect scenario. Where the law of â€Å"One price† states that securities with the same pay off have same price, but in real world this law is violated when people purchase securities in one market for immediate resale in another, in search of higher profits because of price differentials known as â€Å"Arbitrageurs†. And the agents rationality explains the behavior of investor â€Å"Professional Individual† which is generally inconsistent with the rationality or the future predictions. If a market achieves a perfect scenario where agents are rational law of one price holds then the market is efficient. With the availability of amount of information, the form of market changes. It is unlikely that market prices contain all private information. The presence of â€Å"noise traders† (traders, trading randomly not based on information). Researches show that stock returns are typically unpredictable based on past returns where as future returns are predictable to some extent. Few examples from the past literature explains the problem of irrationality which occurs because of naà ¯ve diversification, behavior influenced by framing, the tendency of investors of committing systematic errors while evaluating public information.(Glaser et al, 2003) Recent studies suggest that peoples` attitude towards the riskiness of a stock in future the individual interpretation may explain the higher level trading volume, which itself is a vast topic for insight. A problem of perception exist in the investors that Stocks have a higher risk adjusted returns than bonds. Another issue with the investors is that these investors either care about the whole stock portfolio or just about the value of each single security in their portfolio and thus ignore the correlations. The concept of ownership society has been promoted in the recent years where people can take better care of their own lives and be better citizen too if they are both owner of financial assets and homeowners. As a researcher suggested that in order to improve the lives of less advantaged in our society is to teach them how to be capitalist, In order to put the ownership society in its right perspective, behavioral finance is needed to be understood. The ownership society seems very attractive when people appear to make profits from their investments. Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. (Shiller, 2006) According to (Glaser et al, 2003) there are two approaches towards Behavioral Finance, where both tend to have same goals. The goals tend to explain observed prices, Market trading Volume Last but not the least is the individual behavior better than traditional finance models. Belief Based Model: Psychology (Individual Behavior) Incorporates into Model Market prices Transaction Volume. It includes findings such as Overconfidence, Biased Self- Attrition, and Conservatism Representativeness. Preference Based Model: Rational Friction or from psychology Find explanations, Market detects irregularities individual behavior. It incorporates Prospect Theory, House money effect other forms of mental accounting. Behavioral Finance and Rational debate: The article by (Heaton and Rosenberg,2004) highlights the debate between the rational and behavioral model over testability and predictive success. And we find that neither of them actually offers either of these measures of success. The rational approach uses a particular type of rationalization methodology; which goes on to form the basis of behavior finance predictions. A closer look into the rational finance model goes on to show that it employs ex post rationalizations of observed price behaviours. This allows them greater flexibility when offering explanations for economic anomalies. On the other hand the behavior paradigm criticizes rationalizations as having no concrete role in predicting prices accurately, that utility functions, information sets and transaction costs cannot be ‘rationalized. Ironically they also reject the rational finances explanatory power which plays an essential role in the limits of arbitrage, which actually makes behavioral finance possible. Milton Friedmans theory lays the basis of positive economics. His methodology focuses on how to make a particular prediction; it is irrelevant whether a particular assumption is rational or irrational. According to this methodology, the rational finance model relies on a limited â€Å"assumption space since all assumptions that are supposedly not rational have been eliminated. This is one of the major reasons behind the little success in rational finance predictions. Despite the minimal results, adherents of this model have criticized the behavioral model as lacking quantifiable predictions that are based on mathematical models. Rational finance has targeted a more important aspect in the structure of the economy, i.e. investor uncertainty, which further cause financial anomalies. In explaining these assertions, the behavioural emphasises the importance of taking limits in arbitrage. Friedmans methodological approach falls into the category ‘instrumentalism, which basically states that theories are tools for predictions and used to draw inferences. Whether an assumption is realistic or rational is of no value to an instrumentalist. By narrowing what may or may not be possible, one will inevitably eliminate certain strategies or behaviors which might in fact go on to maximize utility or profits based on their uniqueness. An assumption could be irrational even in the long run, but it is continuously revised and refined to make it into something useful. In opposition to this, many individuals have gone on to say that behaviouralists are not bound by any constraints thus making their explanations systematically irrational. Rubinstein (2001) described how when everyone fails to explain a particular anomaly, suddenly a behavioral aspect to it will come up, because that can be based on completely abstract irrational assumptions. To support rationality, Rubinstein came up with two arguments. Firstly he went on to say that an irrational strategy that is