The Behavioral Investor with Dr. Daniel Crosby

Dr. Daniel Crosby was educated at Brigham Young and Emory Universities. He is a psychologist and behavioral finance expert who helps organizations understand the intersection of mind and markets. Dr. Crosby recently co-authored a New York Times Best-Selling book titled, Personal Benchmark: Integrating Behavioral Finance and Investment Management.

He also constructed the “Irrationality Index,” a sentiment measure that gauges greed and fear in the marketplace from month to month. His ideas have appeared in the Huffington Post and Risk Management Magazine, as well as his monthly columns for WealthManagement.com and Investment News. Daniel was named one of the “12 Thinkers to Watch” by Monster.com and a “Financial Blogger You Should Be Reading” by AARP. When he is not consulting around market psychology, Daniel enjoys independent films, fanatically following St. Louis Cardinals baseball, and spending time with his wife and two children. 

Show Notes 

  • 2:05 – How Jay got in touch with Daniel
  • 2:44 – Jay’s beard disaster
  • 4:06 – Daniel’s new book
  • 6:12 – “The Devil that you Know” concept
  • 7:57 – Intellectual laziness and laser-focus
  • 9:41 – Why Daniel always goes to the same grocery store and parks in the same spot
  • 10:45 – Taking shortcuts where there are low stakes
  • 11:31 – The 35,000+ decisions we make each day
  • 12:07 – Why a percentage of alcoholics marry other alcoholics
  • 13:38 – Why we’re wired to minimize regret, not maximize happiness
  • 16:32 – How conservatism plays into investing
  • 19:05 – Jay selling his first property at a loss and a process for deciding whether to do this or not
  • 21:08 – The decision of inaction
  • 24:40 – How to make sure you don’t fall back into that “Endowment Effect” and the importance of a post-mortem and pre-mortem
  • 26:01 – The three criteria Daniel uses to buy equities
  • 27:05 – The Magic Formula and Joel Greenblatt
  • 29:38 – The importance of sticking to your criteria for investments
  • 31:00 – How you know when you can make an informed decision
  • 32:03 – When lessons start to repeat themselves (And why this is important)
  • 32:49 – How you can not lose money
  • 33:47 – Why you should always follow your rules for investing
  • 35:02 – Jay’s favorite quote from Daniel’s book
  • 35:28 – Jay’s experiences changing jobs for the first time in 15 years
  • 37:05 – The stock market’s great run and where Daniel thinks it’s going from here
  • 40:02 – The truth about equity markets
  • 41:56 – “Atomic Habits” and paying attention to cues
  • 43:44 – James Clear’s example of how to build an audience correctly
  • 44:23 – Next on Daniel’s reading list
  • 46:12 – Where Daniel grew up
  • 47:33 – The World of Coke and why the “Coke vs. Pepsi” challenge was genius
  • 49:24 – Philosophy and why the greatest investors of all-time are basically philosophers
  • 54:01 – Finding your north star
  • 54:31 – Alabama or Auburn?

Contact Dr. Daniel crosby:

Episode Affiliate:

Quotes:

  • “My own career took off when I got more laser-focused and left behind the idea that I needed to be everything to everyone.” – Daniel 
  • “Each one of us is heavily laden with concerns and cognitive load – Anything we can do to take a shortcut is helpful.” – Daniel
  • “Nothing is harder for us to bear than uncertainty.” – Daniel
  • “We are not wired to maximize happiness. We’re wired to minimize regret.” – Daniel
  • “People tend to overvalue assets that they own and have positive experiences with.” – Daniel
  • “People don’t realize that inaction is a decision too.” – Daniel
  • “You have to look at your portfolio and say ‘Would I buy this again today?’ And if you wouldn’t buy it again today it’s time to consider selling.” – Daniel
  • “The way that you succeed as an investor is by controlling the controllables.” – Daniel
  • “Nothing is less safe than playing it safe and nothing guarantees loss like trying to avoid it.” – Daniel in his book

Links mentioned in this episode: