Adam Larson: 00:05

Welcome to Count Me In. I'm Adam Larson, and today's episode is one you won't wanna miss. We're joined by Rob Stephens, founder of CFO Perspective and an expert in behavioral finance to explore how understanding human behavior can transform the way we approach financial decisions. Rob explains how behavioral finance started in personal finance, but its powerful applications in corporate finance, influencing areas like mergers and acquisitions, debt and equity management, and pricing strategies. As a leader in the field, Rob walks us through the thinking errors, biases, and heuristics that can cloud judgment and shares practical strategies like broad framing to enhance decision making in organizations.

Adam Larson: 00:44

This conversation is packed with insight to help controllers, CFOs, and finance leaders better understand themselves, their teams, and their decisions. So stick around as we dive into behavioral finance with Rob Stevens. Rob, I'm really excited to have you on the podcast today. And today, we're gonna be talking about behavioral finance. And so the best first question would probably be to ask you, so what is behavioral finance, and how does it relate to traditional finance?

Adam Larson: 01:15

Because I'm sure people are wondering, what are we talking about here?

Rob Stephens: 01:17

Yeah. Yeah. That's a great starting point. And and the key point to make is it's not completely different than traditional finance. It builds on, it informs traditional finance.

Rob Stephens: 01:28

So traditional finance was a a very much a deductive sort of exercise of saying, you know, what is the correct price? What people should what should people do rationally in this situation for economics, purchasing, an investing decision, corporate decision, those sorts of things. What behavioral finance did is it started on the personal financial side, and what researchers were finding was that people were doing things that violated these norms, these expected actions in traditional finance, and and particularly to their detriment. And so what behavioral finance started studying was, are there patterns to these? Do people make patterns of decisions that causes them to make poor investment decisions or poor decision management in a a corporate setting or poor decisions in in how they pick retirement plans or health benefit plans or things like that?

Rob Stephens: 02:20

So I looked and started very much in the personal financial side, but people are people, whether they are making decisions about their personal finances or they're making decisions for their company. And so that's really been the fascinating thing for me in particular, was applying it into corporate finance. So how does it impact mergers and acquisitions? How does it impact dividend policy? How does it impact the capital stack?

Rob Stephens: 02:43

You know, the cap stack of debt versus equity decisions, or how do we choose projects, and and are there flaws in how we run the analysis on choosing projects on pricing and many other app applications of it.

Adam Larson: 02:55

So what you're saying makes a lot of sense, but why should controllers or CFOs or your corporate finance app, why should they really care

Rob Stephens: 03:01

about Yeah. This is this, like I said, I think there's been so much found in the personal financial area, and it's been well explored. And I think the next area of great exploration of this and application of this is in corporate finance. And so I think it has a ton of applicability to FP and A, CFOs, corporate finance staff, things like that. So what are we talking about?

Rob Stephens: 03:23

Well, one, if you're a company and you're selling to consumers, you have to understand consumer psychology. And that's where a lot of pricing psychology happens and understanding how to set reference prices and discounts to those reference prices and what how that drives consumer behavior. So it has an application on the sales side actually there. But also a lot of times, I know I've been the chair of a pricing committee, and that impacts the pricing decision decisions and how to set pricing for products. The other is debt and equity, and that's very much in the wheelhouse of CFOs.

Rob Stephens: 03:57

Because overconfidence, excessive optimism, and things like that can cause companies to take on too much debt, and that partly comes from the perception that equity in the market's not being valued correctly. So you don't wanna issue equity. You rely too much on debt. You become cash constrained, and that can make you more vulnerable for bankruptcy. And, also has major cash flow implications because, an overconfident manager may see too many opportunities or, especially, overoptimistic, maybe too many opportunities that when you run a net present value analysis, you think there's all these great deals and you invest, invest.

Rob Stephens: 04:32

But at the same time, you don't wanna take on equity to fund those investments. So on the asset side and on the investment side, you're overinvesting. And on the funding side, you're not bringing enough investment in and relying too much on debt. So you're really leveraging in a very dangerous way in that situation. A massive, massive area is group decision making.

Rob Stephens: 04:52

How do we make good decisions as a management team? And this is really when I started thinking about this. I mean, I started when I was the CFO of banks and thinking, how do I keep my my head cool? You know, I was the CFO of banks during the Great Recession. It was a hard time to be a CFO of a bank.

