I’ve posted Podcast #191 to the “RobCasts” section of the site. It’s called The Behavior Gap.
Carl Richards writes about this concept at his fine blog. It’s rooted in an important idea — that what matters is how stock investing strategies affect the humans who employ them, not how they look on a piece of paper rooted in a purely theoretical and entirely impractical understanding of how the world works. Where I find fault with Richards is in his unwillingness to offer real solutions to the Behavior Gap problem. The solution (I believe!) is to explain to people the flaws in the Buy-and-Hold Model. Once people are freed from the pull of the self-deceptions that govern this Get Rich Quick scheme, the intense emotionalism that characterizes this model goes away and investors are freed to invest in rational and realistic and effective ways.
Let’s not just talk about the Behavior Gap. Let’s get about the business of solving it!