UC Berkeley Haas School of Business Fisher Investments

UGBA 137 Case Study # 5 – Tony Stark's Debt Worries

Tony Stark is your ultra high net worth client. He's happy with your investment strategy, but is worried about the near future. He keeps calling you, insisting the US debt level is going to bring the global stock market down for good this year, citing the “unsustainable trillions and trillions” of dollars in debt the US holds.

  1. Explain to Tony, in terms a non-professional investor can understand, why he might be wrong about US debt levels, using the “scaling” technique.
  2. What other cognitive biases might Tony be suffering from? Explain.