Rob Stephens: 05:06

And so how do I keep my head cool managing the bank and our investment portfolio and other things? And then I started realizing, wow. These findings apply so much to how we make decisions as groups as a management team of the banks. And so there's a lot of application there of what's what are good decision making processes? How can we improve how can we improve the decision making process at companies?

Rob Stephens: 05:30

And then finally, it's it's ownership too. I've I've worked for family banks and family owned businesses. I worked with small business owners. And there's all sorts of wants and desires outside of just pure money and how do how do we balance those things in setting up the company to meet those needs and not just a a pure monetary risk reward things. But also too, once again, it gets into dividend policies and understanding the psychology of the investors on the in the equity side to understand dividends and and why they're so valued in in the marketplace.

Adam Larson: 06:03

Mhmm. A lot of times when people talk about decision making, it's more of, hey, what do the numbers say, and let's make the best decision based on that. But I like that you're bringing up the whole human aspect of decision making, because it's not just about, Hey, this is what the numbers say. There's so many other elements. Are there are there different things, like factors that we should be looking for to making the right decisions so that we're not so that we're maybe I'm not asking that correctly, but what are like, what are some of the best ways to make good decisions?

Adam Larson: 06:32

Because because it's not just about the number. Like, we there's a human aspect based on what you're saying.

Rob Stephens: 06:39

Right. There's two aspects to that. One is, like, when we talk about owners, consumers, those sorts of things, what do they want? And and particularly in personal finance, it had all been boiled down to risk and reward. And what and I think in the early days of behavioral finance, the thought was, oh, these people, they just don't understand finance, and they're making mistakes just because we're human.

Rob Stephens: 06:59

And I think I think Meyer Stathmann really advanced the concepts in behavioral finance in behavioral finance two point o saying, no. We are people, we want things beyond just money. Like, we buy products because of what they say about us or things that we believe in, where investors wanna invest in certain things because it's their company, it's their country, it's a local area or something like that. So there's all sorts of utility, and we get all the way back to the economic concept of utility, and it's so much broader than than than pure money many times. And so, yeah, that's one part of it.

Rob Stephens: 07:36

Another part too is even in companies like I talked about ownership, there are many things, particularly when you work with a family owned company, when you work with just a few and, a small company with just a few owners or something like that. I mean, they made these companies. I made my company for reasons far beyond the numbers. And so you to understand that and understand all the desires and wants of those people is the behavioral finance thing. And that actually gets into other parts, is financial therapy and some other things like that.

Rob Stephens: 08:02

But the other part of that is the decision making process. So let's just go back and say, we're just trying to make good decisions, even if it is even if it is just about the numbers. Now what's fascinating is good decisions aren't about the analysis. And one of the greatest books ever my favorite book of applying behavioral finance to a corporate finance sin situations is Olivier Sibonie's book, You're About to Make a Terrible Mistake. It's absolutely incredible and summarized so much of what's been found in the corporate area for decision making.

Rob Stephens: 08:35

So let's talk about that in corporate decision making with behavioral finance. The key thing for groups is to is to not to come to agreement too quickly around one area, because it's so easy once a leader, a CEO, or something starts to lean a little bit one way, suddenly everyone just falls in line. So what's really important, and particularly for the leaders, to encourage divergent viewpoints and additional options. We really need to see what are all the options we have, and we really need to challenge once we start to lean a certain way. So there are ways to do that.

Rob Stephens: 09:06

One is the premortem, and that's where the leader says, okay, we're leaning towards a decision. Let's do a thought experiment. Let's say we did this, and then somewhere down the road, five, ten years from now, three years from now, it became it was a complete disaster. Why was it a disaster? So suddenly, instead of thinking of ways everyone's thinking of ways to justify and come to a quick conclusion, or or just naturally your mind starts to filter out negative thoughts about it and just starts to, think of positive thoughts of why you should do something, you're really starting to stretch yourself and say, am I missing anything?

Rob Stephens: 09:38

And so you're starting to think of the other side. If nothing else, it helps increase your, sensitivity analysis, your risk mitigation of the situation, and really rounds out the even if you rounds out the situation, even if you choose to go a certain path, you you understand so many more of the implications. And either you have alternate plans ready, you have risk mitigation you put into place, you have other things. If you don't do that, another option is a devil's advocate or red team. A devil advocate advocate's one person.

Rob Stephens: 10:06

A red team's a team whose job is to basically advocate for the opposite side of where the room is leading, and they're tasked with that. So that kinda takes away some of the office politics of the naysayer or something is shooting down. You know? It's there's a lot of pressure to not be the squeaky wheel. There's a lot of pressure to not be the naysayer.

