18 Homer, The Odyssey, book XII.
19 U.S. Supreme Court, Jacobellis v. Ohio, 378 U.S. 184 (1964).
Chapter 11 Timely Advice 1Gross, B., “Dow 5,000,” PIMCO Investment Outlook (September 2002).
2 Prechter, R., Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression (Hoboken, NJ: John Wiley & Sons, 2002), 79.
3 Diners Club, www.dinersclub.com.
4 Investment Company Institute, www.ici.org, 2004 Fact Book, Table 13, 122.
5 Barthelme, F., and S. Barthelme, Double Down: Reflections on Gambling and Loss (New York: Houghton Mifflin, 1999).
6 Eisenberger, N., M. Lieberman, et al., “Does Rejection Hurt? An fMRI Study of Social Exclusion,” Science 302 (2003): 290-292.
7 Flaherty, J., “‘Buy and Forget’ Pays Off Big,” New York Times, December 3, 2000.
8 Schweb, F., Where Are the Customers’ Yachts? or, A Good Hard Look at Wall Street (New York: Simon & Schuster, 1940), 26.
9 Goleman, D., Emotional Intelligence: Why It Can Matter More Than IQ (New York: Bantam Books, 1995).
Index
A
Adjustable rate mortgages
Advances in Behavioral Finance
The Adventure of the Silver Blaze
Aggregate financial position
Allen, Woody
Altria
American Dream (documentary)
Ancestral traits
Anchoring effect
Anna Karenina
Annie Hall (movie)
Anthropic principle
Apology of Socrates (Plato)
Argentina loan default
Arkhipov, Vasily
Asch, Solomon
As Good As It Gets (movie)
Asimov, Isaac
AT&T Wireless
Austin Powers (movie)
Australian saving system
Averaging losers
B
“The Baby Boom, the Baby Bust, and the Housing Market” (Mankiw and Weil)
Baby boom retirement
Bachelier, Louis
Back to the Future (movie)
Bacteria
Baker, George
Barbarians at the Gate
Barber, Brad
Barings Bank
Barter economy
Battle of Little Big Horn
Behavioral economics
Behavioral finance
Bernanke, Ben
Bernstein, Richard
Berra, Yogi
The Black Swan (Taleb)
Blazing Saddles (movie)
Blood viscosity
Bonds. See also Treasury bonds
bull market in
default on
fixed-rate debt
government bonds
inflation and
inflation-protected bonds
interest rates and
investment characteristics of
investment in
losing money with
maturity terms
monetary growth and
non-U.S. bonds
opportunity cost
profitable investing in
Reagan bonds
return on
short-term bonds
taxes and
value of
Borish, Peter
Borrowing money. See also Loans
Cheapskate
current account deficits
inflation effects on
interest rates and
Boys will be boys study
Brain:
activity during ultimatum game
corpus callosum
lizard brain (see Lizard brain(s))
McGurk effect
parts of
prefrontal cortex
split-brain studies
subconscious, power of
Braniff Airlines
Brecheen, Robert
Bretton Woods agreement
A Brief History of Time (Hawking)
British pound, value of
Bubbles and crashes
Great Depression
housing bubble
1987 stock market crash
Buffett, Warren
Bush, George W.
