I guess those normal game playing investors are some crazy folk with bumps in their head...not you Thunderdog...
On Bloomberg - psychopaths make best traders
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LOL.Quote from ElectricSavant:
Thanks Equalizer..I thought I was crazy
Actually, if one ever studies the personality disorder section of any decent Clinical Psychiatry textbook - he or she will very quickly experience the hypochondria experienced by all students of medical science worldwide. You start to diagnose yourself!
The thing is everyone who is considered "normal" is bound to have certain traits that belong to various disorders. It is when a certain count is exceeded that one is said to have the actual disorder. For example, take the pain-in-the-butt-to-treat BPD. The patient must present at least 5 of the traits, and it takes a clinician at least two days before being able to confirm the diagnosis.
Many computer geeks for example, present with quite a number of the Schizoid traits, but do not necessarily have the disorder.
The longer this story does the rounds, the more sensational it gets. The original research was simply pointing out a biological example of emotions getting in the way of making good trading decisions and wasn't about psychopaths.
An old and wincingly funny image is hopefully attached which illustrates how most traders react. A variation still available online is http://members.fortunecity.com/wavetrader/sitebuildercontent/sitebuilderpictures/tradermindy.gif
Part of a nearly two month old variation of the story puts the case better:
http://biz.yahoo.com/ts/050729/10235402.html
Apprenticed Investor: Curb Your Enthusiasm
Friday July 29, 7:06 am ET
By Barry Ritholtz, RealMoney.com Contributor
Want to become a better investor?
Get brain damage.
That's the finding of a rather unusual study
www.cmu.edu/PR/releases05/050721_emotions.html by researchers from Carnegie Mellon University, the Stanford Graduate School of Business and the University of Iowa. It was published in Psychological Science in June, and its conclusions were reported in The Wall Street Journal last week.
But don't start playing football without a helmet just yet: It's not any type of brain damage that helped investors in the study, but rather, a very specific form: a site-specific lesion (a kind of tissue damage) in the region of the brain in charge of controlling emotions.
The investors who have these lesions are unable to experience fear or anxiety. It turns out that lacking the emotionality ordinary investors exhibit leads to better investment decisions. It is not at all surprising that the emotionally limited investors outperformed their peers. We know from experience that when investors allow their emotions to unduly influence them, they tend to make foolish -- and expensive -- decisions.
It was not simply a lack of emotions that caused the improvement in performance in the study. When presented with a high risk, higher return possibility, the participants with these site-specific lesions lacked the fear the other investors had. The more emotional participants failed to capitalize on these opportunities. In other words, they were greedy at the right time. That accounted for nearly al the difference in their performances.
But the basic lesson from the study is simple: Investors who learn how their emotions impact their investing -- and can get them under control -- stand to significantly improve their returns. ..........................
An old and wincingly funny image is hopefully attached which illustrates how most traders react. A variation still available online is http://members.fortunecity.com/wavetrader/sitebuildercontent/sitebuilderpictures/tradermindy.gif
Part of a nearly two month old variation of the story puts the case better:
http://biz.yahoo.com/ts/050729/10235402.html
Apprenticed Investor: Curb Your Enthusiasm
Friday July 29, 7:06 am ET
By Barry Ritholtz, RealMoney.com Contributor
Want to become a better investor?
Get brain damage.
That's the finding of a rather unusual study
www.cmu.edu/PR/releases05/050721_emotions.html by researchers from Carnegie Mellon University, the Stanford Graduate School of Business and the University of Iowa. It was published in Psychological Science in June, and its conclusions were reported in The Wall Street Journal last week.
But don't start playing football without a helmet just yet: It's not any type of brain damage that helped investors in the study, but rather, a very specific form: a site-specific lesion (a kind of tissue damage) in the region of the brain in charge of controlling emotions.
The investors who have these lesions are unable to experience fear or anxiety. It turns out that lacking the emotionality ordinary investors exhibit leads to better investment decisions. It is not at all surprising that the emotionally limited investors outperformed their peers. We know from experience that when investors allow their emotions to unduly influence them, they tend to make foolish -- and expensive -- decisions.
It was not simply a lack of emotions that caused the improvement in performance in the study. When presented with a high risk, higher return possibility, the participants with these site-specific lesions lacked the fear the other investors had. The more emotional participants failed to capitalize on these opportunities. In other words, they were greedy at the right time. That accounted for nearly al the difference in their performances.
But the basic lesson from the study is simple: Investors who learn how their emotions impact their investing -- and can get them under control -- stand to significantly improve their returns. ..........................
Here is the Times story.