Your major and investing/finance?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Your major and investing/finance?

Post by acegolfer » Sat Aug 18, 2018 11:35 am

I have a finance major so BH investing/philosophy is natural to me. I wonder whether this is true for non-finance majors. Specifically, is there a theory in your major that is closely related to BH investing?

(Your answers will be appreciated, as I teach finance to non-finance major students. If I can use the theory from their majors to explain a concept, it will be easier to convince.)

User avatar
Atomic
Posts: 36
Joined: Sat Mar 13, 2010 12:14 am
Location: Minnesota

Re: Your major and investing/finance?

Post by Atomic » Sat Aug 18, 2018 11:38 am

Engineering. Being involved in purchase and ownership decisions from the start of my career has helped my personal finance acumen.

Traveler
Posts: 631
Joined: Fri Aug 30, 2013 9:07 pm

Re: Your major and investing/finance?

Post by Traveler » Sat Aug 18, 2018 11:45 am

Undergrad in Int'l Business and Marketing and an MBA

I'm not sure there is a correlation between college major and financial lifestyle. I see MBAs at work who are in debt up to their eyeballs. I've also tried to explain to someone with a masters in education that learning a few investment techniques requires little financial knowledge but she claimed "it's too complicated and I don't want to have to deal with it." So I left her to wallow in her financial mess while pretty much being lazy when it comes to planning for retirement (she is comfortable relying on a state/county pension as long as she doesn't have to learn anything about finance).

To each his/her own.

HEDGEFUNDIE
Posts: 607
Joined: Sun Oct 22, 2017 2:06 pm

Re: Your major and investing/finance?

Post by HEDGEFUNDIE » Sat Aug 18, 2018 11:47 am

Philosophy.

My favorite theory is that we build our beliefs about the world in a meshed web, like words on a Scabble board. And just like Scrabble, we may not realize one of our words is misspelled (I.e. our belief is incorrect) until someone challenges us on it. And when that happens, even if we acknowledge that our belief has been proven false, it’s still incredibly difficult to change that belief, as many of our other (perfectly true) beliefs rely in some way upon that false belief, in the same way that every word on a Scrabble board is linked together.

Not sure what that has to do with with investing, I just think it’s cool :P

User avatar
arcticpineapplecorp.
Posts: 3125
Joined: Tue Mar 06, 2012 9:22 pm

Re: Your major and investing/finance?

Post by arcticpineapplecorp. » Sat Aug 18, 2018 12:01 pm

psychology (M.S.). Human behavior, emotions, decision making/problem solving is somewhat related. I didn't become interested in finance/investing until a few years after I got my degree however. I found my way to investing in the 90s through the Motley Fools (which I don't follow anymore, nor think anyone should because they're about stock picking). But the Fools main recommendations back then (besides individual stocks and their Foolish Four, which they later abandoned when it was found to be less generous once others knew about it) was the S&P500 index fund. And they and others (Suze Orman, Jane Bryant Quinn, etc) kept mentioning the Vanguard S&P500 over and over. So that was the first fund I ever bought. In the early 2000s I heard Jack Bogle on cnbc (just watched back then for amusement, not for any tips) say the Total Stock Market Index fund is more representative of the market than the S&P500 index fund. I researched it and switched from S&P500 to Total stock market index fund on his recommendation. Thanks Jack!

Then started getting interested in behavioral economics through Dan Ariely mainly. Found my way to "Nudge" (Sunstein and Thaler) and started getting interested in economics and libertarianism. That led me to "Econtalk "(Russ Roberts' podcast), Harry Browne, Adam Smith, etc. I started listening to podcasts at that time. I found Paul Merriman (he had a podcast with Tom Cock and Don MacDonald). I started reading about Merriman's take on Value tilting, small cap, international, etc.

Somewhere around the same time I saw an article about the bogleheads in a magazine while I was waiting for my car's transmission fluid to be replaced (recommended time per manufacturer). I searched online and was reading as many posts as I could voraciously trying to absorb the information (much of it which was over my head, math/theory wise). But I hung in there and started reading the threads on value tilting. Started reading William Bernstein and was contemplating for a year or more whether I wanted to tilt my portfolio (smallish at the time) to value/small and whether (and how much) to invest internationally.

