Here’s a bit of news that’s sure to inspire some uncomfortable jokes on the trading floor: A Cambridge University research team found that stock traders’ performance, and their willingness to take risks, may be partly, well, hormonal.
BBC:
They found that daily testosterone levels were significantly higher on days when traders made more than their average profit.
They ascribe this to the “winner effect”, seen in sportsmen, in which success increases testosterone levels, which in turn increase feelings of confidence and ability to take risks, which then increase the chances of further profits.
However, if repeated too much, they say, the rising testosterone levels could eventually compromise their ability to make rational decisions, as the traders take bigger and bigger risks during so-called “bubbles”, where the market rises sharply.
Prof Joe Herbert, one of the study’s authors, said: “Our work suggests that these decisions may be biased by emotional and hormonal factors that have not so far been considered in any detail.
“Hormones may be important for determining how well an individual trader performs in the stressful and competitive world of the market.”
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By jatihoon, April 15 at 7:33 am #
One should check Bush testosterone level when he took country to war.After the results come out, it should be published and made mandatory for all candidates, running for president office, to go through, “Bush T. Test.” This way country will know to vote or not to vote for a candidate who shows positive “Bush Testosterone level.”
Report thisBy DennisD, April 15 at 6:49 am #
(Unregistered commenter)
It’s great to see that the Cambridge University research team is working on something beneficial to mankind.
Just another example of tax dollars being used responsibly(insert sarcasm here).
Prof. Joe’s use of the words “suggest” and “may” really make the study worthwhile and define the results.
Report thisBy TDoff, April 15 at 12:33 am #
The aroma of urine-soaked undergarments seems to be the determining factor in the stock markets performance of late.
Report thisDeservedly so.
By cyrena, April 14 at 10:45 pm #
I don’t think this is really a new discovery. Maybe the first time anyone has actually ADMITTED it, but it’s definitely been an ‘open secret’ for several centuries.
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