Behavioral finance FAQ / Glossary (N-O)

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Na


Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
i: incidental

Narcissism, narcissist



Due to its length, this article
       is in a separate page

of this "N-O" glossary section

Narrative, narration

See numeracy bias

Narrow thinking



Due to its length, this article
       is in a separate page

of this "N-O" glossary section

Ne


Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
i: incidental

(human) Need



Due to its length, this article
       is in a separate page

of this "N-O" glossary section

Neighborhood effect

01/1i + see home bias, familiarity,
availability heuristic

Neural / neuronal nets



Due to its length, this article
       is in a separate page

of this "N-O" glossary section

Neuro-linguistic, Neuro-semantics

Neuroeconomics, Neurofinance

Neuropsychology

Neuroscience

Due to their lengths, those articles
       are in a separate page

of this "N-O" glossary section

 

Neutral market, Neutral trend

See trend, volatility,
accumulation, distribution

Asleep? Or just waiting?

Definition:

A neutral market / neutral trend refers to a half asleep market
period without any clear price trend, neither uptrend nor downtrend.

Wow, a long truce, white flags on all sides of the battleground,
while troops move only laterally.

=> Who will shoot first?

How investors might react?

Here are some hints:

Most traders (option traders, swing traders) would play only on volatility

(or on possible changes in volatility, as volatility tends to be low in neutral
markets).

Some value investors and contrarians might start

* to buy ("accumulation") if prices are low (after a prolonged crash for
   example),

* or to sell "distribution" if prices are puffed up (end of a bubble).

Some "big hands" might already use that resting phase by discreetly
accumulating or distributing market assets (see accumulation /
distribution)

(effect of / reaction to) News

03/04i + see information

No


Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
i: incidental

Noise trader / Noise trading


 

Due to its length, this article
       is in a separate page

of this "N-O" glossary section

Non-independence

(in decision distributions) see independence

Non-linearity, nonlinear effect / system

Non-stationary

Due to their lengths, those articles
       are in a separate page

of this "N-O" glossary section

Norms (social)

01/1i + see groupthink, social learning

Nostalgia stocks

See image types
+ anchoring, underreaction

Ex-movie stars.

Nostalgia stocks are stocks of companies that:

Had their moment of glory or fashion,

Lost most of their attractiveness since then,

But are still rather overpriced in comparison with their prospects, as

their ex-fans' mfrains stay anchored in their past value.

Those "has been" artists kept a sizable fraction of their ancient followers.

=> They differ in this respect from stocks which were also popular but are
       now underpriced after a series of disappointing business performances.

If a serious analysis shows than an earnings recovery is really in
sight, those other securities with depressed prices would better
be classified in the "value stock" category.

Nu


Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
i: incidental

Numeracy bias



Due to its length, this article
       is in a separate page

of this "N-O" glossary section

Numerology


03/1i,2i,11i + see magical
thinking /numbers, small
numbers, numeracy bias

Number superstition

As financial matters rest on numbers, there is a tendency by some quasi-
esoteric "believers" to:

  Give nearly magical attributes to some salient numbers.
     Some examples are :

Round numbers, Fibonacci "golden" number,

Narrow "economic indicators" (Voodoo economics), past statistics
    that are not fully relevant
or that cover too short periods.

The believers base their investment decisions on such flimsy signals,
    although they have no relation with the fundamentals or the state of
    the market.

Of course, when many people follow those irrational indicators, self-
fulfilling prophecy might take place. But this is far from being always
the case.

Ob


Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
i: incidental

Obedience to "experts"



Due to its length, this article
       is in a separate page

of this "N-O" glossary section

Objective

See goal

Observer bias

See reflexivity

Sometimes the observer changes the phenomenon it observes.

We have here (see those words) reflexivity, self-fulfilling prophecy, self-deluding
prophecy...

=> For example, the people economic behaviors are obviously influenced
      by the economic state of affairs and influence it in in their turn in a way that
      either maintains or reverts that situation.

Op - Ov


Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
i: incidental

Ophelimity



Due to its length, this article
       is in a separate page

of this "N-O"glossary section

Optimism / optimistic bias, overoptimism


Due to its length, this article
       is in a separate page

of this "N-O" glossary section

Ostrich effect

See cognitive dissonance, narrow thinking

Overconfidence, overconfident

 overconf

   

Overleverage

 


overleverage

Overpricing / underpricing

 

over / under

 

Overreaction / underreaction

 

  overreact

Over-reliance

- on analysts, experts, advisors

- on management objectives

- on numbers, models

- on rules, regulations

 

overreliance

overreliance

overreliance
overreliance

   

Overtrade, overtrading

Oversimplification

 

over / under

over / under

 

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This page last update: 28/08/15
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