Saturday, August 30, 2014

'I knew it all along ... didn't I ?' -- Understanding Hindsight Bias

Psychology of the CallThe situation may be different each time, but we hear ourselves say it over and over again: "I knew it all along." The problem is that too often we actually didn't know it all along, we only feel as though we did. In a new article, psychological scientists explore existing research on "hindsight bias," identifying the factors that make us susceptible to the phenomenon and identifying some ways we might be able to combat it.
Source: Association for Psychological Science
The fourth-quarter comeback to win the game. The tumor that appeared on a second scan. The guy in accounting who was secretly embezzling company funds. The situation may be different each time, but we hear ourselves say it over and over again: "I knew it all along."

The problem is that too often we actually didn't know it all along, we only feel as though we did. The phenomenon, which researchers refer to as "hindsight bias," is one of the most widely studied decision traps and has been documented in various domains, including medical diagnoses, accounting and auditing decisions, athletic competition, and political strategy.

In a new article in the September 2012 issue of Perspectives on Psychological Science, a journal of the Association for Psychological Science, psychological scientists Neal Roese of the Kellogg School of Management at Northwestern University and Kathleen Vohs of the Carlson School of Management at the University of Minnesota review the existing research on hindsight bias, exploring the various factors that make us so susceptible to the phenomenon and identifying a few ways we might be able to combat it. This article is the first overview to draw insights together from across different disciplines.

Roese and Vohs propose that there are three levels of hindsight bias that stack on top of each other, from basic memory processes up to higher-level inference and belief.
  1. The first level of hindsight bias, memory distortion, involves misremembering an earlier opinion or judgment ("I said it would happen").
  2. The second level, inevitability, centers on our belief that the event was inevitable ("It had to happen").
  3. And the third level, foreseeability, involves the belief that we personally could have foreseen the event ("I knew it would happen").

The researchers argue that certain factors fuel our tendency toward hindsight bias. Research shows that we selectively recall information that confirms what we know to be true and we try to create a narrative that makes sense out of the information we have. When this narrative is easy to generate, we interpret that to mean that the outcome must have been foreseeable. Furthermore, research suggests that we have a need for closure that motivates us to see the world as orderly and predictable and to do whatever we can to promote a positive view of ourselves.

Ultimately, hindsight bias matters because it gets in the way of learning from our experiences.

"If you feel like you knew it all along, it means you won't stop to examine why something really happened," observes Roese. "It's often hard to convince seasoned decision makers that they might fall prey to hindsight bias."

Hindsight bias can also make us overconfident in how certain we are about our own judgments. Research has shown, for example, that overconfident entrepreneurs are more likely to take on risky, ill-informed ventures that fail to produce a significant return on investment.

While our inclination to believe that we "knew it all along" is often harmless, it can have important consequences for the legal system, especially in cases of negligence, product liability, and medical malpractice. Studies have shown, for example, that hindsight bias routinely afflicts judgments about a defendant's past conduct.
And technology may make matters worse.

"Paradoxically, the technology that provides us with simplified ways of understanding complex patterns -- from financial modeling of mortgage foreclosures to tracking the flow of communications among terrorist networks -- may actually increase hindsight bias," says Roese.

So what, if anything, can we do about it?

Roese and Vohs suggest that considering the opposite may be an effective way to get around our cognitive fault, at least in some cases. When we are encouraged to consider and explain how outcomes that didn't happen could have happened, we counteract our usual inclination to throw out information that doesn't fit with our narrative. As a result, we may be able to reach a more nuanced perspective of the causal chain of events.

The above story is based on materials provided by Association for Psychological Science.
Note: Materials may be edited for content and length.

Thursday, July 17, 2014

Paradox of Bullet-Proof Banks in the Eurozone is Anti Free-Market since many Individual Risk-Takers will be Denied Credit while Large Cos will be Favored and continue to get Larger

Capitalist Pig Bob: When will the Germans say 'enough is enough' and rebel against the ECB? 

================================================================
FRANKFURT—Banks in the euro zone will have little advance notice concerning the results of the European Central Bank's review of their balance sheets before the results are publicly communicated in late October, the ECB said on Thursday.