Rob Stephens: 10:23

So this is where they're tasked with literally by the by the leadership or by the group to, you you know, really, we need to reintroduce debate and thought and stretch ourselves as a room, and so you have to take the other side. The some other ideas are when ideas come up for a a budget, you need to put put out more than just a yes, no option, not just like, here's my up here's my budget, up or down vote, or here's my plan. And a great way to do that, zero based budgeting and decision packets, and they do those things to present multiple options. Or that when someone presents something, they can't just present an option for an up or down vote. They have to present multiple options.

Rob Stephens: 11:00

That improves decision making, the decision making process, and makes it better. Another great one in decision making too is is what they call broad framing versus narrow framing. Mhmm. And that's particularly great for budgeting and processes too, or cost estimation and and and project management. And that's where you think, okay.

Rob Stephens: 11:21

We've got this massive CapEx situation, some big capital expenditure we wanna do. And so what's the probability we're gonna get it done on time? What's the probability it's gonna come in on budget? And what we know, like looking at large construction projects or corporate projects, is that they are horrible at coming in on time and on budget. And why does that happen?

Rob Stephens: 11:42

Well, a lot of times we start with, what do we think we're gonna spend on this? When do think we're gonna finish this? And a much better way is to look outside of that, outside of yourself, and look at the broader things either in the past of the company or outside of the company and say, how long has it taken other our competitors to do this? How long has it taken, how much does it cost others to do this? Is there any reason that we think we're gonna be so much faster than them or so much cheaper than them to pull this off?

Rob Stephens: 12:07

Is and so it's a way to, once again, stretch your boundaries on the possible of the whatever scenario, your your project or budget you're planning on.

Adam Larson: 12:17

I I think you've given some great examples, especially when it comes to decision making. What if somebody's listening to this and they're and they're reflecting on what you're saying, and they're saying, well, we don't have any decision making, like, don't have any errors in how we our decision making process. You know, lot of times we can be blind if we're if it's not revealed to us. How do we how do we get from being blind to it to kind of being on the path to having better communication and openness when we're making these decisions like you were just describing?

Rob Stephens: 12:41

Right. One of my favorite stories comes from, Subhani's book, and it talks about, the anti investment wall or something like that. And it's a it's a company. It's a a VC company, I think, that puts up the list of the investments they did make that turned out to be winners. So sometimes it's the thing you didn't do that goes the right way.

Rob Stephens: 12:59

Now that a company like that can look at their lost opportunities. More often than not, it's it's being humble and remembering the times you did something as a company and it didn't work. And so a huge, huge part of this is just humility and remembering things. And no one wants to bring up the past or negative things. And and in all honesty, a lot of times people who have done bad things in the past aren't with the company anymore.

Rob Stephens: 13:21

And so there is this kind of survivorship bias that the that the bad things that happened in the past get get quietly put away, aren't talked about. Those people are let go or have to or lose so much political capital, they have to go away. So the first thing is is the honesty that we are human, and we've made mistakes, we will continue to make mistakes, and those sorts of things. I think the next step then is because we're human, that gets into what we talk about as biases and heuristics. Now, heuristics are rules of thumb.

Rob Stephens: 13:49

They're simple ways of doing things. A classic is how do we value things? Like, I worked in banking, it was one times, one and a half times book is a good value for a trade for selling the bank or buying a bank, or two times book is a good so it's geez. Quick rules of thumbs we use to make quick decisions or to maybe evaluate quickly the the potential of a decision or an opportunity or something like that. But there are times when and then biases are patterns of action.

Rob Stephens: 14:19

Particularly, when we talk in behavioral finance, they're patterns of action we take that are detrimental to us, that we agree to quickly in decisions that we're overconfident, that we're overly optimistic about the future, that we we are subject to what's called confirmation bias. And I think this gets directly to your point too, is in confirmation bias, we subconsciously we're constantly, filtering information, but subcon but confirmation bias talks specifically that we apply two different questions when we're presented with information. If it's information that we agree with, we subconsciously ask, can I believe this? It's a fairly low bar to clear versus the question we ask and filter out information when we don't, when it challenges what we believe. And in those cases, we say, must I believe this?

Rob Stephens: 15:05

This is challenging my belief, and so I'm gonna set the wall much higher. And what this tends to do with confirmation bias is the negative in or the whatever challenges what we see or want to believe gets filtered out subconsciously, and then what we wanna believe, we just end up further entrenching our our current beliefs. And the problem is is it it leaves us blind to when there's changes in the business environment or things like that. So there's all sorts of these biases and heuristics. I could go on and on, and and believe me, my students, they have to listen to a whole I I call it the forced march through the biases and heuristics.

