Tag Archives: Mark Tier

The Power of Habit and Investing

I am was a serious chocaholic. After robbing a candy store, I tried to gobble down the evidence as the cops closed in. How was I ever going to stop my fixation on dark, rich, creamy chocolate and replace my bad habits with healthier ones?

“Chains of habit are too light to be felt until they are too heavy to be broken.” –Warren Buffett

To learn more about habits:http://charlesduhigg.com/

An excellent 3.5 minute video on the power of habits: http://www.youtube.com/watch?v=a6p3lG9EDXw&feature=related

The author’s words: What sparked your interest in habits? I first became interested in the science of habits eight years ago, as a newspaper reporter in Baghdad, when I heard about an army major conducting an experiment in a small town named Kufa.

The major had analyzed videotapes of riots and had found that violence was often preceded by a crowd of Iraqis gathering in a plaza and, over the course of hours, growing in size. Food vendors would show up, as well as spectators. Then, someone would throw a rock or a bottle.

When the major met with Kufa’s mayor, he made an odd request: Could they keep food vendors out of the plazas? Sure, the mayor said. A few weeks later, a small crowd gathered near the Great Mosque of Kufa. It grew in size. Some people started chanting angry slogans. At dusk, the crowd started getting restless and hungry. People looked for the kebab sellers normally filling the plaza, but there were none to be found. The spectators left. The chanters became dispirited. By 8 p.m., everyone was gone.

I asked the major how he had figured out that removing food vendors would change peoples’ behavior.

The U.S. military, he told me, is one of the biggest habit-formation experiments in history. “Understanding habits is the most important thing I’ve learned in the army,” he said. By the time I got back to the U.S., I was hooked on the topic.

How have your own habits changed as a result of writing this book? Since starting work on this book, I’ve lost about 30 pounds, I run every other morning (I’m training for the NY Marathon later this year), and I’m much more productive. And the reason why is because I’ve learned to diagnose my habits, and how to change them.

Take, for instance, a bad habit I had of eating a cookie every afternoon. By learning how to analyze my habit, I figured out that the reason I walked to the cafeteria each day wasn’t because I was craving a chocolate chip cookie. It was because I was craving socialization, the company of talking to my colleagues while munching. That was the habit’s real reward. And the cue for my behavior – the trigger that caused me to automatically stand up and wander to the cafeteria, was a certain time of day.

So, I reconstructed the habit: now, at about 3:30 each day, I absentmindedly stand up from my desk, look around for someone to talk with, and then gossip for about 10 minutes. I don’t even think about it at this point. It’s automatic. It’s a habit. I haven’t had a cookie in six months.

What was the most surprising use of habits that you uncovered? The most surprising thing I’ve learned is how companies use the science of habit formation to study – and influence – what we buy.

Take, for example, Target, the giant retailer. Target collects all kinds of data on every shopper it can, including whether you’re married and have kids, which part of town you live in, how much money you earn, if you’ve moved recently, the websites you visit. And with that information, it tries to diagnose each consumer’s unique, individual habits.

Why? Because Target knows that there are these certain moments when our habits become flexible. When we buy a new house, for instance, or get married or have a baby, our shopping habits are in flux. A well-timed coupon or advertisement can convince us to buy in a whole new way. But figuring out when someone is buying a house or getting married or having a baby is tough. And if you send the advertisement after the wedding or the baby arrives, it’s usually too late.

So Target studies our habits to see if they can predict major life events. And the company is very, very successful. Oftentimes, they know what is going on in someone’s life better than that person’s parents.


I recommend reading The Power of Habit : Why We Do What We Do in Life and Business by Charles Duhigg: http://www.amazon.com/The-Power-Habit-What-Business/dp/1400069289/ref=sr_1_1?ie=UTF8&qid=1340109798&sr=8-1&keywords=the+power+of+habit

The Mental Habits for Investing

Obviously we seek to learn from other great investors, but how to incorporate their habits as part of our own?

The power of mental habits for investing: http://marktier.com/Excerpts/chap01-01.php

Investing “Guru” Mark Tier’s Interview

In finance, you cannot easily prove a model right by observation. Data are scarce and, more importantly, markets are arenas of action and reaction, dialectics of thesis, antithesis and synthesis. People learn from past mistakes and go on to make new ones. What is right in one regime is wrong in the next.

In finance you play against God’s creatures, agents who value assets based on their ephemeral opinions. Can you comprehend other pretenders’ uncertainty?–Mark Bradbury

Mark Tier, An “Austrian Investment Guru”

Mark Tier on Effective Investing, Where the World Is Headed and Why Financial Literacy Helps

Sunday, February 26, 2012 – with Anthony Wile

My lessons: Austrian economics is important for understanding reality but beware of being a macro-economist. Mark Tier filed as an investor but then learned from Soros and Buffett. If he can, you can too!


Mark Tier: I’m from Australia but in 1977 I moved to Hong Kong. I’m still based there, but I spend most of my time these days in the Philippines. In a sense I’ve been a nomad all my life. My father was in the army so we rarely spent more than three years in any one place. We ended up in Canberra − that’s Australia’s equivalent of Washington − where I went to high school and university.

I studied economics and political science at the Australian National University. In my final year of economics I discovered Ludwig von Mises (thanks to Ayn Rand). In what should have been my last exam I made a fundamental mistake: I argued from Mises’ perspective against the examiners. So I had to repeat that final year to get the degree.

Then, when I got out into the real world, I found that I had to unlearn pretty much everything I’d been taught. (I also had to struggle to unlearn nonsense economics from university).

My professors were all Keynesians; reality is Misesian.

Daily Bell: Bring us up to the present and how you began to focus on investing.

Mark Tier: I’ve always wanted to be a writer. When I was 14, I’d get up early and pound an ancient typewriter for a couple of hours before going to school.

After graduating, I started writing a book that was published as Understanding Inflation (and became an Australian bestseller in 1974). I put an ad in the back for an investment newsletter − and I’ve been “unemployable” ever since. When I moved to Hong Kong I renamed it World Money Analyst. In 1991 I sold it and “retired.” That lasted about three months. I was a partner in another newsletter business for a few years. Since 2000 or thereabouts, I’ve written three books and am now working on a couple of others.

Daily Bell: What’s your track record been like?

Mark Tier: Actually, until I figured out what became The Winning Investment Habits of Warren Buffett & George Soros, lousy.

Ironically, in the World Money Analyst I advised other people what they should do with their money. My own forays into the market usually ended with burnt fingers.

Once I applied (starting in 1998) what I call the 23 “winning investment habits” to my own investing, everything changed.

For the next six years my personal stock investments went up an average of 24.4% per year − compared to the S&P’s 2.3% − without a single losing year, compared to three for the S&P. A major, major transformation.

I can’t tell you my precise track record since then as I stopped keeping track of it. Put it this way: except for a dip in 2008, my net worth has gone up or remained stable. And that’s after paying the rent, putting food on the table, putting four kids through private schools and university, and indulging in vices like latest electronic gadgets and expensive cigars.

And when I get up in the morning, I have the luxury of choosing to do whatever I want to do with my day. Mostly, I write.

Entire interview here:http://www.thedailybell.com/3644/Anthony-Wile-Mark-Tier-on

Mark Tier’s web-site and books on investing:http://marktier.com/Main/index.php

Video lecture on smoking and property rights:http://www.youtube.com/watch?v=udlouHR4YcQ

Audio Interview: http://www.la.org.au/audio/221011/interview-mark-tier