After very long and thoughtful deliberation I decided to invest internationally (20% at first, then up to 30% currently, no plans to change) but decided against tilting to small cap and value (or small cap value). I'm a three fund kinda guy. It's good to know yourself. I will never second guess myself even if tilting will have been the better strategy. There are 150 portfolios that could be better than mine (https://www.whitecoatinvestor.com/150-p ... han-yours/). I'll never know which one in advance, though. So I don't let the perfect be the enemy of the good enough.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

JoeRetire
Posts: 1485
Joined: Tue Jan 16, 2018 2:44 pm

Re: Your major and investing/finance?

Post by JoeRetire » Sat Aug 18, 2018 12:25 pm

acegolfer wrote:
Sat Aug 18, 2018 11:35 am
Specifically, is there a theory in your major that is closely related to BH investing?
No.

No theory from a college major is necessary to be good at personal finances.

delamer
Posts: 5780
Joined: Tue Feb 08, 2011 6:13 pm

Re: Your major and investing/finance?

Post by delamer » Sat Aug 18, 2018 12:28 pm

Economics.

I don’t know about correlations to specfic majors, but a big chunk of the mistakes that I see on the forum are due to innumeracy.

If you don’t have a basic understanding if math and statistics, it leads to bad financial decisions.

Which is not be say that everyone who understands numbers makes good decisions. We have a friend who is a CPA and his personal finances are a mess.

User avatar
Svensk Anga
Posts: 436
Joined: Sun Dec 23, 2012 5:16 pm

Re: Your major and investing/finance?

Post by Svensk Anga » Sat Aug 18, 2018 12:46 pm

Engineering, chemical.

What one gets in school is not enough, but one has to learn how to teach ones self new topics if one is to have much success on the job. This carries over into personal life too. I am a DIY'er when it seems reasonable/cost-effective. How many folks have we seen who just refuse to learn enough to manage their finances and so delegate it all to someone else, often at very high cost?

Another attitude that comes from engineering is a desire to optimize efficiency. Minimizing dollar leaks from the budget and portfolio is a cousin to minimizing waste from the processes my (former) employer uses.

SelfEmployed123
Posts: 163
Joined: Sun Apr 15, 2018 8:57 pm

Re: Your major and investing/finance?

Post by SelfEmployed123 » Sat Aug 18, 2018 12:55 pm

I'm a clinical psychologist. During my training I was interested in cognition and the role of rational versus intuitive decision making (see Kahneman and Tversky). Their work on cognitive bias and heuristics has been very influential. Kahneman eventually won the Nobel Prize for this work, the only psychologist to ever do so. I see the Bogleheads' investing philosophy as a way to protect me from my own cognitive biases, which if left unchecked would surely lead to bad investment decisions.

See this article for more: https://www.investopedia.com/advisor-ne ... decisions/

oysterboy
Posts: 17
Joined: Sun Jun 06, 2010 5:37 pm

Re: Your major and investing/finance?

Post by oysterboy » Sat Aug 18, 2018 1:06 pm

I was a history major and then went through law school. The things from those 2 educational experiences that did have an effect on my financial and investing philosophies were:
1. The significant effects of random external events and forces.
2. The need to clearly identify an issue and shed the emotional distortions that frequently attach to issues.

I began investing while in high school in the early '60s. One of my investments, presumably an absolutely sure bet, was in a fund run by Gerald Tsai, at that time one of the heralded investment gurus of Wall St. Turned out he was a flash in the pan and my investment faired poorly. Then, I began following Chase Econometrics, a computer model designed by, or for, Chase Manhattan Bank, which was the fail-proof forecaster of the economy. Its forecasts proved to be terrible. This left me thinking that if these financially intellectual titans couldn't forecast performance, how could I ever do so.

My epiphany was reading A Random Walk Down Wall Street when it first came out. I found it totally persuasive, and still do. I became CEO of a NYSE chemical and mining company, and strongly influenced our pension committee to use Vanguard in both our defined benefit plan and as the majority of choices in our 401(k). Years later, I was given disproportionate credit for the excellent performance of our plans relative to the industry norm and was referred to as being very wise. In fact, the only wisdom I had was in knowing what I didn't know, that being what the future of particular companies would be.

