I’m pushing sixty, so whatever I say you can take with a grain of salt, but there are areas of our education which are locked into knowledge that was, (not,) knowing high school, ten years old at the time it was taught, that forty years later is what we still base our opinions and assertions on.
Part of the problem is that we tend to view financial risk taking as a purely intellectual activity. But this view is incomplete. Risk is more than an intellectual puzzle — it is a profoundly physical experience, and it involves your body. Risk by its very nature threatens to hurt you, so when confronted by it your body and brain, under the influence of the stress response, unite as a single functioning unit. This occurs in athletes and soldiers, and it occurs as well in traders and people investing from home. The state of your body predicts your appetite for financial risk just as it predicts an athlete’s performance.
If we understand how a person’s body influences risk taking, we can learn how to better manage risk takers. We can also recognize that mistakes governments have made have contributed to excessive risk taking.
This is a variation of the “You’re Not So Smart” meme, and books, which focuses on the empirical and emotional minds, and for an old duffer, a trove of new information and insights with cites of the research backing up the assertions. It really is an eye opener for those of us that find the subject matter itself less than enthralling. But I think if you don’t know the information presented therein you are opening yourself up to being the patsy of everyone from retail operators, politicians, Wall Street jackals and car salesmen.
You can’t say you weren’t forewarned now either.
I think a lot of people will probably put the book down as soon as it starts hitting too close to home, physician cure thy self was my initial reaction, since I have always thought in the back of my mind that the science of the mind was conducted by people who had need of it in their own lives, so I was above all of that. Heh. Which reminds me of that other title, “Everything You Know Is Wrong.”
The point is that even if you are above reading this stuff, the manipulators, social engineers and rip offs are not, and they will use it against you.