Ge Weidong, a futures tycoon, once posted a Weibo, which was reprinted countless times in the investment circle.
This Weibo is as follows:
Indeed, if the investment world is compared to the universe, then this universe is multidimensional. Facts and figures are one dimension, emotions and dreams are another. The former is an external objective, while the latter is about ourselves.
Futures boss Ge Weidong
The book "Adventure and Intuition" attempts to study the secrets of human emotional changes and financial market fluctuations from a physiological perspective.
The author, John Coates, was originally a successful Wall Street trader who became a behavioral neuroscientist because of his interest in how physiology affects human behavior (the channel switching is so smooth...). In this book, he reveals the physiological mystery of economic prosperity and depression, tells us how risk-taking behavior changes the chemical reaction in the body, thus pushing us to the peak of joy and the abyss of despair, and also makes the market up and down like a roller coaster.
your body doesn't lie
This book starts from the perspective of physiology. There are many professional terms and terms. Here, Mr. Tiger introduces them one by one, which can be roughly summarized as follows:
When you take a risk, your body responds in the first instance because taking a risk can hurt you. Racing on rugged mountain roads, surfing in monstrous waves, and freehand rock climbing on steep cliffs all risk injury or even death. Risk makes the brain sharper, and the body will secrete various hormones and make various adjustments to prepare for the corresponding "fight or flight" physiological response.
In fact, the body is very sensitive to taking risks. Even when there is no immediate threat of death, the body responds.
One type of non-lethal threat is various sports competitions. Winston Churchill lived through the worst of wars, yet he could still feel his body respond to non-lethal threats. Recalling his early life, he once described a polo match in South India that went to a tiebreaker. Churchill recalled: I have never seen the expressions on the faces of the players on both sides so tense and dignified. You can't imagine that this is just a game, and you think it is a test of life and death. Even a more serious crisis will not produce such a strong reaction emotion.
Another non-lethal threat is financial risk, which can also cause strong emotional and physical responses.
As we all know, money plays an important role in our lives. In the long evolutionary history of human beings, money is like a powerful token, which brings risks and opportunities to human beings. The winning or losing of investment will stimulate human beings. , This psychological reaction has existed since ancient times.
In some ways, financial risk is even more destructive than physical risk. Changes in income or social status have long-lasting effects, so when we take a risky bet in the financial markets, the resulting physiological storm can linger for months or even years. But humans are not very good at dealing with such long-term physiological storms. Our defense response will be turned on in times of crisis, and then shut down after minutes, hours, and at most days. But the skyrocketing, plummeting, or continuous winning and losing of money in the financial market will change us like Dr. Avatar beyond recognition.
If we win money, we are often ecstatic, our risk appetite increases greatly, and we become manic, reckless, and arrogant; Staying in the bloodstream for too long leaves us depressed, depressed, deeply risk-averse, and suffering from viral infections, high blood pressure, fat accumulation, and stomach ulcers. Taking a financial risk has about the same physical response as subduing a grizzly bear.
Traditional economics holds that the assessment of financial risk is a purely intellectual exercise of rationality—computing asset returns, probabilities, and optimal allocations of capital. But in recent years, research in neuroscience and physiology has shown that when we face risk, including financial risk, we not only think, but also physically prepare for the risk. The body will turn on the physiological circuits in the state of crisis, and the resulting increased chemical reactions in the body will have an impact on the way the brain thinks. In this way, body and brain become a unified whole in the face of threat.
Under normal circumstances, the connection between the brain and the body gives us the keen intuition and quick reflexes that allow us to successfully face risks. But in some cases, chemistry can eat us up. When traders and investors get caught up in the chemical reaction, they generate irrational joy and sorrow, destabilizing financial markets and making already fragile economies worse.
How to Improve Physical Resilience and Control Your Inner Emotions
Chronic stress responses have enormously negative consequences for personal health and financial stability. A series of studies has shown us that the essence of stress is to prepare the body for action. So, is it possible to use physical training to make the body more resilient and better able to cope with the exhaustion, anxiety and mental illness brought on by chronic stress?
One of the answers given by the author: exercise!
Mr. Tiger once wrote an article "2016, move! move! ", mentioning that exercise can help the brain change at three levels: first, improve the thinking mode to improve alertness, attention and drive; the cellular basis; finally, exercise stimulates stem cells in the learning part of the brain to differentiate into new nerve cells.
At the same time, in addition to promoting the redevelopment of the brain, exercise can also relieve mood, anxiety, prevent stress, improve concentration, and reverse the effects of certain aging factors in the brain.
indeed so. John Coates' research also found that the most experienced and profitable traders have physiological indicators very similar to elite athletes. So we can also see that there are many excellent investors on Wall Street, either they are very strong, or they are sports graduates.
The author also mentioned that the body can be calmed by controlling the breathing. Neuroscientist Rhett Montagu found that people who practice Buddhist meditation have more accurate intuition and make more rational financial decisions.
a few interesting points
Through a series of experiments, the authors found a feedback mechanism between testosterone and success, which greatly reduces the fear of risk in men, especially young men, but has little effect on women. Likewise, major failures can lead to a spike in cortisol, which acts inversely to testosterone and can drastically reduce a man's appetite for risk. The authors argue that "testosterone diversification," or hiring more women, can help improve traders' overall performance, since women's testosterone levels are only 10 to 20 percent of men's.
He also recommends hiring more middle-aged traders, since testosterone levels drop significantly after middle age.
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