profitable, will only attract copy cat firms or traders into the market. This is supported when a closer look is given towards limits to arbitrage. Secondly through the process of evolution, irrational decisions will eventually be eliminated in the long run. The major achievements characterized of the rational finance paradigm consist of the following: the principle of no arbitrage; market efficiency, the net present value decision rule, derivatives valuation techniques; Markowitzs (1952) mean-variance framework; event studies; multifactor models such as the APT, ICAPM, and the Consumption- CAPM. Despite the number of top achievements that supporters of the rational model claim, the paradigm fails to answer some of the most basic financial economic questions such as ‘What is the cost of capital for this firm? or ‘What is its optimal capital structure?; simply because of their self imposed constraints. So far this makes it seem like rational finance and behavioral finance are mutually exclusive. Contrary to this, they are actually interdependent, and overlap in several areas. Take for instance the concept of mispricing when there is no arbitrage. Behavior finance on the other hand suggests that this may not be the case; irrational assumptions in the market will still lead to mispricing. Further even though certain arbitrageurs may be able to identify irrationality induced mispricing, because of the imperfect market information, they are unable to convince investors of its existence. Over here, the rational model is accepting the existence of anomalies which are affected both through the factors of risk and chance; therefore coinciding with the perspective of behavioral finance. Two instances are clear examples of how rationalization is an important limit of arbitrage: i) the build-up and blow-up of the internet bubble; and ii) the superiority of value equity strategies. If we focus on the latter, we are able to see behavioral finance literature that highlights the superiority of such strategies in the ability of analysts to extrapolate results for investors. This is possible when rationalization is taken as a limit to arbitrage. Similarly these strategies may also limit arbitrage against mispricing, through the great risk associated with stocks. In explaining most anomalies it is essential that analysts first conclude whether pricing is rational or not. To prove their hypothesis that irrationality-induced mispricing exists, behaviouralists may find it easier if they accepted the role of rationalization in limits of arbitrage. Slow information diffusion and short-sales constraints are other factors that explain mispricing. However these factors alone cannot form the basis of a strong and concrete explanation that will clarify pricing across firms and also across time. Those supporting the rational paradigm attack behavioral finance adherents in that their predictions for the financial market have been made on irrational assumptions; that are not supported by concrete mathematical or scientific models. In their view the lack of concrete discipline in the methodology adopted in behavior finance leads to the lack of testing in their forecasts. On the other hand the rational model is criticized for its lack of success in financial predictions. The behaviouralists claim that this limitation exists because the supporters of rational finance dismiss aspects of the economic market simply because it may not fall into explainable rational behavior. Both perspectives claim to align themselves with respect to the goals of ‘testability and ‘predictions, while at the same time continue to offer evidence against the other model. In reality however, rather than being exclusively mutual both paradigms assist one another in making their predictions. BODY: A cognitive bias is a persons tendency to make errors, based on cognitive factors. Forms of cognitive bias include errors in statistical judgment, social attribution, and memory that are common to all human beings. (Crowell, 1994, p. 1) â€Å"Cognitive bias is the tendency of intelligent, well-informed people to consistently do the wrong thing†. The reason behind this cognitive bias is that the Human brain is made for interpersonal relationships and not for processing statistics. The paper discusses facility of forecasts. Generally it is said that the world is divided into two groups. One who forecasts positively and one negatively. These forecasts exaggerate the reliability of their forecasts and trace it to the â€Å"illusion of validity† which exists even when the illusionary character is recognized. (Fisher and Statman, 2000) discussed five cognitive bias, underlying the illusion of validity that are Overconfidence, Confirmation, Representativeness, Anchoring, and Hindsight (Shiller, 2002) discusses, that irrational behavior may disappear with more learning and a much more structured situation. As the past research proves it that may of cognitive biases in human judgment value uncertainty will change, they may be convinced if given proper instructions, on the part-experience of irrational behavior. There are three main themes in behavioral finance and economics Heuristics: People often make decisions based on approximate rules of thumb, not strictly rational analysis. See also cognitive biases and bounded rationality. Prospect theory Loss aversion Status quo bias Gamblers fallacy Self-serving bias Money illusion Framing: The way a problem or decision is presented to the decision maker will affect their action. Cognitive framing Mental accounting Anchoring Market inefficiencies: There are explanations for observed market outcomes that are contrary to rational expectations and market efficiency. These include mis-pricings, non-rational decision making, and return anomalies. Richard Thaler, in particular, has described specific market anomalies from a behavioral perspective. Anomalies (economic behavior) Disposition effect Endowment effect Inequity aversion Intertemporal consumption Present-biased preferences Momentum investing Greed and fear Herd behavior Anomalies (market prices