"Homo economicus" and its consequences

In 1951 the US scientists Harry Markowitz presented the "portfolio theory", which based on the assumption of a "rational investor". Later it was developed to "capital asset pricing model" by William F. Sharpe and at least to the "ABT arbitrage pricing model" by Ross/Fama.

These 3 theoretical approaches are determining the behavioral expectations of the banks, insurance companies and regulatory authorities in the financial markets till this dates.

Empirical studies and the realities have shown that no added value compared to establishing benchmarks would be generated.

"Theory of the emotional added value"

basing of the  “expected utility theory” by Muth (1942/61), already in 1992 the US psychologist "Dr. Daniel Kahneman" had developed the "Prospect Theory" in 1992.

It is based on the changing expectations of the investors and a decreasing marginal value expectations. The rational investors wouldn't be in focus anymore, but the anxiety based an investment decision. The Scientist area of the "Behavioral Finance" was born.

After 10 years of research Kahneman finally received "Nobel Prize for Economics" in 2002. Only a few professionals in Europe have the derived insights into effective trading systems or risk management systems implemented.

The HJB Consulting started in 1992 with the study of the determination of  "bubble" and "crash". Since 1999 it is offering  a successful and risk adjusted control instrument for companies and financial investors, for example, a successful strategy in the Overlay-Risk-Management for currency positions in USD/DEM (until 2002) and USD/EUR on the basis of CFC (Currency Forward Contracts).