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dhtobey Tobey

dhtobey Tobey's Public Library

  • Finding the reason behind that seemingly irrational sell-off may require more analysis than most economists or stock market watchers can perform. Perhaps the motivations behind our investing decisions are actually a question better put to neuroscience.

     

    “Certainly, economic fundamentals play a valuable role in the value of assets and the prices that things trade for. But when individuals are making buy-and-sell decisions they can be very influenced on what is going on in their brains, including emotions,” says Lisa Kramer, associate professor of finance at the Rotman School of Management at the University of Toronto. Kramer has done extensive research on how human emotion — specifically in relation to seasonal depression — influences financial decisions and financial markets.

  • Kramer explains if one were to do a functional MRI analysis while an investor was in the process of making a financial decision — let’s say whether to buy a stock or a bond — “you’ll find that the part of the brain that’s activated when somebody makes the risky choice is called the nucleus accumbens (NACC) and it’s activated when people are experiencing pleasurable, things like food or sex. The part of the brain that’s activated when people make the safe choice is called the anterior insula and it’s more associated with pain and fear,” she says.
  • Peterson writes in his paper “The Neuroscience of Investing: FMRI of the reward system,” that the brain’s reward system, connected to one of the brain’s five dopamine pathways, coordinates the search for, pursuit and evaluation of potential reward. The activation of this system, when it comes to collective investing, could have broader implications for financial markets and the economy.

  • I suggest using an Inspire/Educate/Reinforce framework to map and deliver messages on an annual basis.
  • Inspire. Messages that inspire are particularly important when you are sharing a significant accomplishment or introducing a new initiative that relates to your strategy. The content should demonstrate progress against goals, showcase benefits to customers, and be presented in a way that gets attention and signals importance. The medium is less important than the impression that you want to leave with employees about the company. Whether you're looking to build optimism, change focus, instill curiosity, or prepare them for future decisions, you'll have more impact if you stir some emotion and create a lasting memory.

  • Serial entrepreneur and Harvard Business School Entrepreneur-in-Residence Eric Ries delivered an insightful and entertaining talk on his Lean Startup methodology at the PARC Forum invited expert speaker series last week. (This is part of the Entrepreneurial Spirit series; you can see the other speakers and videos here.)
  • Don’t let the word “startup” fool you – according to Eric’s definition, a startup is any organization of any size dedicated to creating something new under conditions of uncertainty

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  • In many ways, what makes the Googles of the world exceptional begins in the childhood classroom -- an embrace of creativity, play, and collaboration. It was just one year ago that 1,500 CEOs identified creativity as the number-one leadership competency in our complex global marketplace
  • In looking at various exemplary workplaces such as IDEO, Google, and Pixar, we can glean valuable lessons about effective educational approaches and the spaces that support them.
  • Learning from IDEO: A transparent space where projects take the spotlight

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  • When a small group of Zen monks in California chose to stay and defend their monastery during a wildfire in 2008 -- and then decided again, midway into a final evacuation, by turning around -- I was enthralled. How had they made such a choice, in the heat and tumult of the moment? Did their Zen practice help?
  • "The great way is not difficult," goes one of my favorite teachings, "just avoid picking and choosing."
  • In research for my book "Fire Monks," which describes how residents of Tassajara Zen Mountain Center decided to stay and meet the fire, I discovered that the science of decision making mirrors some core principles of Zen practice. The aim of zazen, or meditation -- if meditation can be said to have a goal -- is to let go, which turns out to be key to decision making, too.

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  • GLINTON: Kuhnen says when we hear bad financial news, we become more risk averse. For instance, if the stock market is tanking, we're more likely to buy bonds than stocks, even if that's the wrong thing to do. The way we hear the news affects us also.

  • KUHNEN: When we're presented news in this very emotional way, very bombastic way, it's in our nature to pay more attention to it.
  • GLINTON: Not only do we pay more attention to the emotional bad news but the more recent the news the more it affects our decision-making. Kuhnen says this is not the time to be making financial decisions.

  • Top 25 Psychology Journals and Publications, by Impact Factor

     
     
    If you are interested in reading the most authoritative information, you can read one of these journals, with a high impact factor. Here are the top 25 psychology journals and publications according to JCR Impact Factor:

  • A good weight for ab workouts is a 4 kilogram medicine ball (just shy of 9 pounds). Start with one circuit and build up to three sets of the circuit. Use a slow, controlled movement for the double crunch and reverse crunch.
  • Double Crunch

     

    Starting position: Lie on your back, with your hips and knees bent as shown and your feet off the floor. Rest your hands lightly on your chest. Position the ball between your knees.

     

    The move: Exhale as you lift your shoulders off the floor and bring your knees toward your chest. Grab the ball with your hands and bring it to your chest as you inhale and

     

    The finish: Return your shoulders and legs to the starting position. Transfer the ball back to your legs on the next repetition, and keep alternating ball positions for the entire set.

            
     
     

    Seated Twist

     

    Starting position: Sit on the floor, your back straight but leaning slightly toward the floor, as if in the "up" position of a situp. Your knees should be bent 90 degrees, your heels about 15 inches apart and resting on the floor.

     

    The move: Hold the ball close to your chest, 2 rotate your torso to the left, and place the ball on the floor behind you. Rotate around to the right, pick up the ball, rotate left, and place it behind you.

     

    The finish: Repeat eight to 12 times, then do eight to 12 more starting with a rotation to your right; that's one set.

     

    Hint: Keep your head in line with your torso throughout the movement. Perform this move as quickly as possible.