and returns) Equity premium puzzle Efficiency wage hypothesis Limits to arbitrage Dividend puzzle Models in behavioral economics are typically addressed to a particular observed market anomaly and adjust standard neo-classical models by describing decision makers as using heuristics and being affected by framing effects. In general, economics sits within the neoclassical framework, though the standard assumption of rational behavior is often challenged. Loix et. Al in their paper â€Å"Orientation towards Finances† explains the individual financial management behavior, people dealing with their financial means. They have analyzed the Non-specific Financial behavior as already we see extensive research on the specific finance behavior such as saving, Taxation, Gambling, amassing debt. But they had given a lot of importance to stock market, investors and households. The analysis of general public`s behavior was done, where an ordinary man is not sure and simply act according to the guesses over their money related issues. It was also found that people interested in economic and financial matters are much more active in collecting specific information than general public, stating that financial behavior of household is an important relevant topic that needs to be discussed in much more details. Household financial management is similar to the financial management. The construct of orientation towards finances was developed where the individual ORTO FIN focuses on competencies (interest and skills). Having stronger money attitude is an indication of stronger orientation towards finances and much more effective competencies. Therefore we expect some relevance and similarity between corporate and household management behavior as both require organizing, forecasting, planning and control. (Loix et. al, 2005) analyzed general publics behavior in basically dividing them into two groups, Financial Information Personal financial planning. Also explaining some practical and theoretical gaps in the area of psychology of money usage, they concluded that ORTOFIN (Orientation towards finance) indicates the involvement of individuals in managing their finances. Proving out the point that active interest in financial information and an urge to plan expenses are two main factors. A stronger ORTFIN indicates: Greater use of debit accounts, Higher savings account, Wide variety of investments, Greater awareness of ones financial Intimate knowledge of the details of Ones savings/deposit accounts obsessed by money, Higher achievement and power in monetary terms, Further age is also inversely proportional. Shiller in 2006, in his article talked about the the co-evolution of neo-classical and behavior finance. In 1937 when A. Samuelsson one of the great economists wrote about people maximizing the present value of utility subject to a present vale budget constraint. Another judgment he realized was time being consistent human behavior where if at any time t 0 Where people reconsidered the problem of maximization from that date forward, they would not change their decision where as in real life it is totally opposite for example people sometimes try to control themselves by binding their future decision as from history we find out that that some of man make irrevocable trust in the taking out of life insurance as a compulsory savings measure. (shiller, 2006, p.) Considering personal saving rate, saving and down for no reason has emerged as a weakness of human self control. People seem to be vulnerable to complacency from time to time about providing for their own future. The distinction between neoclassical and behavioral finance have therefore been exaggerated. Both of them are not completely different from each other. Behavioral finance is more elastic willing to learn from other sciences and less concerned about the elegance of models whereby explaining human behavior Investing and cognitive bias: Money Managers Money management is a very popular phenomenon. The performance in the stock market is measured at the daily basis and not to wait for a highly subjective annual review of ones performance by ones superior. Market grades you on a daily basis. The smarter one is, the more confident one becomes of ones ability to succeed, clients support them by trusting them that eventually helps their careers. But the truth is that few money managers put in sufficient amount of time and effort to figure out what works and develop a set of investment principles to guide their investment decisions (Browne, 2000). Further Browne discussed the importance of asset allocation and risk aversion, in order to understand why we do what we do regardless of whether it is rational or not. General public opts for money Managers to deal with their finances and these managers are categorized in three ways: Value Managers, Growth Managers and Market Neutral Managers. The vast majority of money managers are categorized as either value managers or growth managers although a third category, market neutral managers, is gaining popularity these days and may soon rival the so-called strategies of value and growth. Some investment management firms even are being cautious by offering all styles of investments. What too few money managers do is analyze the fundamental financial characteristics of portfolios that produce long-term market beating results, and develop a set of investment principles that are based on those findings. Difference of opinion on the definition of Value is the problem.The reasons for this are two-fold, one being the practical reality of managing large sums of money, and the other related to behavior. As the assets under management of an advisor grow, the universe of potential stocks shrinks Analyzing that why individual and professional investors do not change their behavior even when they face empirical evidence, that suggests that their decisions are less than optimal. An answer to this question is said to be that being a contrarian may simply be too risky for the average individual or professional. If a person is wrong on the collective