"Banks will be informed of the full and final results only shortly before they are communicated to the markets," the ECB said, although the ECB and national regulators will discuss partial findings with banks ahead of time.
The asset review, and separate stress test on how balance sheets of 128 banks in the euro zone respond to different economic scenarios, are central planks of the ECB's preparations to become the single supervisor of the region's banks in November.
ECB officials hope the reviews will provide more clarity on the state of European banks and address shortfalls where they occur. If the results are deemed credible by financial markets, then banks may be more willing to extend new credit to households and businesses.
"As we finalize this tough and rigorous exercise, we are doing our utmost to prepare for a smooth disclosure process," said Daniele Nouy, chair of the supervisory board, said in a statement.
Previous stress tests by European regulators failed to restore confidence in the banking sector. The ECB has added a new wrinkle to beef up its review: the results of the balance sheet review will be incorporated into stress tests.
"When assessing banks' own data and the outcomes of their internal models, the ECB-led teams will challenge them with calculations of their own," the ECB said.
"This is to ensure the credibility of the comprehensive assessment and will apply to both the (asset quality review) and the stress test," it said.
Once results of the tests are known, banks must submit their capital plans to the ECB bank supervisory body in November.
Write to Brian Blackstone at brian.blackstone@wsj.com and Todd Buell at todd.buell@wsj.com

Tuesday, July 15, 2014

Chipotle Mexican Grill (CMG) Q2, 2014, Earnings Coming..

Monday, July 21, After Market Close.

CMG has 31M shares outstanding and a market capitalization of $18.8B at its current price of $605.00/share





Chart forChipotle Mexican Grill, Inc. (CMG)


Two of us tried Chipotle once and we both dumped our plates in the garbage, we thought the food was horrible. Maybe since we were raised on high-end European cooking we are spoiled. 

CMG is proof that there are plenty of Americans who'll continue to spend money on fast food that's marketed to be organic. 


CMG has created some fat Capitalist Pigs as stock price has not disappointed. Congratulations must go out to Steve Ells as his Mexican themed organic concept has worked. 

SalaryOptions
M. Steven Ells , 49
Founder, Chairman and Co-Chief Exec. Officer
$4.85M$41.72M
Montgomery F. Moran , 47
Co-Chief Exec. Officer, Pres, Sec. and Director
$4.13M$1.70M
John R. Hartung , 57
Chief Fin. Officer and Principal Accounting Officer
$1.80M$9.42M
Mark Crumpacker , 51
Chief Marketing & Devel. Officer
$1.02M$5.82M


We're studying all potential trading angles ahead of CMG's report.

POTC-

IT'S TIME for Q3's Post Earnings Educational Alerts (PEETA)


Wednesday, June 11, 2014

POTC's Pork Reveals its World Cup Final: Brazil vs Portugal

Capitalist Pig Bob sees the political winds blowing favorably at this FIFA event for Brazil butt against Argentina. Though I agree with the brass at GS that Brazil will make it to the Final I smell Argentina being booted-out within the 1st 2-rounds, then
great debate over the 'bad' calls on the field by the referees.


As the main Political and now World Cup Correspondent for POTC here's my Final:
Brazil vs Portugal. Game could end in a tie and then exhaust OT play and go into penalty kicks.
  • If game ends in normal or OT play the winner will be Portugal 3 - 2.
  • If game goes to penalty kicks the winner will be Brazil.
This is different than GS's Final of Brazil 3 - 1 over Argentina, as I see Argentina being sent to an early political exit.


Here's some quick thoughts from Capitalist Piglet Alice (CPA), rooted more in piglet vanity yet potentially more powerful than GS's Final call nonetheless:


"I was a Commercial Art major before switching to Business, so I will defer to Capitalist Pig Bob's sports expertise in predicting the Winner, and instead will pick the Best Use of Color & Style in the kits (uniforms).  My choice is Spain ~ muy sexy!"





Spain

Tradition be damned. The defending champions celebrate that distinction by using gold stripes and a golden crest on their head-to-toe red home look. But the away has none of that. Spain will feature an all-black kit with neon green—known as “electricity”—accents throughout. There’s no tradition there.
(Description courtesy Sports Illustrated)

Kit trivia:  Out of the 32 teams, Nike sponsors 10, Adidas 9, Puma 8, and 5 lesser known companies sponsor the remaining 5.

Best of luck to all nations and let's see whether the pork at POTC or brass at GS is better at picking World Cup winners, Bring It On !




