Tuesday, September 20, 2005

Emotionless Trading

Sorry, I liked the title Emotionless Trading better than Yahoo's version:
"Psychopaths could be best financial traders?"

Not sure what to say about this one. Just that it goes to show emotions should not play a roll in investment decisions.

Psychopaths to rule fin markets?: "A team of US scientists has found the emotionally impaired are more willing to gamble for high stakes and that people with brain damage may make good financial decisions, the Times newspaper reported Monday.

In a study of investors' behavior 41 people with normal IQs were asked to play a simple investment game. Fifteen of the group had suffered lesions on the areas of the brain that affect emotions.

The result was those with brain damage outperformed those without.

The scientists found emotions led some of the group to avoid risks even when the potential benefits far outweighed the losses, a phenomenon known as myopic loss aversion."

Thanks to Dave and Paul Harvey for pointing this one out to me!

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