basis, where everyone else also had made a mistake, the consequences professionally and for ones own self-esteem are far less than if a person is wrong alone. The herd instinct allows for the comfort of safety in numbers. The other reason is that individuals try to behave the same way and do not tend to change courses of action if they are happy. If the results are not too painful individuals can be happy with sub-optimal results. Moreover, individuals who tend to be unhappy make changes often and eventually end up being just as unhappy in their new circumstances. According to the traditional view of Investment management, fundamental forces drive markets, however many other investment firms considers to be active and working out based on their experienced Judgment. It is also believed that Judgmental overrides of Value Fundamental forces of markets can be lethal as well as a cause of Financial Disappointment. From the history it has been found that people Override at the wrong times and in most cases would be better off sticking to their investment disciplines (Crowell, 1994) and the reason to this behavior is the Cognitive bias. According to many researchers, stocks of small companies with low price/book ratios provide excess returns. Therefore, given a choice among small cheap stocks large high priced stocks, prominent investors (financial analysts, senior company executives and company directors) will certainly prefer the small cheap ones. But the fact is opposite to this situation where these prominent investors would opt for large high priced ones and so suffer from cognitive bias and further regret. According to a survey in 1992/1993, a research was carried out that included senior executives directors where they were suppose to rate companies in their industries on eight factors: Quality of management, Quality of products services, Innovativeness, Long term investment value, Financial soundness, Ability to attract, develop and keep talented people, Responsibility to the community and environment, Wise use of corporate assets. The assumptions that we made were that that â€Å"Long term investment value should be negatively correlated with size since small stocks provide superior returns. Long term Investment value should have a negative correlation with Price/book since low Price/Book stocks provide superior returns†.(Crowell, 1994). Whereas the results of the survey were contrary that stated that Long Term Investment had a positive correlation with the size and also that the Long term investment value had a positive correlation with the Price/Book stocks. According to Shefrin and statman, prominent investors overestimate the probability that a good company is a good stock, relying on the representative heuristics, concluding that superior companies make superior stocks. Aversion to Regret: aversion to regret is different from aversion to risk, Regret is acute when the individual must take responsibility for the final outcome. Aversion to regret leads to a preference for stocks of good companies. The choice of the stocks of bad companies involves more personal responsibility and higher probability of regret. Therefore, we find there are two major Cognitive errors: â€Å"We have a double cognitive error: a Good company make good stocks (representativeness), and involves less responsibility(Less aversion to regret† (Crowell, 1994,p.3) The Anti Cognitive bias actions would be admitting to your owned stocks, admitting earlier investment mistakes. Further Taking the responsibility for the actions to improve their performance in the future. The reasons for all the available disciplines, tools, and quantitative techniques is to deal with the Cognitive bias error, where the quantitative investment techniques enables the investment managers to overcome cognitive bias, follow sound investment, and eventually be successful contrarian investor(one who rejects the majority opinion, as in economic matters). Behavioral finance also is very helpful in understanding justifying government involvement in the investing decisions of individuals. The failure of millions of people to save properly for their future is also a core problem of behavioral finance. With the help of two very important examples Shiller explains how Government involvement can influence financial investments of individuals. In April 2005 â€Å"Tony Blair† stated a program when all new born babies were given a birthday present of 250 to 500. The present were to choose among a number of investment alternatives to invest until child comes of age. This is an effect done in order to make the parents feel connected with investments and modern economy. Another example: as it is said that people should be heavily active in stock market when they are young and so generally should reduce the activity with age. According to the conventional rule people should have 100 Age = % age of investment In 2005 president bush also portfolio announced one such plan for personal account â€Å"life cycle fund† which would be among the option that works will be offered to invest their personal account. It was A centerpiece of the presidents proposal bur a major point to be noticed was the default option. An important aspect of behavioral finance is the human attention is capricious focuses heavily tat same times on financial calculations and are subject to distraction and dissipation of default option is central. All this brings us a question that what should an intertemporal optimizer do to manage his portfolio over the lifetime. According to Samuelson someone who wished to maximize the expected value of his intertemporal utility function by managing the allocation of the portfolio between a high yielding asset and less yielding asset would not actually change the allocation through time. Neoclassic finance appears highly relevant to such a discussion in that it offers the appropriate theoretical framework for considering what people ought to do with the portfolio if not what they actually do. Behavioral is beginning to play an important role in public policy such as in social security reforms. Agents Rationality: Global culture Culture Social Contagion: The selective attention exhibited by a human mind is the concept of culture. Every nation, tribe or asocial group has a social cognition reinforced by conversation ritual and symbols, rituals and supposition of a particular nation has a subtle but far reliability affect on human behavior. Some researchers found that the unique customs of people actually arise as a logical consequence of a belief system of a nation group of people. Cultural factor were found to have great influence on rational or irrational behavior. We find many factors that are same across countries , e.g fashion, music, movies, youthful rebellious, other than these we find more factors in producing internationally- similar human behaviors then just rational reactions. Therefore it is a difficult job to decide in what avenues global culture exerts