Friday, June 6, 2014

Goldman Sachs (GS) vs Psychology of the Call's (POTC) Pigs; Which Team will Prevail?

"Goldman rates host nation Brazil as the heavy favorite with a 48.5 percent chance. It says it will beat Argentina 3 to 1 in the final on July 13".

http://www.businessweek.com/articles/2014-06-05/goldman-sachs-economists-predict-the-world-cup?campaign_id=yhoo  
(see GS's entire piece below).

POTC's Capitalist Piglet Alice (CPA) and Capitalist Pig Bob (CPB) will offer a direct response to the brass as GS regarding their World Cup winner before the June 11th. games begin.

Thanks for your greedy  and Capitalistic Attention!
CPA and CPB



​As chief global equity strategist at Goldman Sachs (GS), Peter Oppenheimer typically meets with central bankers, government officials, and other financial luminaries. A May 8 sitdown was considerably more enjoyable: Oppenheimer interviewed four Brazilian soccer stars for a special Goldman report on the World Cup, a quadrennial publication eagerly anticipated by clients and bank employees alike as a break from the usual econometric fare.

“I explained to them that I wasn’t from a normal press outlet. I work for a bank, doing research, looking at the connectivity between markets and football,” Oppenheimer says of his chat with the athletes known as Ramires, Oscar, Willian, and David Luiz. A snapshot in the report shows David Luiz, the Brazilian vice captain, with his arm around the suited, beaming banker.

The 2014 report, the fifth Goldman has released, weighs in at a substantial 67 pages. Published on May 27, The World Cup and Economics 2014 is partly tongue-in-cheek, partly rigorous, and entirely entertaining to Goldman’s international clientele. There’s a “stochastic model” that predicts the final score of all 64 World Cup matches, based on a data set of all international play since 1960, as well as analyses of the athletic and economic strength of each country—mixing observations about Croatia’s hard currency debt liabilities and superstar Italian goalkeeper Gianluigi Buffon. 

Goldman rates host nation Brazil as the heavy favorite with a 48.5 percent chance. It says it will beat Argentina 3 to 1 in the final on July 13.
.
“It’s a lighthearted way to use some of our tools on something that’s quite different from predicting nonfarm payroll numbers and interpreting central bank moves,” says Jan Hatzius, Goldman’s chief economist, who organized the report with chief markets economist Dominic Wilson and others. “People take it very seriously,” Hatzius says. “We basically ask for volunteers, and the sign-ups are very rapid.” More than three dozen Goldman employees contributed. “Clients love it,” says Oppenheimer. “Also, it’s been a difficult year for lots of people in the financial markets. Industry performance has been tough, and it’s a nice sort of diversion, really.”
.
Most Goldman research publications are available only to paying clients. The World Cup report is posted as a free download online. “I can tell you that nothing, absolutely nothing that we write over four years gets as much attention and exposure as this publication,” says Alberto Ramos, the bank’s head of Latin American economic research, who wrote profiles of Mexico and Brazil.

“I started receiving e-mails from clients about three months ago—‘When are you guys doing this? I want to receive a copy,’ ” Ramos says. The first report came out in 1998 under the direction of Jim O’Neill, famous for being a soccer obsessive and for coining the acronym BRIC, for the emerging-market economies of Brazil, Russia, India, and China. He retired as chairman of Goldman Sachs Asset Management in 2013.
.
The treatise is especially popular abroad, Hatzius says. “In Latin America, of course, it’s huge,” he says. “The main Brazilian evening news had a two-minute segment, which is a little scary, frankly, because now we feel like we’re on the hook if Brazil ends up not winning this thing. I worry about my next trip down there.” Some concern is warranted—Goldman has so far gone 0 for 4 predicting the champion.

=================================================================

CPA and CPB to the GS brass: Cheers, and bring on the matches!

Tuesday, June 3, 2014

Introducing our new Team Member: Capitalist Piglet Alice..

