Posts Tagged ‘testosterone’

Investors, Embrace Your Feminine Side

Investors, Embrace Your Feminine Side

embrace the feminine sideCourtesy of Tim at The Psy-Fi Blog

Testosterone Is Not Destiny

There’ve been a lot of studies that indicate that women make better investors than men. They’re less inclined to overtrade, which reduces the fees they pay and means they start with an inbuilt advantage. However, there’s not been much analysis of why this behaviour occurs.

For it’s not self-evident that the lack of a pair of testicles should automatically make you a better investor. The pop-psychological view that this is due to surges of testosterone driving risk taking actions by red-blooded alpha males is highly seductive, but also pretty useless. Humans are uniquely evolved to allow us to override the urgings of of our genes, regardless of what sex organs they endow us with.

Cool Female Heads

femalenessHowever, there’s not much doubt that the basic finding – that women are less active traders and produce better returns on average over the long-term – is correct. Odean and Barber showed this in their 2001 study on overconfidence for instance. What’s more interesting, though, is how easily the idea that this is simply due to non-eradicable sex differences is accepted. In fact some observers have gone so far as to suggest that market extremes could be avoided by ensuring more women are present in investment houses – the idea being, presumably, that the cooler headed females will reduce the hot-headed male impulses to trade irrationally.

Like hell. More likely, of course, the presence of additional women would simply stimulate the men into ever more risky trades in feverish attempts to impress them: taking risks may have benefits that don’t translate into pure financial advantage. Meanwhile any women interested enough to get involved in market trading are more likely to do so in order to become rich rather than to act as a self-regulating safety valve for their male colleagues.

Risky Sociobiology

Now before we can investigate this more we need to take a careful look at what causes sex differences. It’s perfectly obvious that our genes have fitted males and females differently for the purposes of reproduction but beyond that it’s surprisingly difficult to definitively tease apart the influences of genes and environment. Even the well known male map reading advantage can be traced to the greater willingness of parents to allow young


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Why did the bankers behave so badly?

Of the three factors outlined, I think the weakest argument is made under the heading "Sexism and the City." Not saying that testosterone plays no role in "poor behavior," I just doubt it played a major role.  It would be interesting to compare the effects of testosterone to other biochemicals acting neurological pathways that appear to affect risk-taking, such as dopamine. – Ilene

Why did the bankers behave so badly?

By Anne Sibert, courtesy of  VoxEU

Greedy bankers are getting most of the blame for the current financial crisis. This column explains bankers did behave badly for mainly three reasons. They committed cognitive errors involving biases towards their own prior beliefs; too many male bankers high on testosterone took too much risk, and a flawed compensation structure rewarded perceived short-term competency rather than long-run results.

Many people share the blame for the current financial crisis; politicians, supervisors, regulators and even imprudent households and businesses. One group, however, has been judged to be especially guilty; the employees in the financial services sector. In response to their perceived greed and bad judgment, the US House of Representatives passed a bill that would effectively confiscate the 2008 bonuses of employees of financial firms receiving significant bailout assistance. In the UK, vandals smashed the windows and trashed the Mercedes of the former head of the Royal Bank of Scotland, while protestors tried to take over a London branch of the bank. In Iceland, financiers have wisely fled the country.

The populist outrage may be excessive, but it is hard to deny that certain aspects of these employees’ conduct were undesirable. Bankers imprudently counted on a continuation of the US housing boom long after most economists predicted its demise; they were overly sanguine about sustainable leverage ratios; managers of insurance companies and pension funds failed to exercise sufficient caution when they purchased collateralised debt obligations and asset-backed securities that they did not understand or know the value of. Since few would characterise the bankers and other employees of financial firms as an unintelligent group, it is interesting to ask why they behaved in such an egregious fashion; I advance three theories.

Humans are prone to cognitive errors

The first explanation is that humans are prone to cognitive errors involving biases towards their own prior beliefs. A vast empirical psychology literature documents that


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Chart School

Price and Volume Swing Analysis on Bitcoin and Silver

Courtesy of Read the Ticker

Many take guidance from news, pundits or advisors. Well sometimes the swings of price and volume are a better measure of what happens next.

The big boys do not accumulate or distribute in single 1 second trade, they build positions over weeks, months and years. They use price swings in the market to build or reduce positions, and you can see their intent by studying swings of price and volume and applying Tim Ord logic as written in his book called 'The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks'.

Tim Ord is a follower of Richard Wyckoff logic, his book has added to the studies of Richard Wyckoff, Richard Ney and Bob Evans.

Richard Wyckoff after years of...

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Phil's Favorites

60/40 is Dead. Again.

 

60/40 is Dead. Again.

Courtesy of 

Doing nothing has been one of the best strategies of the last few decades.

I’m talking about the tried and true 60/40 portfolio. 60% stocks. 40% bonds. You had to rebalance, so not exactly nothing, but as close to it as you can get.

Nothing and easy, however, aren’t the same thing. You had to sit through multiple 50% crashes in the stock market. You had to sit on your hands during periods where “everyone” was getting rich. On the spectrum of easy to impossible, doing “nothing” is closer to the latter.

How many people can stay the course for multiple decades? The investor’s principal challenge is to fight the urge to de-risk in a bear market and add risk in a bul...



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Zero Hedge

Ethereum's Turn To Outshine Bitcoin Is Coming, UBS Says

Courtesy of ZeroHedge View original post here.

After a stellar start to the year, which saw its price soar to an all time high above $4,100, trouncing virtually all of its crypto peers, Ethereum has stagnated in recent weeks, with its place in the spotlight taken by bitcoin whose impressive outperformance has been the result of now confirmed speculation that a bitcoin futures ETF is coming. It also meant that what has traditionally been a close correlation between the two largest cryptos has broken in favor of the larger peer; it would also suggest that ethereum is trading about $1000 cheap vs bitcoin.

...



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Digital Currencies

Ethereum's Turn To Outshine Bitcoin Is Coming, UBS Says

Courtesy of ZeroHedge View original post here.

After a stellar start to the year, which saw its price soar to an all time high above $4,100, trouncing virtually all of its crypto peers, Ethereum has stagnated in recent weeks, with its place in the spotlight taken by bitcoin whose impressive outperformance has been the result of now confirmed speculation that a bitcoin futures ETF is coming. It also meant that what has traditionally been a close correlation between the two largest cryptos has broken in favor of the larger peer; it would also suggest that ethereum is trading about $1000 cheap vs bitcoin.

...



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Politics

Steve Bannon faces criminal charges over Jan. 6 panel snub, setting up a showdown over executive privilege

 

Steve Bannon faces criminal charges over Jan. 6 panel snub, setting up a showdown over executive privilege

Defiant or following Trump’s direction? John Lamparski/NurPhoto via Getty Images

Courtesy of Kirsten Carlson, Wayne State University

The House committee investigating the Jan. 6 attack on the U.S. Capitol is tasked with providing as full an account as possible of the attempted insurrection. But there is a problem: Not everyone is cooperating.

As of Oct. 14, 2021, Steve Bannon, a one-tim...



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Biotech/COVID-19

Ivermectin is a Nobel Prize-winning wonder drug - but not for COVID-19

 

Ivermectin is a Nobel Prize-winning wonder drug – but not for COVID-19

While ivermectin was originally used to treat river blindness, it has also been repurposed to treat other human parasitic infections. ISSOUF SANOGO/AFP via Getty Images

Courtesy of Jeffrey R. Aeschlimann, University of Connecticut

Ivermectin is an over 30-year-old wonder drug that treats life- and sight-threatening parasitic infections. Its lasting influence on global health has been so profound...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.