In Defense of Patenting You and Your Family :: essays research papers fc

In Defense of Patenting You and Your Family How would you feel if I told you that I am the new proud owner of you and your family? That is, that I have been granted a United States patent on the DNA sequence particular to your line of descent because I have identified a unique property of your genetic material. A few cultured cells with your genetic makeup, added to lotion and rubbed on the skin, allow one to look younger, wrinkle-free, and be less susceptible to skin cancer. Of course this does not mean that I have control over yours and your family’s actions – only over the application of your DNA to skin care. If you feel like you may have hit the jackpot, then prepare for another disappointment – you are not entitled to any portion of my profits, nor are you rewarded for having such supple genes. Under current patent law, living entities are not patentable in their natural state, which means that you cannot patent your own body1. Other requirements for a patent is that the invention or design is novel – no one else made it public; innovative – it can’t be a development which is obvious; and useful – it has to aid a practical human activity. British woman, Donna MacLean found out that she can’t patent her own body when she became the first person to try to patent herself in early 2000. Her patent application was titled â€Å"Myself† and her reason for trying to do it was as good as any. â€Å"It has taken 30 years of hard labour for me to discover and invent myself, and now I wish to protect my invention from unauthorized exploitation, genetic or otherwise,† MacLean told the British newspaper â€Å"The Guardian.† So Donna and your family will not become wealthy from your respectable DNA, but let’s not discredit our legal system yet. Perhaps the system is accurate after all, and the issues are more complex than they appear at first glance.   Ã‚  Ã‚  Ã‚  Ã‚  No matter where your family is from, the US, Britain, or Kenya, the controversial race of biotech companies to own human DNA is having its affect. For example, imagine another family from a third-world country, let’s say somewhere in Africa, and that bioprospectors from the US have isolated an HIV immunity gene from the father’s saliva. The bioprospectors then develop a revolutionary treatment for AIDS, which costthem millions of dollars to research.

Negative Potential of Video Games Essay

Controversial subjects comes in all forms and fashions and sometimes presents disagreements within. The controversial subject that I have chosen has been around for many years and have allowed individuals to take a stand for their opinions about the situation. â€Å"The debates on video games violence has arguably been narrow, in that it assumes that such games have only negative effects and ignores the possibility of positive effects†. (Ferguson, C.  J, 2007) Within the Article it provides stability and creditability in the problem of violence in video games. The Article is called Negative Potential of Video Games by Russell Sabella, but instead of focusing on the facts of how and why this is an issue it provides facts the boys demonstrate these acts far more and singling this gender out within the article. With the validity of this important information that needs to motivate our youth this article depicts that boys will see and demonstrate more violent acts. Understanding that the main focus should be the youth, only boys were singles out and this article also assumed that boys show a greater tendencies to be aggressive due to the motivation of video games â€Å"This is especially true for boys who seem to show greater tendencies to be aggressive and to seek out higher media violence exposure†. (Russell A. Sabella Ph. D. , 2013) Video games contributing to youth violence and have demonstrated negative actions which caused support groups to stop the creation, sales, or renting to individuals under the age of 18 due to negative acts of harm represented by the youth. The influence that the video games present to the youth consist of aggressive behavior, violence, school shootings and even bullying. â€Å"Recent highly publicized school shootings; reports of gang; young people obsessed with violent video games, movies, and song lyrics; and media prone to publicize all incidents of violence no matter how tragic or trivial have left us with a sense of crisis and eminent danger†. (Huffine, C. W. , 2003) Reliability, creditability, and validity becomes highly important when it shares information to individuals on this subject. Being able to support facts and the subject at hand has to be done officially to allow the correct person which is the youth to understand the severity and the problem clearly. When identifying logical fallacies in the argument which is the effect of not being real and or false, this argument gives great logics for the reason of violence within. It provides the reader with the ability to understand evidence and negative effects of inappropriate video games. Within the article it even breaks down the issues of violence and desensitization to provide the best advice for the problem.