Tdubs
Posts: 153
Joined: Tue Apr 24, 2018 7:50 pm

Re: Your major and investing/finance?

Post by Tdubs » Sat Aug 18, 2018 1:13 pm

Undergrad in engineering: A simple design is usually better and safer than a complicated one.

Ph.D. in History: Historians are skeptical of theories. So, we don't believe that history repeats itself, and we don't think people who learn from history will do much more than learn the wrong lessons and screw up anyway. So I appreciate the caution (not unique to Bogleheads) that past performance is no guarantee of future returns.

User avatar
Bulldawg
Posts: 515
Joined: Mon Jan 05, 2009 8:30 am
Location: Hotlanta

Re: Your major and investing/finance?

Post by Bulldawg » Sat Aug 18, 2018 1:27 pm

Accounting major . Business owner in various service businesses for most of career .

Seems like the Boglehead group here has many engineering /IT/ STEM majors represented. I think my major and experiences have helped me understand investing better , but I know many accounting /finance types who are definitely NOT Bogleheads . I think the LBYM frugal trait may be somewhat hardwired in for some. When I read The Bogleheads Guides or The Millionaire Next Door books , it seems more a confirmation of how I operate than novel ideas .
Last edited by Bulldawg on Sat Aug 18, 2018 1:34 pm, edited 2 times in total.
" IN GOD WE TRUST " ( official motto of the United States )

User avatar
Toons
Posts: 12925
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: Your major and investing/finance?

Post by Toons » Sat Aug 18, 2018 1:32 pm

A lot of Common Sense



:thumbsup
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

chambers136
Posts: 162
Joined: Tue Feb 28, 2017 9:49 am

Re: Your major and investing/finance?

Post by chambers136 » Sat Aug 18, 2018 1:37 pm

Engineering here. I think my interest comes from needing to understand why I’m doing what I’m doing. We had a financial advisor for a while, and all along I was analyzing returns, catching mistakes, etc. I don’t think my major taught me anything about finance, but my need to understand how things work probably led me to my major. As others have said, I don’t think college majors are a predictor of financial understanding

jeff1949
Posts: 657
Joined: Mon Mar 05, 2007 10:43 am
Location: Salem, OR

Re: Your major and investing/finance?

Post by jeff1949 » Sat Aug 18, 2018 3:10 pm

Chemical Engineering but then became an onion farmer. Not sure how all that correlates though. :sharebeer

AerialWombat
Posts: 157
Joined: Tue May 29, 2018 1:07 pm

Re: Your major and investing/finance?

Post by AerialWombat » Sat Aug 18, 2018 3:40 pm

Nuclear engineering major, but never made a career of it. I work in tax law.

#1 tenet of nuclear power safety: Verbatim compliance with written procedures.

Aka, stay the course.

Just gotta figure out what the course is, then I can write it down and comply. :)

getthatmarshmallow
Posts: 204
Joined: Mon Dec 04, 2017 9:43 am

Re: Your major and investing/finance?

Post by getthatmarshmallow » Sat Aug 18, 2018 5:21 pm

I don't think there's much correlation between majors and interest or maybe I know a disproportionate number of economists who are shockingly at personal finance, but a good story is the story of Thales of Miletus, cornering the olive oil market because his friends were teasing him, saying with all his brains why wasn't he rich instead of wasting his time measuring weather patterns (including as it turns out, boom and bust cycles in the olive harvest....) made his money and went back to his research.

MikeG62
Posts: 1040
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Your major and investing/finance?

Post by MikeG62 » Sat Aug 18, 2018 5:28 pm

Accounting major in college. Spent career initially in accounting and then in finance. Have read extensively on investing. Investing has always been an interest of mine.
Real Knowledge Comes Only From Experience

User avatar
5th_Dimension
Posts: 82
Joined: Mon Jul 11, 2016 1:05 am

Re: Your major and investing/finance?

