A Guy Thing?
Sunday’s NYTimes included an article about the study done by John Coates at Cambridge – you know – the one that talked about hormones – particularly testosterone fueling male traders to take more risks and cortisol to show up when traders are losing money.
I don’t know about the experimental design as I am being an impatient trader and not actually going to the original but it seems intuitively reasonable.
So, the question becomes – as we wrote about awhile ago – what can anyone do about their hormones? I mean I don’t see the alpha males who are pursuing alpha returns taking estrogen shots or anything. (Well maybe some of them… there was after all that weird story about the manager at SAC capital but … I digress…)
On the other hand what do hormones do to us on a conscious level? They make us FEEL a certain way … right?
This means the window of opportunity lies in “feeling analytics” … Think of it this way, you can be purely self-absorbed because one of your best risk-management tools is an ever-increasing level of awareness regarding your own emotional state.
Feeling invincible? …. Call your younger brother and challenge him to a game of tennis.
Feeling infuriated? …. Get to the gym and punch that bag.
After you get used to keeping track of your psyche in this manner (after all if you are male and even some females, you were taught to do precisely the opposite)? – you will find that your percentage of profitable decisions goes up.
No hormone shots required.
Thanks Dr. Tidwell. In our world we still look at things through the experience of what we feel. So… if we feel depressed, while of course there is a neurochemical basis of that, there is also the feelings we experience. It can be effective to work with the feeling – admit to being depressed, research the source (i.e. what perception or event seems to exacerbate it). I LOVE the neuroscience but on a practical level, I always want to work with the emotional experience to investigate the possibility of improving the amount of Psych Cap a trader is working with.
Remember that the slow down of testosterone leads to a tendency toward depression. Depression can bring out “losing” tendencies. I suppose that too much testosterone can lead to fearlessness.