Become a Better Student With These English Study Tips

Become a Better Student With These English Study Tips Learning a new language like English can be a challenge, but with regular study it can be done. Classes are important, but so is disciplined practice. It can even be fun. Here are some guidelines to help you improve your reading and comprehension skills and become a better English student. Study Every Day Learning any new language is a time-consuming process, more than 300 hours by some estimates. Rather than try and cram a few hours of review in once or twice a week, most experts say short, regular study sessions are more effective. As little as 30 minutes a day can help you improve your English skills over time. Keep Things Fresh Instead of focusing on one single task for the entire study session, try mixing things up. Study a little grammar, then do a short listening exercise, then perhaps read an article on the same topic. Dont do too much, 20 minutes on three different exercises is plenty. The variety will keep you engaged and make studying more fun. Read, Watch, and Listen. A lot. Reading English-language newspapers and books, listening to music, or watching TV can also help you improve your written and verbal comprehension skills. By doing so repeatedly, youll begin to unconsciously absorb things like pronunciation, speech patterns, accents, and grammar. (Scientists call this phenomenon indirect learning). Keep pen and paper handy and write down words you read or hear that are unfamiliar. Then, do some research to learn what those new words mean. Use them the next time you are role-playing dialogue in class. Learn the Sounds Separately Non-native English speakers sometimes struggle with certain word pronunciations because they do not have similar sounds in their native tongue. Likewise, two words may be spelled very similarly, yet be pronounced quite different (for instance, tough and though). Or you may encounter combinations of letters where one of them is silent (for example, the K in knife). You can find plenty of English pronunciation videos on YouTube, such as this one on using words that begin with L and R.   Watch Out for Homophones Homophones are words that are pronounced the same way, but are spelled differently and/or  have different meanings. There are a number of homophones in the English language, which is one of the reasons why it can so challenging to learn. Consider this sentence: Pack your clothes, then close the suitcase. Both clothes and close sound the same, but they are spelled differently and have different meanings. Practice Your Prepositions Even advanced students of English can struggle to learn prepositions, which are used to describe duration, position, direction, and relationships between objects. There are literally dozens of prepositions in the English language (some of the most common include of, on, and for) and few hard rules for when to use them. Instead, experts say, the best way to learn prepositions to memorize them and practice using them in sentences. Study lists such as this one are a good place to begin.   PlayVocabulary and Grammar Games You can also improve your English skills by playing vocabulary games that are related to what youre studying in class. For example, if you are going to study English on topics that focus on vacations, take a moment to think about your last trip and what you did. Make a list of all the words you might use to describe your activities. You can play a similar game with grammar reviews. For example, if you are going to study conjugating verbs in the past tense, stop to think about what you did last weekend. Make a list of the verbs you use and review the various tenses. Dont be afraid to consult reference materials if you get stuck.  These two exercises will help you prepare for class by making you think critically about vocabulary and usage. Write It Down Repetition is key as youre learning English, and writing exercises are a great way to practice. Take 30 minutes at the end of class or study to write down what happened during your day. It doesnt matter whether you use a computer or pen and paper. By making a habit of writing, youll find your reading and comprehension skills improve over time. Once youre comfortable writing about your day, challenge yourself and have some fun with creative writing exercises. Choose a photo from a book or magazine and describe it in a short paragraph, or write a short story or poem about someone you know well. You can also practice your letter-writing skills. Youll have fun and become a better English student. You may even discover youve got a talent for writing.