Post by 5th_Dimension » Sat Aug 18, 2018 5:28 pm

BA in Fine Art, specifically abstract painting... the kinds of things that get sold in galleries. Really no correlation to being a Boglehead, but I will paraphrase one of my favorite quotes from "My Dinner With Andre":

When I was 10 years old all I thought about was art and music. Now I'm 36, and all I think about is money!
"My idea of rich is ordering the most expensive thing at Denny's"

DarthSage
Posts: 218
Joined: Tue Sep 19, 2017 9:39 am

Re: Your major and investing/finance?

Post by DarthSage » Sat Aug 18, 2018 5:48 pm

Electrical engineering. I love math!

I think, though, that it's not just about major. In my case, I grew up poor, and was determined not to be poor ever again. Interestingly, DH is also an engineer (MSME, works in nuclear), and is much less interested in finances than I am. Maybe because he grew up solidly middle-class, maybe because of her personality, no way to know. He does appreciate saving money, he's just not one to keep tabs on everything. Lucky for him, he has me.

daveydoo
Posts: 1540
Joined: Sun May 15, 2016 1:53 am

Re: Your major and investing/finance?

Post by daveydoo » Sat Aug 18, 2018 7:48 pm

Traveler wrote:
Sat Aug 18, 2018 11:45 am

I'm not sure there is a correlation between college major and financial lifestyle.
+1. It's all common sense -- and not very complicated. Non-BH personal finance -- now that's complicated!

There are plenty of folks on this forum who never went to college and who I'm sure could buy and sell me. And they seem pretty sharp.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

InvisibleAerobar
Posts: 162
Joined: Mon Jan 15, 2018 12:33 pm

Re: Your major and investing/finance?

Post by InvisibleAerobar » Sat Aug 18, 2018 7:55 pm

Chemistry

But it has an effect of zilch on my view of personal finance. It's a royal shame that they don't make personal finance a course you must pass before graduating (similar to how some universities require one to be able to swim 50 meters before graduating). "Saw the light" by accident: have been an avid listener of NPR's Onpoint podcast, and back in 2012, the show discussed about 401(k). First time I ever heard an in-depth discussion re: terms such as defined contribution, defined benefits, and section 401(k) of the Internal Revenue Code. Was fortunate that Marketplace Money was still running then and picked up a few other pointers, including topics such as index fund investing.

User avatar
abuss368
Posts: 12728
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Re: Your major and investing/finance?

Post by abuss368 » Sat Aug 18, 2018 7:56 pm

* Degree in Accounting

* Degree in Management

* CPA - Certified Public Accountant

I had an interest with investing sine the 6th grade when my mom, who is ex-Merrill Lynch, began to teach me investing.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Your major and investing/finance?

Post by acegolfer » Sat Aug 18, 2018 8:24 pm

InvisibleAerobar wrote:
Sat Aug 18, 2018 7:55 pm
Chemistry

But it has an effect of zilch on my view of personal finance. It's a royal shame that they don't make personal finance a course you must pass before graduating (similar to how some universities require one to be able to swim 50 meters before graduating). "Saw the light" by accident: have been an avid listener of NPR's Onpoint podcast, and back in 2012, the show discussed about 401(k). First time I ever heard an in-depth discussion re: terms such as defined contribution, defined benefits, and section 401(k) of the Internal Revenue Code. Was fortunate that Marketplace Money was still running then and picked up a few other pointers, including topics such as index fund investing.
+1
My university offers "Personal Finance" as an undergrad elective course. It's the most popular finance course to non-finance majors. I wish more students take it.

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Your major and investing/finance?

Post by acegolfer » Sat Aug 18, 2018 8:26 pm

AerialWombat wrote:
Sat Aug 18, 2018 3:40 pm
Nuclear engineering major, but never made a career of it. I work in tax law.

#1 tenet of nuclear power safety: Verbatim compliance with written procedures.

Aka, stay the course.

Just gotta figure out what the course is, then I can write it down and comply. :)
TY

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Your major and investing/finance?

Post by acegolfer » Sat Aug 18, 2018 8:28 pm

Tdubs wrote:
Sat Aug 18, 2018 1:13 pm
Undergrad in engineering: A simple design is usually better and safer than a complicated one.

Ph.D. in History: Historians are skeptical of theories. So, we don't believe that history repeats itself, and we don't think people who learn from history will do much more than learn the wrong lessons and screw up anyway. So I appreciate the caution (not unique to Bogleheads) that past performance is no guarantee of future returns.
Ironically, this is a good one.