With humble hearts as we continue to improve our aggressive stock options trading services, POTC proudly introduces our newest team member: Certified Public Accountant (CPA) Capitalist Piglet Alice

Her Communications via email and phone as a normal Partner have been imposing since 2011. Working as a CPA for several decades this Piglet understands the intricacies often buried in Financial Statements; her resume boasts work for Oil and Manufacturing cos and eventually a privately run Tax and Accounting practice. 
$~~~$~~~$~~~$~~~$~~~$~~~$~~~$~~~$~~~$~~~$

Greetings to every POTC Partner from Capitalist Piglet Alice,

I became interested in trading stock options about the same time I became a CPA.  I mainly relied on broker recommendations (ugh), and the high commissions made it hard to profit.  Without much success I quit trading altogether for a few years.  

Then after on-line trading became prevalent with much lower fees and commissions around 2003, I began to make my own decisions and trades.  I was able to interpret the Accounting very well so I thought I wasn't making some giant leap, yet..  

I would describe my on-line trading strategy as rooted in fundamental analysis and more often than I care to admit many "seat of my pants" calls where some worked but most did not.  Another disadvantage is that I only followed and traded the same 4 or 5 cos over and over.  Many of my successful trades were more a result of luck when I compare to what I know today.  

About 3-years ago I signed-up to POTC and slowly began to change my trading ways.  I am a witness that POTC doesn't just mention the 'Educational Journey' Partners are about to take in their Welcome Letter, they truly walk the walk and I am proud to be their go-to CPA. 

As a result of following POTC's write-ups, analyses, etc., my Accounting expertise was reinvigorated as I found myself applying multi-pronged research strategies: listening to Corp conference calls, studying charts, volume, after-market price activity, analysts opinions, and then after seeing the actual numbers my conviction in entering a trade has grown exponentially. 

After I profit today, there are usually many variables that I understand over just intuition or even my professional Accounting background which is the reason POTC hired me.  Sometimes financial statements can often conceal more than they reveal.  

POTC wants to ensure they understand some of the more difficult Accounting lines, but especially the footnotes, as the market is going higher as a result of what I call belt-tightening/cost cutting that is dominant in many sectors over growth in revenues; or as my team always refers to as growth in Sales.  

Of course POTC's Partners are not required to get as involved as I did since many don't have time and choose to trade alongside POTC if the write-up/psychology makes sense, or not trade and just watch and take notes. 

As a CPA I am required to complete a certain number of hours of Continuing Professional Education (CPE) each year.  So I enjoyed verifying POTC's fundamental analysis while learning several new research areas I never took advantage of. 

I know from personal experience that if a Partner has a little extra time, he or she will reap long-term benefits by studying the often interesting final Directional thesis of the PEETA. The educational opportunities that come with being a POTC Partner are somewhat similar to my 'Continuing Professional Education' as a CPA; just one reason why I am excited to be an official member of the POTC team. 

Any Partner who has been involved for a while for at least 1-year knows that POTC is continually Evolving.  About 6 Quarters ago when they developed the Post Earnings Educational Trade Alert (PEETA) trading strategy is when I gained confidence and starting reaping the educational benefits and booking profits more consistently than ever.  The PEETA has been very effective and I congratulate my team for pegging Direction correctly so often. 

I recall a few Quarters ago after YHOO reported and almost every person on CNBC's Fast Money was bullish for the following day. So when POTC sent a bearish Red-Eye thesis I was surprised, yet they called Direction correctly even as the easiest route was to follow the so-called experts. 

The experts turned out to be wrong,  another example why I think POTC's multi-faceted write-ups are different and impressive. Obviously no trader or service will get every trade right, so I like the fact that when there's a mistake made, POTC more often than not will log a Lesson Learned and they promise to never commit the same mistake twice. 

Also, no new Partner may sign-up unless they are referred by a current Partner.  This forces the service to improve from Quarter to Quarter or no referrals will result. A referral focused model keeps the number of traders at a manageable level to maximize personal attention. I have never come across a service where you ask a question and you receive a long and thorough response. 

I encourage all Partners to answer the challenge when we ask for your insights about next-day Direction or for comments and suggestions. Two of my favorite POTC wisdoms: 
  • "Some of our best ideas come from our Partners." 
  • "If you learn and make moneywe learn and make money."
And one of POTC's favorite Chinese Proverbs:
  • "Tell me and I'll forget, Show me and I may remember, but Involve me and I will Understand."

XOXO,
Capitalist Piglet Alice, POTC's CPA Correspondent.

Wednesday, May 28, 2014

Post Earnings Educational Trade Alert (PEETA) Strategy, Pig Bob~

"Sadly, most stock options traders will never experience the esoteric nature of our PEETA." 


