Ep. 526: I Will Survive with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
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The Pavlovian Bell
Incentive-cost bias is a pure Pavlovian phenomenon. Westinghouse blew up two or three billion dollars pre-tax at least, loaning developers to build hotels and virtually a hundred percent loans. That would never have been possible if the accounting system hadn't been such that for the initial phase of every transaction it showed wonderful financial results. People who have loose accounting standards are just inviting perfectly horrible behavior in other people and it's an absolute sin.
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