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Your major and investing/finance?

Post by acegolfer » Sat Aug 18, 2018 8:29 pm

oysterboy wrote:
Sat Aug 18, 2018 1:06 pm
I was a history major and then went through law school. The things from those 2 educational experiences that did have an effect on my financial and investing philosophies were:
1. The significant effects of random external events and forces.
2. The need to clearly identify an issue and shed the emotional distortions that frequently attach to issues.
TY

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Your major and investing/finance?

Post by acegolfer » Sat Aug 18, 2018 8:31 pm

Svensk Anga wrote:
Sat Aug 18, 2018 12:46 pm
Another attitude that comes from engineering is a desire to optimize efficiency. Minimizing dollar leaks from the budget and portfolio is a cousin to minimizing waste from the processes my (former) employer uses.
Correct. In corporate finance, net working capital management is related to engineering.

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Your major and investing/finance?

Post by acegolfer » Sat Aug 18, 2018 8:34 pm

delamer wrote:
Sat Aug 18, 2018 12:28 pm
Economics.

I don’t know about correlations to specfic majors, but a big chunk of the mistakes that I see on the forum are due to innumeracy.

If you don’t have a basic understanding if math and statistics, it leads to bad financial decisions.

Which is not be say that everyone who understands numbers makes good decisions. We have a friend who is a CPA and his personal finances are a mess.
I agree. I believe people with good math/stat skills "tend to" make a "better" investment decision.

User avatar
celia
Posts: 8202
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Your major and investing/finance?

Post by celia » Sat Aug 18, 2018 8:35 pm

Love math.

Compounding is amazing! But it is important to start early so the compounding has more time to work.

I also volunteer for lots of things. In a way, it is entertaining to do tax returns for others and see what they spend their money on. I also learn from them (ie, what not to do). (AARP TaxAide)
Last edited by celia on Sat Aug 18, 2018 8:40 pm, edited 1 time in total.

acegolfer
Posts: 1092
Joined: Tue Aug 25, 2009 9:40 am

Re: Your major and investing/finance?

Post by acegolfer » Sat Aug 18, 2018 8:36 pm

arcticpineapplecorp. wrote:
Sat Aug 18, 2018 12:01 pm
psychology (M.S.). Human behavior, emotions, decision making/problem solving is somewhat related.
I'm interested. Can you explain a little more?

Dakotah
Posts: 67
Joined: Sun Jun 13, 2010 9:28 pm

Re: Your major and investing/finance?

Post by Dakotah » Sat Aug 18, 2018 8:42 pm

I'm an intelligence professional...and have a Masters of Science in Strategic Intelligence.
My studies were very heavy on logical fallacies, cognitive biases, and "thinking about thinking". I was drawn to Boglehead-ism (even before my studies) due to strength of the academic support and the logic-over-emotion aspects that I perceived. My later studies only strengthened my viewpoints on the matter.

Dottie57
Posts: 4249
Joined: Thu May 19, 2016 5:43 pm

Re: Your major and investing/finance?

Post by Dottie57 » Sat Aug 18, 2018 8:43 pm

:confused
delamer wrote:
Sat Aug 18, 2018 12:28 pm
Economics.

I don’t know about correlations to specfic majors, but a big chunk of the mistakes that I see on the forum are due to innumeracy.

If you don’t have a basic understanding if math and statistics, it leads to bad financial decisions.

Which is not be say that everyone who understands numbers makes good decisions. We have a friend who is a CPA and his personal finances are a mess.
Actually, it is just basic math that needs to be known. Simple multiplication will give lots of info on compounding. Addition is needed to add nex mneth to original. Subtracting for inflation and expense ratios.. Not much to it. Just a bit of time.
No statistics needed.

GoldenFinch
Posts: 1605
Joined: Mon Nov 10, 2014 11:34 pm

Re: Your major and investing/finance?

Post by GoldenFinch » Sat Aug 18, 2018 8:54 pm

I have a Ph.D.

I like research, stats, and trying to understand why people do what they do. :happy
Last edited by GoldenFinch on Mon Aug 27, 2018 8:35 pm, edited 1 time in total.

