The Psychology of Investing w/ BlackRock’s Emily Haisley (RWH069)

Summary

William Green interviews Emily Haisley, head of Behavioral Finance at BlackRock, exploring the psychology of investing. Haisley details how her team uses behavioral analytics and wearable technology to help fund managers identify and counteract biases like loss aversion and disposition bias. The discussion covers team dynamics, cognitive diversity, stress management, AI-driven simulation games, and personal practices like mindfulness and breath work. The conversation offers practical insights into improving investment decision-making by understanding and mitigating psychological pitfalls.

• Emily Haisley leads BlackRock's behavioral finance team, which uses analytics to quantify biases in portfolio managers.
• Common biases include myopic loss aversion, disposition bias, and sunk cost bias, each with structural nudges to mitigate them.
• Team decision-making is improved by demanding independent points of view, blind voting, and formal devil's advocate roles.
• Cognitive diversity—across gender, geography, and politics—helps cancel correlated errors in investment committees.
• Physiological data from wearables like Oura Ring link stress to risk-taking, and Haisley advocates rest as essential for rational decisions.
• BlackRock uses an AI-driven simulation game to let teams rehearse decision-making under volatile, time-pressured scenarios.
• Haisley emphasizes mindsets of learning, embracing uncertainty, and subjugating ego, drawing on her uncle's teachings and personal practices like breath work.