Do You Need a High School Diploma

Do You Need a High School Diploma SAT / ACT Prep Online Guides and Tips If you didn't graduate from high school, going back and finishing it so you can finally get your high school diploma is a practical step. But if you’re an adult well past your teenage years, the prospect of going back to high school can be pretty intimidating.Fortunately, there are alternative ways adults can earn a high school diploma. Read on to learn more about what the general steps are for getting a high school diploma, how important having the physical diploma is, whether you can attend college without a high school diploma, and what your options are for legitimate adult high school diploma programs. Do You Need to Graduate to Get a High School Diploma? In general, to earn a high school diploma in the US, you need to have completed 12th grade and graduated high school. More specifically, you need to have met all of your state’s graduation requirements and taken all required courses. This is the most common path for getting a high school diploma. But what if you left high school before you had the chance to graduate? In this case, you can get a high school diploma by taking the classes you need to fulfill your state’s high school graduation and credit requirements. For example, if you were one English course short of graduating, you could enroll in an adult high school diploma program, through which you'd take the English class you need to get the diploma. If you need a lot of credits to finish high school (for instance, maybe you missed a whole grade of high school), another option is to take a high school equivalency test, such as the GED, HiSET, or TASC tests. By passing one of these tests, you’ll receive a diploma or certificate that's similar to a high school diploma and indicates that you’ve achieved US high school educational standards. This is called a high school equivalency diploma. In most cases, a high school equivalency diploma is equivalent to a high school diploma; however, some universities and employers prefer a traditional high school diploma over one of these equivalents and, as a result, might look down on it. Ifyou're younger than your state's age for enrolling in high school, I strongly recommend going back to high school to earn your regular high school diploma instead of opting for one of these equivalents. This age limit varies by state but is usually around 21 years. Unfortunately, your elementary school diploma won't help you on the job hunt. How Important Is Having a Physical High School Diploma? It’s critical tokeep your original high school diploma in a safe place.This is because potential employers and colleges might ask to see a copy of your diploma as proof that you completed high school and have the fundamental knowledge and skills needed for a particular job or educational program. Online schools are especially likely to request or require a copy of your high school diploma for enrollment purposes. Though it’s possible you’ll never have to show anyone your high school diploma (other than your proud parents), you should always have a copy of it on hand, just in case. If you lost your high school diploma or don’t remember getting a physical diploma, you can easily request a copy of yours by contacting your old high school(or, if your high school is no longer in operation, your former education department or school district). Refer toour step-by-step guide to learn more about securing a copy of your high school diploma. Can You Attend College Without a High School Diploma? The short answer is no, not usually. If you want to attend a four-year college or university with the goal of getting a bachelor’s degree, you will not be able to unless you have a high school diploma or high school equivalency diploma, such as the GED. (Note that not all colleges accept a GED in lieu of a traditional diploma.) That said, most community colleges allow students to enroll without a high school diploma. You usually just need to be at least 18 years old to enroll- that’s it! If you think you’ll eventually want to transfer to a four-year college/university from a community college, know that you’ll likely need to take the GED or an equivalent test before you can do so. How to Get a High School Diploma as an Adult: 2 Methods If you’re older than your state’s maximum age limit for enrolling in high school or would prefer an alternative way of earning a high school diploma, you have the option of doing an in-person adult high school diploma program orattendingan online high school. Method 1: In-Person Adult High School Diploma Program One way to get your high school diploma is to enroll in an adult high school diploma program. These in-person classes are specifically geared toward adults looking to return to high school and get their diplomas(instead of, say, a GED). With these programs, you'll take only the courses you need to graduate. For instance, if you’re short a math and an English class, you’d take these two classes in your adult high school diploma program, allowing you to fulfill your state's graduation requirements and thus earn a high school diploma. Most adult high school diploma programs are free or pretty cheap,and are offered on weekdays and weeknights. The best way to find a legitimate adult high school diploma program near you is to contact a public university or community college in your area. These institutions should be able to tell you whom to contact about adult education programs. You can also see what information your state's official website provides regarding adult education programs. Just search on Google for "[Your State] adult education site:.gov."For example, the Michigan state website offers a bunch of helpful information on free and low-cost adult education programs in counties all around Michigan. Always beware of online scams that claim to give out high school diplomas. These "diploma mills," as they’re called, will often charge you a high fee to take unaccredited courses, earning you afake credential that’s not recognized anywhere! If you’re not sure whether a program is legitimate, check with your state department of education. Method 2: Online High School The second way adults can earn a high school diploma is to enroll in an online high school. This option is considered more convenient than Method 1 asyou can attend class and study from the comfort of your own home, allowing you to get your high school diploma online. Many online private high schools require a fee to attend, which can be really high sometimes, especially if the program is offered through a prestigious college or