Artificial intelligence is a double-edged sword in the world of finance. It offers an incredible toolkit to diagnose and correct our most ingrained behavioral flaws, potentially making investors more successful. Yet it also introduces novel risks by becoming an actor in the market itself, complete with its own systematic machine biases and the frightening prospect of algorithmic herding. The line between human and machine decision-making in finance is blurring, creating a new market ecosystem defined by their interaction. The new market mind is here, and whether it leads to a more rational market or new forms of systemic fragility will depend entirely on the behavioral wisdom we embed in its code.
Cognitive Biases
When an AI Outperforms 93% of Fund Managers!
For decades, financial theory has rested on a central axiom: public information is free, symmetric, and quickly incorporated into prices. Under this premise, investors shouldn’t be able to generate sustained returns using data available to everyone. However, a recent study by Ed deHaan, Chanseok Lee, Miao Liu, and Suzie Noh (Stanford and Boston College, 2025) challenges this idea with a compelling experiment: an AI that, relying solely on public data, systematically improves the portfolios of thousands of real-world funds.
Why Even the Smartest People Make Predictable Mistakes…
Why do even the smartest people make predictable mistakes? Because the trap isn’t in the data — it’s in how we interpret it. Representativeness, availability, anchoring, overconfidence, illusion of control... These aren't flukes. They're systemic biases. Kahneman and Tversky called them out decades ago. Yet we keep falling for them — in investing, in business, in healthcare, in public policy.
15 ideas about Risk (From against the gods)
"Against the Gods: The Remarkable Story of Risk" is a fascinating book about how humanity has learned to measure and manage risk, enabling advancements in knowledge, the economy, and society by transforming uncertainty into a calculated opportunity.
Contrarians by Choice, Herds by Design
"Be a contrarian." It is the whispered mantra in trading rooms, financial forums, and among many investors who take pride in it. It sounds sophisticated, daring, and hints at the secret to outperforming the market. It evokes images of lone wolves bravely defying conventional wisdom to uncover hidden gems and achieve extraordinary returns. But is this contrarian ideal a true reflection of market reality? Or is it, instead, a more complex and paradoxical dance between individual conviction and collective influence? Every investment decision is simultaneously a contrarian act and an adherence to the herd. Let’s explore this seemingly contradictory truth.
Speculation versus Investment: An Increasingly Blurred Frontier
Is the distinction between speculation and investment truly valid, or is it merely a theoretical construct that has been consolidated throughout the history of financial markets? This article examines how, in today’s environment, marked by technological transformations, structural market changes, and a growing understanding of investor psychology, these categories have progressively blurred.
Quick (and short) Reminder: The Temptation (and Trap) of Forecasting
...broken clocks—WE MIGHT GET THE TIME RIGHT TWICE A DAY...
EL PODER DEL FRACASO – ENSEÑANZAS CLAVE DEL LIBRO BLACK BOX THINKING
Black Box Thinking nos enseña que el fracaso no es el enemigo, sino un poderoso aliado para el aprendizaje y la mejora continua. Lo verdaderamente revolucionario no es evitar el fracaso, sino desarrollar la capacidad de extraer conocimiento de cada obstáculo.
Restar, a veces Suma! Las Reformas de las Empresas Públicas, ¿Cuestión también de Jardinería?
Al igual que Florence Nightingale, que logró reducir la mortalidad mediante la eliminación de barreras y no solo sumando recursos, las empresas públicas deben ser reformadas con un enfoque orientado a la eliminación de los obstáculos. Es esencial no quedarse solo en la mejora de lo que ya existe, sino en identificar lo que impide el verdadero cambio y actuar en consecuencia.
Can AI Be More Reasonable Than Humans and Human-AI Teams?
“AI tends to outperform not only humans, but human-AI teams. One study, a 2019 preprint meta-analysis conducted by researchers at the University of Washington and Microsoft Research, looked at a number of previous studies in which decisions made by AI systems alone were assessed against “AI-assisted” decisions made by humans. In every case, they found … Sigue leyendo Can AI Be More Reasonable Than Humans and Human-AI Teams?
Irrational Investors 