 ........ ........  ...Capitalist Pig Bob,....         
........."am Fat Money."

http://psychologyofthecall.blogspot.com 
Emails to: Psychologyofthecall@gmail.com



Monday, May 26, 2014

The U.S. Soldier puts 'Life' in Perspective on Memorial Day

If not for the men and women who served the United States and Allied forces during Wartime, we would not have the privilege to trade stock options or use shallow social mediums like Facebook and Twitter.

We may have to Rise-Up again to ensure no soldier died in vain. The free-market system must thrive again as there is no better proven Economic model ever. 


May God bless every man, woman, and the family members of every U.S. and Allied soldier who served, were wounded, but especially those who Died fighting for Liberty and Freedom

Highest RegardsHurrah!
POTC-

Sunday, May 18, 2014

Foundation Medicine and Collaborators to Present New Clinical Data on FoundationOne® and FoundationOne Heme at the 2014 ASCO Annual Meeting








Date & Time: Saturday, May 31, 2014 from 8:00 a.m. to 11:45 a.m. CT
Title: Comprehensive genomic profiling of gallbladder adenocarcinoma and frequent genomic-derived targets of therapy 
Presenter: Juliann Chmielecki, Ph.D. 

Date & Time: Saturday, May 31, 2014 from 1:15 p.m. to 5:00 p.m. CT
Title: BATTLE-2: KRAS mutation and outcome in a biomarker-integrated study in previously treated patients (pts) with advanced non-small cell lung cancer (NSCLC) 
Presenter: Vassiliki Papadimitrakopoulou, M.D.
Collaborator: The University of Texas MD Anderson Cancer Center 

Date & Time: Saturday, May 31, 2014 from 1:15 pm. to 5:00 p.m. CT
Title: Identifying ALK rearrangements that are not detected by FISH with targeted next-generation sequencing of lung carcinoma
Presenter: Siraj M. Ali, M.D., Ph.D. 

Date & Time: Saturday, May 31, 2014 from 1:15 p.m. to 5:00 p.m. CT
Title: Effect of clinical NGS-based cancer genomic profiling on physician treatment decisions in advanced solid tumors 
Presenter: Fadi S. Braiteh, M.D.
Collaborator: Comprehensive Cancer Centers of Nevada 

Date & Time: Saturday, May 31, 2014 from 1:15 p.m. to 5:00 p.m. CT
Title: Targeted next-generation sequencing (NGS) of carcinoma of unknown primary site (CUP): Actionable genomic alterations 
(GA) and new routes to targeted therapies
Presenter: Jeffrey S. Ross, M.D. 

Date & Time: Sunday, June 1, 2014 from 8:00 a.m. to 11:45 a.m. CT
Title: PI3K/AKT/mTOR genomic alterations in 94 patients with metastatic breast cancer in the Phase I clinic at MD Anderson: 
Prevalence and association with response
Presenter: Jennifer J. Wheler, M.D.
Collaborator: The University of Texas MD Anderson Cancer Center 

Date & Time: Monday, June 2, 2014 from 8:00 a.m. to 11:45 a.m. CT
Title: Clinical application of comprehensive next-generation sequencing-based genomic profiling for identification of actionable 
genomic alterations in pediatric solid tumors and hematolymphoid malignancies: The Foundation Medicine pediatric experience
Presenter: Matthew J. Hawryluk, Ph.D. 

Date & Time: Monday, June 2, 2014 from 8:00 a.m. to 11:00 a.m. CT
Title: Next-generation sequencing (NGS)-based profiling of pancreatic acinar cell carcinoma for identification of a recurrent 
SND1-BRAF fusion 
Presenter: Juliann Chmielecki, Ph.D. 