            
     
     

    Reverse Crunch with Knee Drops

     

    Starting position: Lie on your back, hands resting on the floor at your sides, hips and knees bent 90 degrees, and feet off the floor. Position the ball between your knees. Keep your lower back on the floor throughout the exercise.

     

    The move: Contract your abdominals and pull your knees to your chest, then return them to the starting position.

     

    The finish: Lower your knees to the left and return to the starting position. Drop your knees to your right on the next repetition, and alternate sides for each rep.

        

  • Researchers discovered that performing pushups as quickly as you can is one of the best ways to build explosive upper-body strength, according to The Journal of Strength and Conditioning Research
    • You won’t be able to maximize your strength if you don’t perform the pushup correctly, though. Here’s the right way to perform the move:

       
         
      1. Get down on all fours and place your hands on the floor so that they’re slightly wider than shoulder-width apart. Straighten your legs with your weight on your toes. Your body should form a straight line from you head to your ankles.
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      3. Brace your abs and keep them contracted throughout the entire exercise. This keeps your body rigid and doubles as core training.
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      5. Next, lower your body until you chest nearly touches the floor, then push yourself back up to the starting position as quickly as possible. Don’t let your hips sag at any point during the movement.
  • Hartman suggests doing 3 sets of 6 to 8 repetitions at maximum speed, resting 3 to 5 minutes between sets. Increase the number of sets and reps over time. Do this one to two times a week.

  • The bigger picture, however, is still not that encouraging. Even after the recent plunge, stocks are still about 20% overvalued when measured on Professor Robert Shiller's "normalized" earnings--earnings adjusted to normalize profit margins--which is one of the only valuation measures that works.

     

  • Specifically, even after the crash, stocks are still trading at 19X cyclically adjusted earnings. As we can see in the following chart from Professor Shiller, over the past century, stocks have averaged about 16X those earnings. So we're still about 20% above "normal."

     

  • Importantly, though, 19X is a lot closer to normal than the ~24X recent peak. Stocks certainly aren't "cheap," but they're also not wildly overvalued anymore.

     

  • In two studies, students were presented with a conditioning task involving positive or negative images (like puppies and garbage) flashed before pictures of Chinese characters. The characters were totally new and value-neutral for these non-Chinese speaking students. Some characters always followed the cheery puppies and rainbows, while some always appeared after the aversive sewage and spiders. Another set came after a neutral gray square.

     

    After a few viewing cycles, the students simply rated how much they liked or disliked each of the Chinese characters. (They had been told they were participating in a language and memory experiment to avoid muddying the data with political assumptions or overtones.) Both studies showed that the negative images had a stronger effect than positive images for everyone, supporting the robust psychological finding that negatives make a stronger impression than positives (i.e. the snarky evaluations you remember long after the glowing ones have faded).  After the brief viewing, Chinese characters that had appeared after negative images were more disliked than the other Chinese characters, even though participants had no prior experience with them.

  • Most strikingly, both studies showed that this negativity dominance was especially true for conservative students. In other words, those on the political right showed more of a “bad is stronger than good” bias than those on the left. Surprisingly, the political difference wasn’t to be found in the negative images, which had a strong effect on everyone across the board. If you can wrap your mind around psych study jujitsu for a moment: the differences stemmed from participants’ responses to the positive images, which carried more weight with liberal students. For example, if viewing two hypothetical television ads—one featuring an impoverished village in shambles after a failed food distribution program, and one showing clean, happy children after a successful well installation—liberals may be more likely to be convinced of the potential success of future aid programs.

  • the National Science Foundation (NSF) has formed a public-private partnership that will put $5 million toward getting more ideas out of the research phase and launched as successful business startups.
  • The NSF's new Innovation-Corps, or I-Corps, program plans to identify 100 great research-stage ideas in the coming year and give each training, support services, mentoring and $50,000 toward commercialization. The program's goals: turn research into useful technology, encourage better collaboration between academia and industry and provide students more opportunities to learn about business basics.

     

    The training program will be modeled after the groundbreaking Lean LaunchPad course taught for the first time at Stanford last spring. The course emphasized rapid testing of multiple hypotheses about the business using ample market research to find the most viable business model quickly.

  • Imagine you encountered the following text: "Timmy Tucker is a senior politician. Last year Timmy championed human rights, and was fiddling his expenses."
     
     Now compare with this version: "Timmy Tucker is a senior politician. Last year Timmy was championing human rights, and fiddled his expenses."
     
     How does each version affect your view of Timmy Tucker? New findings from Caitlin Fausey and Teenie Matlock suggest that the first version is more likely to damage Timmy's re-election prospects.
  • The researchers found that the imperfect tense (e.g. "was fiddling") exacerbates the effect of a negative claim about a politician, compared with the perfect tense (e.g. "fiddled"). Fausey and Matlock aren't certain why this is, but they think the imperfect tense gives the sense that an action is ongoing, whereas the perfect tense brings closure.
  • For an initial study, 354 participants were split into four groups, with each reading one of four versions of a description of a politician who was up for re-election. Participants who read a version in which the man was described as last year "taking hush money" were more confident that he wouldn't be re-elected and estimated that he'd taken more money, as compared with participants who read a version in which it was written that last year "he took hush money". This subtle change in verb tense made no difference to the verdict of participants who read a positive account of the politician ("was collecting donations" vs. "collected donations").
     
     A second study with a further 127 participants was similar except this time they all read a version that featured both a positive and negative claim about the politician. Those participants who read the description featuring a negative claim in the imperfect tense with the positive claim in the perfect tense ("was removing homes and extended roads") were less likely to say he would be re-elected (40 per cent vs. 56 per cent), compared with those who read the same claims with the tenses the other way around ("removed homes and extending roads")*.

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