conservative investment position,

258-259 dollar-cost averaging, 250-252 emotional intelligence (EQ), 286-287 emotional response control, 58-60,

243-246, 284-285 financial reserve, maintaining a,

258-259 ignoring information, 252-254 key to, 230, 231, 283-286 loss aversion, 29-30, 249-250 low-risk investments, 270-271, 282 mast-strapping, 260-262 own a smaller house, 220-221 plan, sticking to a, 285-286 productivity and, 273-275, 276 real estate, 223-225 red zone, dont trade in, 262-264 self-control issues, 259-262 stocks, 189-192 tips, 246-248

trades, frequency of, 245-246, 248, 261-262 Profit growth, limits on, 177-180 Progenics Pharmaceuticals, 150, 274, 275 Psychohistory, 272 Purchasing power parity (PPP), 132

Queen Elizabeth Park (Uganda), 224-225 R

A Random Walk down Wall Street

(Malkiel), 40 Rational market(s), 35-36 Reagan, Ronald, 86 Reagan bonds, 143, 156 Real estate:

adjustable rate mortgages, 216-219,

221-223 buying behavior, 208-209 comparative advantage, 195-196 economic conditions and value of, 187-189

fixed-rate loans, 221-223 housing bubble, 203-210 housing prices, 194, 196-199, 204,

209-210, 223 inflation and, 200, 201 interest rates and, 211-213 investment characteristics of,

200-202 investment in, 193-196 leverage, 213-216, 223-224 local conditions and, 202-203 own a smaller house, 220-221, 271 P/E of houses or property, 199-202,

rental vacancy rate, 207-208

return on, 220-221, 223-225, 265-266

supply and demand, 205-207

taxes and, 200, 201

win-win outcome, 220-221 Real exchange rate, 121 Red zone, dont trade in, 262-264 Reminiscences of a Stock Operator, 247, 249

Rental rate(s), 200 Rental vacancy rate, 207-208 Repin, Dmitry, 60 Retirement, 90, 276 Revealed preference, 281 Ricardo, David, 194 RJR Nabisco, 16, 150-151 Roth, Al, 87-88, 90 Rothschild, Nathan Meyer, 253 Roulette wheel strategy, 238-239

S&P 500, 173, 200 Safety deposit box, 155 Samuelson, Paul, 194 Sanfey, Alan, 28 Saut, Jeffrey, 184 Saving money:

government debt and, 145

inflation effects on, 97

Saving money (Continued):

interest rates and, 158

personal savings rate, 71, 73-74 Savings bonds I-series, 112, 270 Schwarz, Anna, 87 Schwarzenegger, Arnold, 76, 177 Science of irrationality, 2, 3-5. See also

Individual irrationality Seashells, 94-95, 102 Securities Act of 1934, 216 Self-control issues, 33-34, 259-262 Self-examination, critical, 12-14 Sentiment as predictor of future returns, 45-49

Shakespeare in Love (movie), 190

Shiller, Robert, 42-13

Siegel, Jeremy, 40, 42-43, 160, 161-164,

182, 190-191 Silverman, Irwin, 241 Silver prices, 53-54 The Simpsons, 144 Simultaneous exchange, 89-90 Skinner, B.F., 30-32, 277-278, 283-284 Slot machines, 48 Smith, Adam, 38 Smith, Vernon, 5

bubbles and crashes, 44

individual irrationality, 33

supply and demand research, 38

ultimatum game, 26, 27 Social isolation, 283 Social security fund, 71-72, 146 Society of Mind (Minsky), 20 Socratic method, 12-13 Soros, George, 133 Spin control, 255 Split-brain studies, 22-23 Squirrel(s), 155 Stampede(s), 36-38 Stern, Howard, 28-29 Stewart, Potter, 264 Stimulus-response behavior, 30-32,

