294. Can you time the market? Business cycles, bubbles and behavioural traps | Part 4 with Evan Lucas

The final part of the economics series tackles the question every investor asks eventually: can you actually time the market? Evan Lucas's answer starts one step back, with why the market isn't the economy in the first place, and ends somewhere more useful: the behavioural traps that catch investors at every point in the cycle, and the one thing you can actually control.

In this episode we'll discuss:

💸 Why the economy and the market are different things: individual companies chasing shareholder value can sidestep the economic cycle entirely, which is why markets rally while economies stumble

💸 Timing the market versus time in the market: why picking the peak is a fluke dressed up as analysis, and why markets price 12 months ahead using forecasts nobody can actually make

💸 Is investing just gambling? Evan's distinction: gambling is risk with nothing behind it, investing is backing an asset that produces something, with Warren Buffett's gold versus farmland comparison

💸 Loss aversion, and the Kahneman experiment showing we'll gamble to avoid a guaranteed loss even when the maths says take it

💸 Why your eyes go straight to the red holdings in your portfolio while ignoring that the whole thing is green, and what the rational move usually is

💸 Herding, recency bias and gambler's fallacy: GameStop, crypto and the "have I missed the AI boat?" feeling, and why chasing the herd amplifies losses

💸 The sunk cost trap, told through the Concorde fallacy: decades of good money thrown after bad because too much had already been spent to stop

💸 The takeaway from the whole series: cycles happen in economies, businesses and markets alike, and controlling your own behaviour is the only lever that's reliably yours

That wraps the four-part series with Evan. If you missed the earlier episodes, go back for how the economy works (part one), inflation, interest rates and the RBA (part two), and property and housing (part three).

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