Rob Stephens: 15:40

There's dozens of these things. So just becoming aware of all these common thinking errors of us as humans is a good starting point. Then once you're aware of them, be aware of the times when you're most susceptible to them. When are you tired? When are you hungry?

Rob Stephens: 15:53

When are you rushed? When are you stressed out? When are you overwhelmed by the options? You're tending to make, your a more emotional decision, a, a decision that may be based more on a heuristic or a or more vulnerable to these thinking errors. And those are the times then to slow down.

Rob Stephens: 16:11

Slow down the decision making process. Challenge where you're going. Think about the opposite potentially. Bring in outside help. Have other people point out when you may be in a cognitive minefield, a dangerous place where you're subject to these things.

Rob Stephens: 16:24

And that's one reason why companies tend to make better decisions than individuals is because they naturally slow down the decision making process. But even then, when you bring in when you talk in a company, you're subject to groupthink and all those things, and that's where you have to kick in those other things I just talked about a little bit ago to improve the decision making process of a group. But, yeah, it all starts with humility and awareness.

Adam Larson: 16:45

Humility and awareness. Yeah. I like that. Well, in those thinking errors you just mentioned, it makes me go back to what you're originally saying, in one of the first question we were talking about, how, like, debt and equity can like, our thinking errors can affect the amount of debt we have, the amount of equity we can make the those those bad types of decisions. How does that like, how do you overcome that side of it, especially when you're trying to make big decisions that affect your organization?

Rob Stephens: 17:10

Right. And so, I can't remember if I ever completed the thought that I talked about earlier about Olivia's and, you're about to make a terrible mistake, but he Olivia cites something when he talks about analysis is just a small part. I think it was, like, 8% or something of a decision. And the other two pieces are the decision making process and things outside of your control. Mean, we have to be honest that we live in an uncertain world that whether you call it luck or fate or just the way things are or stuff happens, that just the well, you can make the greatest decision with the information you have, with the best process, and there are still so many variables outside of your control that will cause an outcome to to cause a a bad a very bad outcome to a very good decision.

Rob Stephens: 17:54

So one of the things we have to do too when we look back at our decisions is look back and say, did we use a good decision making process? Did we really think through the options? Did we challenge ourselves? Things like that. So particularly, like, with debt and equity, how do we get into that trouble there?

Rob Stephens: 18:08

That's where you have overconfidence is one of the major drivers of that. By nature, financial leaders like CEOs tend to be just very, very high in overconfidence or overoptimism. Now, a CFO, they can't be too cocky about that either, thinking they're not subject to it, because CFOs are very much subject to overconfidence and over precision in their forecast. You know, thinking that there we tend to not factor in as much volatility as there is in real life. And so we believe our projection's a little too much.

Rob Stephens: 18:40

And the problem is is when the market goes against you and you've got all that debt, you're very, very exposed to cash flow issues and liquidity crises, and then you're talking about bankruptcy, or you're missing massive opportunities to competitors who are cash rich and are really getting the deals in the downturns. So parts of the ways you do that, like we talked about, you think out, you you bring in conv voices, opinions, perspectives, the challenge, the the status quo. You really that's where you get into sensitivity analysis and really pushing the bounds of sensitivity analysis, what could happen, in different scenarios. I think, once again, you just have to be honest and and with yourself and realize the biases you may have tendencies towards, And so that means you may need to realize that, you know, we keep stacking up this debt, and, we need to balance out our liquidity. So I come from a banking background.

Rob Stephens: 19:35

I've been the CFO of a few banks or senior vice president of a few banks. I mean, we are forced by regulation to do all sorts of scenario analysis and stress testing and all sorts of things, particularly after the great recession. And so I think a corporation has to do the same sort of things. And what's what will happen is, initially, those boundaries will be not far enough, that the world is a much more volatile, dangerous place than we originally think. And so you have to start with those boundaries and then push them out, and then look at those scenarios, look at those, and stress test your assumptions or sensitivity to test your your assumptions to know the key assumptions to these business plans, and then dial in and really see what, you know, what's the spread on this, and then say, do I need to, you know, mitigate the plans we're thinking about?

Rob Stephens: 20:21

Do I need to be a little bit more flexible and change the plans? Do we need to really balance out and maybe, you know, and not use so much debt? Because it's gonna in certain scenarios, it causes liquidity crises for the company that are, you know, not way way out there tail risks, but, you know, a a little bit out there, and what are we gonna do about that? So it's just looking at a broadening out into a big and volatile and uncertain world.

