Wall Street's Biggest Problem Could Be High Testosterone
Author Kabir Sehgal discusses several reasons why Wall Street investors make irrational decisions that lead to market instability.
Kabir Sehgal was a vice president in emerging market equities at J. P. Morgan in New York. He serves as an officer in the United States Navy Reserve, served as a speechwriter on a presidential campaign, and is a term member of the Council on Foreign Relations. He is the New York Times bestselling author of books including Coined, Walk in My Shoes (with Andrew Young), A Bucket of Blessings, and Jazzocracy. A Grammy-winning producer who has performed with Grammy-winning musicians as a jazz bassist, he co-founded an arts organization which merged with the Afro Latin Jazz Alliance. Sehgal is a graduate of Dartmouth College and the London School of Economics.
Kabir Sehgal: It is true that on Wall Street and among traders there's a lot of endorphins being produced. In fact they've studied traders in the London Stock Market, London traders, and they found that, sure enough, that those who take on significant risk may have increased levels of testosterone. They found a correlation between those with high testosterone and high risk-taking. And also causation, some studies showed that if they take nasal spray of testosterone, you're more likely to take financial risks. So it's not just in Wall Street; it's also in a lot of financial decisions when you're in a casino. Those who have the certain chemicals are more likely to take certain financial decisions.
The most important thing about an investor is someone who can detach themselves from irrational activity. For example, one investor who I know went to Japan recently and looked at all kinds of banks and met companies and tried to figure out what should he invest in Japan. But when he came home to America, he decided he was not going to invest in Japan for three to six months. And why is that? Because he felt that he may be subject to the availability bias. Meaning that the more likely you can recall something, the more familiar you are with something, the more likely you're going to invest in it. That's why people play the lottery. My dad plays the lottery every single week and I ask him, "Dad why do you play the lottery?" He says, "Well, I see people winning the lottery on the news. I may win it." I said, "Well, you're not seeing the hundreds of thousands of people that are losing." So, professional investors can create checklist to start rooting out their bias, whether it's things that they can easily remember or things that they're familiar with and they can check themselves to make sure that they're not making irrational financial decisions.
Markets are very volatile when they're going down. It's because it encourages irrational activity. When you're losing money, some traders try to double their bets to try to make up their losses so they don't realize losses; they want to keep on doubling down, doubling down. That's why you have these incredible trading losses because some traders are just loose cannons and they don't want to lose money; they want to make money so they keep on making irrational financial decisions. And that's why when the stock market gradually goes up and then it plummets when it goes down.
Could hormones be blamed for a stock market crash? What drives investors to make irrational decisions? Kabir Sehgal, author of the book Coined: The Rich Life of Money and How Its History Has Shaped Us, discusses several variables that lead to poor money management and, ultimately, to market risk. For example, research suggests a link between risky financial decisions and elevated testosterone levels. Beyond body chemistry and endorphins, certain logical biases and fallacious thinking could also endanger a portfolio. Take for example the availability bias, which describes situations in which the more likely you can recall something, the more likely you're going to invest in it. Sehgal explains that investors need to fight against subconscious urges to make irrational decisions.
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Whether or not women think beards are sexy has to do with "moral disgust"
- A new study found that women perceive men with facial hair to be more attractive as well as physically and socially dominant.
- Women tend to associate more masculine faces with physical strength, social assertiveness, and formidability.
- Women who display higher levels of "moral disgust," or feelings of repugnance toward taboo behaviors, are more likely to prefer hairy faces.
Beards and perceptions of masculinity<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjU5OTg0MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0NzkxMjM3N30.cH-GqNwP5GVqvstgJWAhBPn1B_lYpVEAI0I7iax7EQw/img.jpg?width=1245&coordinates=0%2C1900%2C0%2C849&height=700" id="caae6" class="rm-shortcode" data-rm-shortcode-id="cb0a355a4e8e1899789bc45f3f7aef56" data-rm-shortcode-name="rebelmouse-image" />
Photo Credit: Wikimedia<p>The study used 919 American (mostly white) women ages 18-70 who rated 30 pictures of men they were shown with various stages of facial hair growth. The photographs depicted men with faces that had been digitally altered to look more feminine or more masculine, with a beard and without a beard. The women rated the men according to perceived attractiveness for long-term and short-term relationships. The study found that the more facial hair the men had, the higher the men were rated on their attractiveness, particularly for their suitability for a long-term relationship.</p><p>Part of this might be attributed to facial masculinity — i.e. protruding brow ridge, wide cheekbones, thick jawline, and deeply set narrow eyes — which conveys information to a woman about a man's underlying health and formidability. Women tend to associate more masculine faces with physical strength and social assertiveness. It can also indicate a man with a superior immune response. The researchers suggested that their findings favoring bearded men could be due to the fact that facial hair enhances the masculine facial features on a man's face, like creating the illusion of a thicker jaw line. This could communicate direct benefits to women like resources and protection that would enhance survival among mothers and their infants. In other words, while a beard doesn't mean superior genetics in and of itself, it might be a primitive, ornamental way of saying, "Hey girl, I'm a testosterone-fueled lean, mean, pathogen fighting machine." <br></p><p>It could also be that a beard becomes its own destiny. The researchers in this study cite prior research that found that by growing a beard, men felt more masculine and had higher levels of serum testosterone, which was linked to a higher level of social dominance. They also tended to subscribe to more old-school beliefs about gender roles in their relationships with women as compared to men with clean-shaven faces.<span></span><br></p>