Business investment, idle production capacity and
C
Calculations, problem completing
Canadian economy
Carnegie, Dale
Carter, Jimmy
Cheapskate
Chicago Bulls
Chimpanzees
Chinese baby problem
Chinese economy
Chinese treatment of Korean War P.O.W.s
Chomsky, Noam
Churchill, Winston
Cisco
Cohen, Abby Joseph
Coin flips
The Color of Money (movie)
The Coming Crash in the Housing Market
Communist markets
Comparative advantage
Completion bond company
Compound interest
Conformity needs
Conjunction fallacy
Conquer the Crash (Prechter)
Consumer Price Index
Consumer spending
Corporate profits:
growth of
stock prices and
Corpus callosum
Cosmides, Leda
Cosmology
Crack addiction
Crashes. See Bubbles and crashes
Credit card debt
Cripps, Richard
Critical self-examination
Cuban Missile Crisis
Currency prices. See also Dollar(s)
devaluation
inflation and
investment return and
loan default and
nominal exchange rate
real exchange rate
setting of
stocks and
Current account:
of Canada
deficit in
defined
imbalances
of Mexico
surplus
D
Darwin, Charles
Davis, Gray
“Death of Equities” (BusinessWeek)
Death or Glory (DoG)
DeBondt, Werner
Debt:
government (see Government debt)
personal
Decision-making skills
Deficit spending
Deflation
Detroit Pistons
Devaluation of money
DeVore, Irven
Dickson, Chip
Dirksen, Everett
Dollar-cost averaging
Dollar(s). See also Money
creation of
decline of
value against Chinese currency
value against euro
value against Japanese yen
value linked to gold
value of
Dopamine
Double Down (Barthelme and Barthelme)
Dow Jones Industrial Average:
before 1987 crash
decline of
Great Depression
1987 stock market crash
over time
Dow Jones Newswire
Drug addiction
Dutch tulipmania
E
Eals, Marion
East German stock investments
“The Economic Possibilities of Our Grandchildren” (Keynes)
Economic growth:
compared to stock revenues
consumer spending
deficit spending
exported goods
Federal Reserve monetary policy
government spending
key to
longer-term trends
productivity of U.S. companies
savings rate, personal
Economic wealth
Efficient market hypothesis
contradictions to
dogma of
luck of invest
ors’ performance
stock prices
winner and loser study
Eisenhower, Dwight
Elasticity, concept of
EMC
Emotional intelligence (EQ)
Emotion and investing:
emotional mood swings
emotional response control
self-control issues
sentiment as predictor of future returns
Employment rates
Envy
Equity-risk premium
eToys
Euro
Exchange rates. See currency prices
Exported goods
F
Fallows, James
Favale, Vinnie
Federal Reserve
Fed model
Fehr, Ernst
Fei
Ferrigno, Lou
Fiat money
Financial mast-strapping
Financial news and information
Financial plans
Financial risk. See also Low-risk investments
amount of risk, choosing
productivity as cure
risk-reduction
stocks and
First Contact (movie)
Fisher, Irving
Fixed-rate loans
Foley, Jan
Fooled by Randomness (Taleb)
Foraging societies
Ford, Gerald
Foreign investments
Foundation series
Four new horsemen of the NASDAQ
Freud, Anna
Freud, Sigmund
Friedman, Milton
Fuller, Russell
Full Metal Jacket (movie)
G
Gage, Phineas
Galbraith, John Kenneth
Galbraith, Steve
German economy:
growth of
inflation
German unemployment rate
Gigerenzer, Gerd
Glengarry Glen Ross (movie)
The Godfather: Part II
“Goes to eleven”
Gold
dollar value linked to
investment in
prices
return on investment
Goldilocks view of inflation
Goleman, Dan
Gore, Al
Government bonds. See Bonds
Government debt
interest rates and
problems with
productivity and
projection of
saving money and
social security fund and
trends in
U.S. economy and
U.S. overseas assets
Government spending
The Graduate (movie)
The Great Crash (Galbraith)
Great Depression
Greenspan, Alan
Gross, Bill
Gross domestic product (GDP)
Guth, Werner
H
Hare, Brian
Hawking, Stephen
Helman, Bill
Heuristics and Biases (Kahneman, Gilovich, and Griffin)
HIV problem
Home equity
Hoop Dreams (documentary)
Hormel Foods
Housing loans
“Housing Price Bubbles” (Krainer)
How to Profit from the Coming Real Estate Bust
I
Iliad
Income growth
Incredible Shrinking Man
Individual irrationality
ancestral traits
conformity needs
critical self-examination
emotional response control
environment and
loss aversion
mathematical calculations
overconfidence
understanding of
Industrial Revolution
Inflation:
in the 1970s
bonds and
causes of
currency prices and
deferred payment and
defined
deflation
effects of
in Germany
Goldilocks view of
hyperinflation
ideal rate of
interest rates and
investment choices and
money illusion
money supply and
multiplication factor system
predictions of
protection against
rates in U.S.
real estate and
rising
seashell example of
signs of building
stocks and
wages and
Influence (Cialdini)
Information technology revolution
Initial public offering (IPO)
Instinctual investors
Insurance companies, stock prices of
Interest, compound
Interest rates:
bonds and
borrowing money and
condition of
deficit spending
government debt and
inflation-adjusted
inflation and
protecting investments from increases in
real estate and
saving money and
sideways pattern of
trends in
In Triumph of the Optimists (Dimson, Marsh, and Staunton)
Investment choices. See also Profitable investing
Mean Markets and Lizard Brains Page 33