Adam Larson: 20:46

There's a lot of things uncertain. And as you're making these decisions and becoming better decision makers in the organization, we might look back and see that there's decisions we made that weren't so good, and you part of that is humility and understanding how to adjust that. Why is this so hard sometimes to remove those bads, the bad business that we started or bad investments that we did as an organization? Because sometimes it's hard to to to distance ourselves from them.

Rob Stephens: 21:11

Yeah. Exactly. So interestingly enough, sometimes businesses are too conservative when they look at a project by project basis, and so they need to really look at projects on a portfolio basis, just like an investor needs to look at their portfolio. If we talk modern portfolio theory that you have to look at, you know, multiple risky assets can have negative correlations. Multiple risk risky assets can have ways to offset in different economic environments that reduces the overall overall volatility and improves the overall performance of the portfolio.

Rob Stephens: 21:43

Companies have to think the same way. And what happens though is, let's say I'm, you know, at maybe at a senior level, I do have a portfolio of projects. But if I'm a mid level manager, I may only have one of those projects. And when it starts to go badly, I'm in a a place that's very dangerous from a decision making perspective because I have basically two bad options. One, this project's not going well.

Rob Stephens: 22:05

It's probably it may not you know, we may be losing money or whatever. And for me to end it is a is a loss, and I'm locking in a loss, and it may be seen as a failure. I may be seen as a failure. And so and losses are twice as painful as gains is a major, major finding of behavioral finance. And so I could do that, or I could let it run.

Rob Stephens: 22:26

You know? I could let it like a like a rogue trader almost, and let it run. And and Hirsch Shefrin, he has a great book, on behavioral corporate finance, and it tackles it more with studies and from an academic, perspective. There's a ton of great information. And he asked, though, a very, very difficult question is, do I care more about the project than I care about the performance of the company?

Rob Stephens: 22:46

And really what I'm saying I mean, it takes a ton of humility and honesty to answer that question. And so do you know? And to realize that when someone's in a bad situation like that, they're gonna make bad decisions. Usually, they're gonna take on a ton more risk and cause a ton more losses. And they're looking at the sunk costs, which we we've we've been told even before behavioral finance was all the buzz in finance, that sunk cost, we can't consider the pot cost we made in the past.

Rob Stephens: 23:10

We can only do analysis on going forward. Are the revenues in the future gonna be better than the gains? And a lot of times, companies will do that analysis at the beginning of a project, but not during a project. Maybe at key points, they might some people use gates and things like that to analysis. But or even if someone comes in, you have to ask yourself every now and then, if I were to come into this company, would I have bought this unit?

Rob Stephens: 23:34

Would I have done this project? And really to look forward on the profitability of these things. And once again, we have to admit there are mistakes in the past and not allow ourselves to double down on them and just waste more and more money after that and throw more money down the hole. So those are the pieces that have to come together to to we have all these things coming together that we've talked about. We've got overconfidence.

Rob Stephens: 23:57

We've got the confirmation bias kicking in. We have we're gamblers in the face of losing choices or gamblers in the face of losses, and, got all these sunk costs that are doing things, that cause us to distract us from the true economics of the situation, and and it's just a recipe for disaster.

Adam Larson: 24:18

It really does sound like a recipe for disaster, and I I feel like there's a level of emotional intelligence that's required to really be effective in behavioral finance.

Rob Stephens: 24:26

Yes. There is. And and that's where we have to help each other out. Once again, that it's hard for us to see when we are in these areas that are causing us a tougher time to make good decisions. Like I said, if I'm if I'm that manager of a a project you know, a lot of times, projects are picked off of median expected value or something like that.

Rob Stephens: 24:49

But, the joke is is you gave me something with a p 50, a probability a 50% probability of this sort of outcome, but you have a p 90 expectation, meaning you you have this huge expectation that it's really gonna come out profitability wise. But remember, we did all that analysis to show there could be all sorts of outcomes to these things, and a lot of those outcomes have nothing to to do with the decision at the time. And so one way we can go back is we can say, what did we know when we make that decision, when we all made that decision? And that's, know, so many times people skip over the assumptions of an analysis, but that's really the the the context with when that decision was made, and that's really the context with which that decision has to be evaluated. Not by the outcomes, but what did we know at the time?