What does disgust have to do with beard preference?<p>Obviously, not all women dig beards. The researchers were particularly interested in what traits make a women prefer bearded men over clean-shaven faces. They looked into several factors including a woman's disgust levels on various concepts, her desire to become pregnant, and her exposure to facial hair in her personal life. </p><p>According to the study, women who were not into facial hair were turned-off by potential parasites or other critters they imagined could be in the hair or skin. Women ranking high on this "ectoparasite disgust" scale might have viewed beards as a sign of poor grooming habits. However, women who ranked higher in levels of "pathogen" did find the bearded men to be desirable, possibly because they perceived beards as a signal of good health and immune function. An intriguing discovery in the study was links to morality. Women who displayed higher levels of "moral disgust," or feelings of repugnance toward taboo behaviors, were more likely to prefer hairy faces. The authors opined that this could reflect a link between beardedness, politically conservative outlooks, and traditional views regarding performances of masculinity in heterosexual relationships.</p>
Additional findings<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjU5OTg1My9vcmlnaW4uZ2lmIiwiZXhwaXJlc19hdCI6MTYyNDI1NjUyOX0.P9B8WbmJR0q4nfzYZKbuNSA-2SAigVWJgrQE-_Gxlds/img.gif?width=980" id="49143" class="rm-shortcode" data-rm-shortcode-id="2ed3b1d6f20fc170bf2974646e565e8d" data-rm-shortcode-name="rebelmouse-image" />Giphy<p>The correlations that existed between married and single women's rating on the attractiveness of beards were not particularly clear, although the researchers noted that single and married women who wanted children tended to find beards more attractive than the women who didn't want children. They also found that women with bearded husbands found beards to be more attractive, which might indicate that social exposure to beards influences how desirable they are perceived of as being. Or it could be that men with wives who like beards grow beards.</p><p>It's important to note that culture plays a huge role in how attractive women perceive certain male characteristics as being. This study looked at a small, culturally specific group of American women, so no big, universal claims should be made about masculinity, facial hair, and male desirability to women. However, research like this is important in highlighting how human grooming decisions are driven by much more than fashion trends. Sociobiological, economic, and ecological factors all play a part in the way we choose to present ourselves.</p>
Yet 80 percent of respondents want to reduce their risk of dementia.
- A new MDVIP/Ipsos survey found that only 35 percent of Americans know the symptoms of Alzheimer's disease.
- Eighty percent of respondents said they want to reduce their risks.
- An estimated 7.1 million Americans over the age of 65 will suffer from Alzheimer's by 2025.
Credit: logika600 / Shutterstock<p>Remaining healthy requires regular screenings. Here again we see a disassociation between risk reduction and proactivity. Seventy-seven percent of respondents don't talk to their doctors about lifestyle habits that support brain health; 51 percent have never been screened for depression; 44 percent have never had a neurological exam; and 32 percent have never been screened for hearing problems. </p><p>Common early warning signs of dementia, <a href="https://news.yahoo.com/americans-worry-alzheimers-disease-survey-140644803.html" target="_blank" rel="noopener noreferrer">according to</a> Dr. Jason Karlawish, co-director of the Penn Memory Center, include repetitive questions and stories, difficulties with complex daily tasks, and trouble with orientation. </p><p>In terms of intervention, <a href="https://bigthink.com/21st-century-spirituality/does-lack-of-exercise-lead-to-dementia" target="_self">exercise</a>, <a href="https://bigthink.com/surprising-science/obesity-dementia" target="_self">diet</a>, building a <a href="https://bigthink.com/mind-brain/brain-reserve" target="_self">brain reserve</a>, and challenging your brain (such as learning a new language or musical instrument) are all proven methods for staving off the ravages of Alzheimer's. Oxytocin has also <a href="https://bigthink.com/mind-brain/alzheimers-oxytocin" target="_self">showed promise</a> in brain-addled mice, while researchers found positive results for a <a href="https://bigthink.com/mind-brain/intermittent-fasting" target="_self">group of intermittent fasters</a> in promoting neurogenesis. </p><p>Epidemiologist Bryan James says that dementia is <a href="https://www.npr.org/sections/health-shots/2013/04/15/176920391/how-exercise-and-other-activities-beat-back-dementia" target="_blank">not an inevitable result</a> of aging. </p><p style="margin-left: 20px;">"It's simply not pre-destined for all human beings. Lots of people live into their 90s and even 100s with no symptoms of dementia." </p><p>Professor of neurology at Boston University School of Medicine, Andrew Budson, <a href="https://news.yahoo.com/americans-worry-alzheimers-disease-survey-140644803.html" target="_blank" rel="noopener noreferrer">recommends</a> aerobic exercise and the Mediterranean diet. As has long been known, whole grains, fruits and vegetables, fish and shellfish, and healthy fasts like nuts and olive oil seem to have brain-boosting properties. </p><p>To learn more, take the <a href="https://www.mdvip.com/brain-health-iq-quiz" target="_blank">Brain Health IQ quiz</a>.</p><p><span></span>--</p><p><em>Stay in touch with Derek on <a href="http://www.twitter.com/derekberes" target="_blank">Twitter</a>, <a href="https://www.facebook.com/DerekBeresdotcom" target="_blank">Facebook</a> and <a href="https://derekberes.substack.com/" target="_blank" rel="noopener noreferrer">Substack</a>. His next book is</em> "<em>Hero's Dose: The Case For Psychedelics in Ritual and Therapy."</em></p>