Investments, gullibility and trust

If you have some savings to invest I urge you to first read this fascinating column about a Ponzi scheme in the Philippines.  If you already have invested some savings, including a pension fund, I urge to read the column and evaluate your position.

The column is about he nature of gullibility and trust and what the author calls the inflation of trust.  It is what allows Ponzi schemes to suck in their victims.

The reason I encourage you to read it is that I think it describes the psychology behind the operation of the larger investment industry.  Through the years there have been financial collapses in  which lots of people have lost lots of money.  Regardless of what the financial salesmen might promise there is a high probability it will happen again.  This explains why and how.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

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One Response

  1. A bit vague, but behavorial economists and psychologists are working on the important subject of the nature and extent of trust right now.

    Psychology and behavorial economics is beginning to merge, and merge again with experimental economics. It is a great development in economics. An overdue shift away from that mathematical gloop which dominated economics for half a century.

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