Rob Stephens: 25:31

Because there's another bias called hindsight bias or, which is also called the I knew it all along bias, which is, you know, people go look at the outcomes and say, of course, that was a stupid idea. You know, how could you be so stupid? Those sorts of things. And it's like, we're in it together. We were all and that's where a management team can say, hey, we were all in the room here together, and, we made this decision.

Rob Stephens: 25:49

We have to own it. These were the assumptions. We're not clairvoyant. But from a preventative standpoint, you need that awareness in the room to say, woah. Woah.

Rob Stephens: 25:57

Woah. We need to slow down. Woah. Woah. Woah.

Rob Stephens: 25:59

We need to bring in the outside voices, conflicting things. And so, it's that's the awareness piece of it too that, like you said, an emotional intelligence piece of it. And you could talk about it in emotional intelligence, but it's just good decision making process. It's just good decision management, and it's just pure good management.

Adam Larson: 26:16

Yeah. It really is. And I like that, the hindsight bias. It's it's something that I think we all struggle with. It's like, of course, I knew that, but if you asked me at that time, we didn't know it.

Adam Larson: 26:25

And I that's a that again goes back to the humility of being able to recognize that big time.

Rob Stephens: 26:29

One of my favorite stories on the hindsight bias comes from personal financial planning, actually. And there's an adviser. And because advisers, doctors, they're much more prone to the, hindsight bias, anytime you're an agent for someone. And so, so that's why doctors will do tons of tests and do too many testings because they're trying to protect themselves from these negative outcomes. And, so, you know, I I well, once again, I was a CFO of a medical clinic system too, and I've audited investment or, insurance companies.

Rob Stephens: 26:59

And so, I guess, another area that really gets to me is this waste because of of, trying to protect yourself from the hines hindsight bias. But my my favorite example of how this adviser protects themselves is at the beginning of the year, they have the client say, okay. Where do you think the economy is gonna be? Know, rates or so. You know?

Rob Stephens: 27:18

And so instead of the adviser saying, okay. Let's talk about how your what your allocations are and your risk levels, and then a year later, come back, and if things went bad, the client says, you're such an idiot. Everyone knew. Then the adviser can pull out and say, well, you know, you thought that, the world was gonna go this way and it didn't either. And so it kind of puts everyone on the same page of, we, you know, we can't shoot each other when we we were all at the same place and at the same time.

Rob Stephens: 27:41

And so it's it's a way to to create to force that honesty.

Adam Larson: 27:46

Yeah. I like that. That's a that's a really good example. So, you know, we've covered a lot of things today. You know, if somebody wants to go and more find more information about behavioral behavioral finance, Obviously, they could go see you at your college and and take your class, but not everybody is able to do that.

Adam Larson: 28:04

Where where else can they go to kinda find more information? I know you mentioned a book earlier,

Rob Stephens: 28:08

a couple of books earlier. Right. I think there are a few good options. One is anyone can take my course through IMA. And so, you know, thank you for hosting my courses, and and I have a behavioral finance course in IMA.

Rob Stephens: 28:20

You know, I was shocked when I released that course to CPE sites. I I teach it at Gonzaga, and and it's gotten great reception there, but it gets the greatest reviews from CPAs who you would think would be the you know, who who get a lot of flack or from CMAs who who get a lot of flack for maybe not being high on the emotional intelligence spectrum, but they love it. They love this topic. It is so applicable. It's so practical.

Rob Stephens: 28:45

So you could do that and take the course. I mentioned two books along the way that that are exceptional and are very, very accessible. And that's the first is Olivier Sibonis' book, You're About to Make a Terrible Mistake. Just an absolutely great book about applying in very practical ways of behavioral finance to corporate finance and corporate decision making. What I love about the book is he really respects these decision makers and understands that they're doing the best they can.

Rob Stephens: 29:11

They're not idiots. It's easy to think, oh, these were just crazy people making bad decisions in these companies. No. They're very smart people, very good business people, and they're just human like the rest of us, and that just points that we're all we're all prone to these mistakes. The the the third option would be Hirsch Sheffern's book, Behavioral Corporate Finance.

Rob Stephens: 29:30

That's actually built for teaching the classes. It's a bit more of an academic, but it's tons of great studies and tons of great application to business finance, and particularly to corporate finance in the, you know, like debt and equity issuance, CapEx sort of things, and lots of great information there too.

Adam Larson: 29:47

Alright. Well, look for links to all those in the show notes for today's show. And Rob, we thank you so much for coming on the podcast today. Thank you, Adam.

Announcer: 29:57

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