ResearchMed
Posts: 7060
Joined: Fri Dec 26, 2008 11:25 pm

Re: Your major and investing/finance?

Post by ResearchMed » Sat Aug 18, 2018 8:55 pm

delamer wrote:
Sat Aug 18, 2018 12:28 pm
Economics.

I don’t know about correlations to specfic majors, but a big chunk of the mistakes that I see on the forum are due to innumeracy.

If you don’t have a basic understanding if math and statistics, it leads to bad financial decisions.

Which is not be say that everyone who understands numbers makes good decisions. We have a friend who is a CPA and his personal finances are a mess.
Statistics here, and research design/ethics.
Also, not unrelated, I just always loved math and science, from the time I was a little girl, and doing things at a young age like planting corn in the back yard, half with fertilizer, half not, and such. (Our "garden" didn't look like those of the neighbors...)

But the statistics/research methodology certainly contributed a great deal to a comprehension of what "random variability" meant and could "look like", and also a keen understanding of the difference between causation and correlation.
Just the ability to "eyeball" data sets helped, too, but that's probably in part due to starting before things were so completely computerized, when one would actually delve into the raw data more than is often done these days.

It also has helped me to "smell a rat", etc., in term of various "claims". :annoyed

Tdubs wrote:
Sat Aug 18, 2018 1:13 pm
Undergrad in engineering: A simple design is usually better and safer than a complicated one.

Ph.D. in History: Historians are skeptical of theories. So, we don't believe that history repeats itself, and we don't think people who learn from history will do much more than learn the wrong lessons and screw up anyway. So I appreciate the caution (not unique to Bogleheads) that past performance is no guarantee of future returns.
"... we don't think people who learn from history will do much more than learn the wrong lessons and screw up anyway..."

This was a surprising take on "understanding history"!

RM
This signature is a placebo. You are in the control group.

User avatar
arcticpineapplecorp.
Posts: 3125
Joined: Tue Mar 06, 2012 9:22 pm

Re: Your major and investing/finance?

Post by arcticpineapplecorp. » Sat Aug 18, 2018 8:56 pm

acegolfer wrote:
Sat Aug 18, 2018 8:36 pm
arcticpineapplecorp. wrote:
Sat Aug 18, 2018 12:01 pm
psychology (M.S.). Human behavior, emotions, decision making/problem solving is somewhat related.
I'm interested. Can you explain a little more?
Well, in studying psychology I learned about how people think, cognitive biases or illogical thoughts/statemennts (mostly in cognitive therapy classes).

social psychology clasess were interesting. Learned things like:
Attribution theory (https://www.google.com/search?q=attribu ... fox-b-1-ab)
Downward Social Comparison (http://psychology.iresearchnet.com/soci ... omparison/)
Cognitive Dissonance (https://www.google.com/search?q=cogniti ... fox-b-1-ab)
Locus of control as it relates to self esteem (high esteem is related to internal locus of control for successes and external locus of control for failures, and the opposite is true for lower self esteem)

Right now I'm reading an old book by Martin Seligman titled "Learned Optimism". It's about how he came up with the theories on optimism, pessimism, depression, etc. Much is about whether and how you attribute successes and failures across three dimensions: pervasiveness, permanence and personalization. That is, when something negative happens to you do you see it as pervasive (this always happens to me), permanent (I'll never get out of this jam) and personalization (it was my fault) rather than "This bad thing that happened was a fluke, I'll get over it and it could have happened to anyone." The difference in how we think about events determines whether we're optimistic or pessimistic and in some cases can be related to depression.

Alot of cognitive errors occur in investing. Larry Swedroe wrote a whole book about it called "Rational Investing in Irrational Times", which was revised and titled "Investment mistakes even smart investors make and How to Avoid Them".

Tversky and Kahneman which were mentioned in this thread also have done so much work in the decision making of people with regards to financial matters. They are really the ones who changed everything. Before them the experts believed that people made rational economic decisions. Tversky and Kahneman showed the world that often people make irrational decisions. Dan Ariely continued this work in his book "Predictably Irrational".
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

User avatar
triceratop
Moderator
Posts: 5565
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: Your major and investing/finance?

