This week on Prof G Markets, Ed Elson is joined by Scott Nations, President of Nations Indexes and author of “The Anxious Investor”, to break down why human psychology often leads to poor investment decisions, and what you can do to counteract it. He also shares his views on the boom in options trading, explains whether or not he believes we’re in a bubble, and outlines what his number one risk is for 2026.
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Timestamps:
00:00 - Today’s number
00:21 - Today’s episode
00:57 - Interview with Scott Nations
01:10 - Why is the human brain so bad at making investment decisions?
03:15 - What are some of the biases that screw investors up the most?
05:33 - Is that another bias that we see in the markets or is that less of a problem?
07:08 - Can you talk more about the phantastic objects bias and whether or not we’re seeing this today?
09:32 - How do you think about the difference between narrative and numbers and how should I think about stories when I’m investing?
12:49 - Who are you supposed to trust if you can’t rely on your own brain?
15:17 - Ad Break
17:37 - Have you experienced herd mentality and are there any processes you employ to prevent falling susceptible to that?
19:42 - Which forces are the most significant in your mind right now and how do you see it playing out in 2026?
23:11 - Why is that we’re seeing less volatility today?
25:24 - Is it almost more concerning if there's no volatility in a situation like this because it almost says people don't care?
27:48 - What does this explosion in options trading tell you about the state of the markets?
30:11 - Could this gambling trend in the stock market lead to a larger problem than people expect?
33:21 - What do you make of the fact that America has decided that prediction markets are fair game?
36:02 - Ad Break
38:48 - Do you believe we’re in a bubble and how do you think this will all unfold in 2026?
40:47 - Are there any financial instruments that you find more concerning than others right now?
43:36 - How big of a concern is private credit to you?
46:00 - Is there anything that you’re really focused on going into the year?
47:41 - Is inflation your number one risk in 2026?
49:27 - What would your advice be to young people today?
50:54 - Credits
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