277-279, 283-284 Stock price(s):

corporate profits and, 180-183

currency prices and, 185-186 efficient market hypothesis, 40 emotional mood swings, 175-176 number of shares, 20 price to earnings ratio (P/E), 19, 199 random component of, 32-33 slowdown in, 183 trends in, 268

valuation, fairness of, 174-177 Stock(s), 187-189 analysis of, 171-174 as average investments, 185-186 buying on margin, 215-216 commodity price change protection,

109-110 Fed model, 171-174, 176-177 financial risk of, 279-282 inflation and, 185, 200, 201 as inflation or deflation protection,

112-113 investment characteristics of,

200-202 investment in, 1-3, 10, 159-164,

189-192, 279 love affair with, 189-191 luck and, 170-171 non-U.S. stocks, 134-135, 271 optimistic view of, 46, 49, 174, 175,

176-177, 183-185 performance in other countries,

165-166, 168-169, 170 pessimistic view of, 45-46, 49,

173-174, 176, 183-185 portfolio insurance, 217-218 reasons to own, 185-186 return on, 161-164, 170-171, 186-189,

265-266

sentiment as predictor of future returns, 45-49

survivorship bias, 164-169 tax deferment and, 186 trades, frequency of, 245-246, 248, 261-262

U.S. economy, compared to, 179-182 win-win outcome, 220

Stocks for the Long Run (Siegel), 40, 42, 160, 161-164, 182, 190-191

Stubbornness, 25-29

Subconscious, power of, 21-22

Summers, Larry, 100

Sun Microsystems, 42, 43, 180-181

Superstitious pigeons, 30-32

Supply and demand, 38, 205-207

Survivorship bias, 164-169 analysis of, 167-169 strong form of, 169-170 weak form of, 168-169, 170

Swingers (movie), 281

A Tale of Two Cities (Dickens), 65-66 Taleb, Nassim Nicholas, 170, 255 Taxes:

bonds and, 200, 201

investment choices and, 200, 201

real estate and, 200, 201

social security taxes, 71-72

stocks and, 186, 200, 201 Tecumseh, 51 Testosterone levels, 28-29 Thaler, Richard, 48-19, 51, 237, 255 This Is Spinal Tap, 156 Thurow, Lester, 68 Tip(s), 246-248

TIPS (Treasury Inflation Protected Securities), 111, 112, 270 Tobias, Andrew, 53-54, 55 Tobin, James, 144-145, 149 Tooby, John, 235-236 Top Gun (movie), 243-245 Toys R Us, 56, 58

Trades, frequency of, 245-246, 248,

261-262 Trahan, Francois, 184 Treasury bonds:

Fed model, 171-172 investment characteristics of,

200-202 investment in, 58, 69-70 monetary growth and, 108

price to earnings ratio (P/E), 200 return on, 142-143, 175, 211-212

Treasury Inflation Protected Securities (TIPS), 111, 112, 270

Tulipmania, 41-42, 52

Tversky, Amos, 5, 14-15, 253-254

Tyran, Jean-Robert, 100

The Ultimate Weight Solution (McGraw), 182

Ultimate Frisbee, 257-258

Ultimatum game, 25-29

Unemployment rates, 78

United Nations experiment, 253-254

An Unsolved Problem of Biology (Medewar), 12

U.S. current account deficit, 116-117, 119, 125-127

U.S. dollars. See dollar(s)

U.S. economy:

condition of, 68-69 government debt and, 146-148 growth of (see Economic growth)

U.S. Federal Reserve. See Federal Reserve

U.S. government. See government

entries U.S. overseas assets, 126 U.S savings bonds I-series, 112, 270 U.S. Treasury bonds. See Treasury

bonds

Vitamin D supplements, 5 Volcker, Paul, 108

Wages, 98-100, 188-189, 271 Wall Street (movie), 253 Wal-Mart problem, 18, 19 Waterloo, battle of, 253 Waterworld (movie), 130 Wealth of U.S. families, 72-73, 109-113