Post by triceratop » Sat Aug 18, 2018 9:17 pm

I do math. The Riemann-Lebesgue lemma is analoguous to the idea that portfolio volatility decreases long-term returns.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

NotWhoYouThink
Posts: 2026
Joined: Fri Dec 26, 2014 4:19 pm

Re: Your major and investing/finance?

Post by NotWhoYouThink » Sat Aug 18, 2018 9:18 pm

BSEE
MSEE
EMBA

Took statistics courses in all three, and loved them all.
In the Executive MBA program, the statistics instructor was a physics PhD who figured out that he could make a more money in finance than in defense contracting. Really eye opening.

Father was a Chemical Engineer, and he showed me a plot decades ago with past performance plotted against future performance of mutual funds. No correlation. His message was buy the haystack, don't bother looking for the needle. And keep costs low. It's working so far.

User avatar
Sandtrap
Posts: 5206
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Your major and investing/finance?

Post by Sandtrap » Sat Aug 18, 2018 9:19 pm

HEDGEFUNDIE wrote:
Sat Aug 18, 2018 11:47 am
Philosophy.

My favorite theory is that we build our beliefs about the world in a meshed web, like words on a Scabble board. And just like Scrabble, we may not realize one of our words is misspelled (I.e. our belief is incorrect) until someone challenges us on it. And when that happens, even if we acknowledge that our belief has been proven false, it’s still incredibly difficult to change that belief, as many of our other (perfectly true) beliefs rely in some way upon that false belief, in the same way that every word on a Scrabble board is linked together.

Not sure what that has to do with with investing, I just think it’s cool :P
Very well said.
j :happy

User avatar
Sandtrap
Posts: 5206
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Your major and investing/finance?

Post by Sandtrap » Sat Aug 18, 2018 9:22 pm

Double Major in "Poverty" and "Hard Knocks" at "Blue Collar University" where many students are extremely motivated to learn and succeed no matter how hard or how long it takes.

User avatar
camillus
Posts: 476
Joined: Thu Feb 28, 2013 9:55 pm

Re: Your major and investing/finance?

Post by camillus » Sat Aug 18, 2018 9:30 pm

Nursing.

The body has many buffering systems that labor to keep different parts of the body in balance, say keeping your electrolytes at the correct levels by taking resources from elsewhere, or maintaining your blood PhD by increasing bicarb or over-ventilating CO2.

This is kind of like maintaining an asset allocation. Sell what's high to buy what's low.

My other degree is in theology. Ever hear of total depravity and human fallibility? Humans can be wicked :twisted: , but also stupid :oops: . As in, a person can be very greedy about accumulating wealth, but also very foolish and stupid about how to go about it. And while wealth should be a means to living a good life, the accumulation of wealth becomes the central focus of life. A person exchanges their life for wealth, and then they die. :shock:

Bogleheadism, as a religion, helps mitigate this with its focus on simplicity and accumulating "enough" - so one can take the saved time, focus, and resources to live life instead of focusing on wealth - and yet here we are posting on this message board :wink:

montanagirl
Posts: 959
Joined: Thu Nov 19, 2009 4:55 pm
Location: Montana

Re: Your major and investing/finance?

Post by montanagirl » Sat Aug 18, 2018 9:36 pm

History major, and then law school. But really I got all I needed between a personal finance class and some accounting in undergrad. Learned to use a financial calculator.

I remember the finance Prof going off on whole life policies. No way anyone could get talked into one after that reaming! This was in 1985.

HEDGEFUNDIE
Posts: 607
Joined: Sun Oct 22, 2017 2:06 pm

Re: Your major and investing/finance?

Post by HEDGEFUNDIE » Sat Aug 18, 2018 9:45 pm

How about this one (from the philosophy of science):

"For any finite set of data points, there are an infinite number of curves [and models, and theories] to fit those data points."

In other words, nobody knows nuthin'.

https://plato.stanford.edu/entries/scie ... rmination/
Last edited by HEDGEFUNDIE on Sat Aug 18, 2018 10:09 pm, edited 4 times in total.

Elixir
Posts: 3
Joined: Tue Jul 17, 2018 6:41 pm

Re: Your major and investing/finance?