Date & Time: Monday, June 2, 2014 from 8:00 a.m. to 11:45 a.m. CT
Title: Evidence of PIK3CA and TP53 co-mutation in breast cancer identification on next-generation sequencing (NGS) of ERBB2 
(HER2)-amplified residual disease following preoperative anti-HER2 therapy 
Presenter: Frankie Ann Holmes, M.D.
Collaborator: Texas Oncology 

Date & Time: Monday, June 2, 2014 from 8:00 a.m. to 11:45 a.m. CT
Title: Estrogen receptor-positive (ER+) metastatic breast cancer (MBC) patients (pts) with extreme responses (ERs) to 
capecitabine having tumors with genomic alterations in DNA repair and chromatin remodeling genes
Presenter: Joyce O'Shaughnessy, M.D.
Collaborator: Texas Oncology-Baylor Charles A. Sammons Cancer Center 

Date & TimeMonday, June 2, 2014 from 8:00 a.m. to 11:00 a.m. CT
Title: Analysis of candidate homologous repair deficiency genes in a clinical trial of olaparib in patients with platinum-sensitive, relapsed serous ovarian cancer (PSR SOC).
Presenter: Jonathan Ledermann,
Collaborator: AstraZeneca 

Date & TimeMonday, June 2, 2014 from 1:15 p.m. to 4:15 p.m. CT
Title: Next-generation sequencing (NGS) in relapsed/refractory triple-negative breast cancer (TNBC) in Israel 
Session: Poster Highlights Session
Presenter: Noa Ben-Baruch, M.D. 
Collaborator: Teva Pharmaceuticals 

Date & TimeMonday, June 2, 2014 from 1:15 p.m. to 5:00 p.m. CT
Title: Next-generation sequencing to identify molecular alterations in DNA repair and chromatin maintenance genes associated with pathologic complete response (pT0) to neoadjuvant accelerated methotrexate, vinblastine, doxorubicin, and cisplatin 
(AMVAC) in muscle-invasive bladder cancer (MIBC) 
Presenter: Elizabeth R. Plimack, M.D., M.S.
Collaborator: Fox Chase Cancer Center 

Date & Time: Monday, June 2, 2014 from 2:03 p.m. to 2:15 p.m. CT
Title: Whole-exome and targeted sequencing of angiosarcomas: Target identification and treatment implications 
Session: Clinical Science Symposium
Presenter: Vinod Ravi, M.D.
Collaborator: The University of Texas MD Anderson Cancer Center 

Date & Time: Monday, June 2, 2014 from 5:24 p.m. to 5:36 p.m. CT
Title: Comprehensive genomic profiling of solid tumors from 677 adolescents and young adults for revealing a distinct spectrum of targetable genomic alterations
Session: Oral Abstract Session
Presenter: Brandon Hayes-Lattin, M.D. 

Date & Time: Tuesday, June 3, 2014 from 8:00 a.m. to 11:00 a.m. CT
Title: Rictor amplification to define a novel and unique subset of lung cancer patients
Presenter: Haiying Cheng, M.D., Ph.D.
Collaborator: Columbia University Medical Center 

Date & Time: Tuesday, June 3, 2014 from 8:00 a.m. to 11:00 a.m. CT
Title: Next-generation sequencing (NGS) to identify actionable genomic alterations (GA) in "pan-negative" lung adenocarcinomas (ADC) from patients with no smoking or a light smoking (NS/LS) history
Presenter: Alexander E. Drilon, M.D.
Collaborator: Memorial Sloan-Kettering Cancer Center 

We organized this piece to be more helpful than the one on the official ASCO website,
POTC-
http://psychologyofthecall.blogspot.com

Monday, May 5, 2014

China's Shanghai Rallies despite a Contraction in Manufacturing

The Purchasers Managers Index (PMI) in China for April fell to 48.1 from 48.3. The survey showed factory activity in the world's 2nd largest economy contracting for a 4th consecutive month, yet the Shanghai shrugged it off.


Monday's late rally was impressive from both a Price and Volume standpoint



Chart forSSE Composite Index (000001.SS)




Shanghai composite since the 1990's reveals the Key 2,000 level of Support


Chart forSSE Composite Index (000001.SS)
Most U.S. money managers are keeping an eye on China. If the Shanghai adds 1% or more on Tuesday than Monday's late rally could signal that the Govt is prepared to act with measures that would quell fears and spark a longer-term move higher in stocks.

Maybe the Year of the Horse will prove to have more bucking power than many bears now estimate.




Thank You,
POTC-
http://psychologyofthecall.blogspot.com

Sunday, April 27, 2014

IPO Lockup Expiries to Monitor for Monday, Tues., and Wednesday

   Expiration   Co Name                   .....Symbol         ....Price     Shares   Total $ Amt                                





4/30/2014  Qunar 
...............................QUNR ..............$15.0011.1M ..$167M