university. In addition, some online high schools have an age limit, so check that you’re eligible to attend before you decide on a school. Make sure that the school you’re considering is legitimate. Many online high schools aren’t accredited (even if they claim to be) and can’t award you an authentic high school diploma. If you’re unsure whether an online high school is legitimate, contact your state's department of education. You can also get in touch with a local community college or public college/university, which will helpyou find online high schools thatare accredited and accept adult learners. Here are some well-known schools that allow you to get your high school diploma online: Stanford Online High School (no adult learners) BYU Independent Study High School(offers program for adult learners) UT Austin High School (no age restrictions) Texas Success Academy (offers program for adult learners) University of Nebraska High School (no age restrictions) Recap: Do You Need a High School Diploma? Most people earn their high school diplomas by completing 12th grade and meeting their state's high school graduation requirements. Even if you left school before you got a diploma, there are ways you can get one as an adult. Your two main options are to enroll in an in-person adult high school diploma program or attend an accredited online high school. Many prefer the latter because it’s more convenient and allows you to get your high school diploma online without having to go anywhere. As with anything you pay for, besure to vet any adult high school diploma programs (both in-person and online) you're considering attending. You don’t want to lose money to a scam that awards you with a fake credential! Reach out toyour state’s department of education to get more information about legitimate (online) schools and programs for adult learners. If you'd rather notgo back and get your high school diploma, you can insteadtake a high school equivalency test, such as the GED. While you don’t need a high school diploma to apply for jobs or enroll at a community college, having one will allow you to go to a four-year college or university. A high school diploma also means you’ll be making more money on average than if you didn’t have one! Don't feel as though there are no options available to you- you'llnever be too old to go back and get that high school diploma! What’s Next? Considering attending an online high school? Learn about how to avoid unaccredited schools and how an online education differs from a traditional one. We also maintaina list of 100+ free online high schools! For a full review of a top-notch online high school, check out our in-depth guide to Stanford Online High School. Not interested in getting a traditional high school diploma? Then considergetting a high school equivalency diploma.Our guide goes over what this diploma is and how to get one.

Would you recommend a new nation adopt a presidential or parliamentary Essay

Would you recommend a new nation adopt a presidential or parliamentary system of government in the early 21st century - Essay Example One of the good consequences of this phenomenon is that people have stopped taking their political systems for granted and have begun to think of the merits and demerits of parliamentary and presidential forms of government. This spirit of questioning can be seen even in fictional representations of the nation that question the validity of the very concept like The Shadow Lines (Ghosh 2000). There are also theorists who disagree with the very idea of difference between these two very different forms of government. For instance, the political thinker Juan J. Linz, in his article, â€Å"Presidential or parliamentary democracy: Does it make a difference?† talks of the differences that do not make a change at the level of the grassroots (1994). The failure of democracies to fulfill the aspirations of people in different nation states is a cause for worry. This does not however, mean that the very idea is dropped. This needs to be the case as a better alternative is unavailable and according to most political thinkers, impossible. The natural status that democracy has been accorded may be the reason for this; however, whether it is parliamentary or presidential democracy that is good for a single nation or all nations is a question that remains unanswered. To propose any one form of government as a one-stop solution would be a mistake. This is primarily a consequence of the fact that every single nation is different from the other and requires different forms of governments. This paper shall look at four countries- the United States of America, the United Kingdom, India and Sri Lanka. These countries represent different social and political landscapes and also different forms of government. While the United States of America follows a presidential form of governance, India and the United Kingdom are followers of the parliamentary form of government. Sri Lanka has been

HUM RELIGION WK2 DQ 1 Essay Example | Topics and Well Written Essays - 250 words

HUM RELIGION WK2 DQ 1 - Essay Example Aboriginal religion was for instance described one where the religious and profane aspects were the same thing, scholars, such as Durkheim, who was the first to carry out an in-depth study on their religion, often misunderstood it (Charlesworth, n.d). Such include practices involving activities such human sacrifice as well was certain forms of body mutilation practiced by indigenous cultures. Many, however, were just results of colonial influence, for instance, in many parts of east Africa, the British made it conditional for one to be a Christian before they could be given formal education this way many Africans were forced to abandon their original cultures. Trade was another avenue, through which western religion was spread, moreover, the Spanish conquistadors and explorers forced the original inhabitants such as Mayans to abandon their religious practices which included live human sacrifices on their temples. As a result, many of the ingenious religions either disappeared altogether or became morphed and incorporated several aspects of Christianity or Islam in them so they could conform. Early missionaries also made Christianity look more indigenous by translating the bible into different African languages such as Swahili. Africans, for example have incorporated aspects of their religious traditions such as beating of traditional drums as part of the convectional western style Christian services. Indeed, Christianity and Islam has been part of African religion so long they are considered partly ingenious to the