Post by Elixir » Sat Aug 18, 2018 9:46 pm

Pharmacist (PharmD degree)

I’ve always wanted to retire early and this simple approach (BH 3 fund philosophy) always seemed to resonate with me. Not unlike a low-maintenance medication regimen for a patient.

RickBoglehead
Posts: 637
Joined: Wed Feb 14, 2018 9:10 am

Re: Your major and investing/finance?

Post by RickBoglehead » Sat Aug 18, 2018 9:48 pm

JoeRetire wrote:
Sat Aug 18, 2018 12:25 pm
acegolfer wrote:
Sat Aug 18, 2018 11:35 am
Specifically, is there a theory in your major that is closely related to BH investing?
No.

No theory from a college major is necessary to be good at personal finances.
This ^^^

Amphian
Posts: 123
Joined: Tue Jan 30, 2018 9:37 pm

Re: Your major and investing/finance?

Post by Amphian » Sat Aug 18, 2018 10:07 pm

I have a Bachelor's of Science in Mathematics and a Master's of Science in Computer Science. I'm not sure there is a related theory in either of those, but I'm obviously not afraid of doing math and equations don't phase me. I think one thing that does carry over from both of those is the idea of logically designing things and simplification. If you have a complex equation or a tricky bit of code, can you make it simpler? What is the core of the problem you are trying to work out? I got into index investing via another website about two decades ago.

delamer
Posts: 5780
Joined: Tue Feb 08, 2011 6:13 pm

Re: Your major and investing/finance?

Post by delamer » Sat Aug 18, 2018 10:35 pm

Dottie57 wrote:
Sat Aug 18, 2018 8:43 pm
:confused
delamer wrote:
Sat Aug 18, 2018 12:28 pm
Economics.

I don’t know about correlations to specfic majors, but a big chunk of the mistakes that I see on the forum are due to innumeracy.

If you don’t have a basic understanding if math and statistics, it leads to bad financial decisions.

Which is not be say that everyone who understands numbers makes good decisions. We have a friend who is a CPA and his personal finances are a mess.
Actually, it is just basic math that needs to be known. Simple multiplication will give lots of info on compounding. Addition is needed to add nex mneth to original. Subtracting for inflation and expense ratios.. Not much to it. Just a bit of time.
No statistics needed.
On the statistics part, I was thinking of interpreting portfolio survival rates, specifically.

What’s “add nex mneth?”
Last edited by delamer on Sat Aug 18, 2018 10:53 pm, edited 1 time in total.

Nate79
Posts: 3318
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Your major and investing/finance?

Post by Nate79 » Sat Aug 18, 2018 10:42 pm

BS in Chemistry, math minor then PhD in Chemistry. An interest in math and numbers for sure but finding this site educated me on all things investing.

Dottie57
Posts: 4249
Joined: Thu May 19, 2016 5:43 pm

Re: Your major and investing/finance?

Post by Dottie57 » Sat Aug 18, 2018 10:43 pm

delamer wrote:
Sat Aug 18, 2018 10:35 pm
Dottie57 wrote:
Sat Aug 18, 2018 8:43 pm
:confused
delamer wrote:
Sat Aug 18, 2018 12:28 pm
Economics.

I don’t know about correlations to specfic majors, but a big chunk of the mistakes that I see on the forum are due to innumeracy.

If you don’t have a basic understanding if math and statistics, it leads to bad financial decisions.

Which is not be say that everyone who understands numbers makes good decisions. We have a friend who is a CPA and his personal finances are a mess.
Actually, it is just basic math that needs to be known. Simple multiplication will give lots of info on compounding. Addition is needed to add next amount to original. Subtracting for inflation and expense ratios.. Not much to it. Just a bit of time.
No statistics needed.
Probability when interpreting with portfolio survival rates.

What’s “add nex mneth?”
Sigh... gibberish. I type it well.

JeepDaze
Posts: 105
Joined: Sat Mar 26, 2016 9:19 am

Re: Your major and investing/finance?

Post by JeepDaze » Sat Aug 18, 2018 10:45 pm

B.S. Applied Mathematics
Masters in Information Management

Post Reply