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More than just a Finance Book
on June 18, 2012
This is another of those serendipitous finds, while browsing in the bookstore, that was very readable and instructive. Both because I work in finance (ex-investment banker) and from a martial arts / sports / health perspective there is a lot of material here that expanded my thinking.
The subtitle for the book is called "Risk Taking, Gut Feelings and the Biology of Boom and Bust" and it is by the neuro-scientist and former Wall Street Trader John Coates. In order to piggy back on the seemingly insatiable demand for books on the credit crisis of 2008, most reviews and editorials in major magazines have focused upon the risk taking side of the book and how pressures of trading can change the biological composition of your body, impacting your appetite for risk (success builds a feeling of overconfidence and a greater appetite for risk) thus having the potential to cause booms and busts in stock markets and the broader economy. A substantial part (but not overwhelming) of the book is about finance and trading and author uses a trio of fictional fixed income (bond) traders during the 2008 crisis to illustrate his points, and this keeps the text from becoming too academic or dry.
But what also interested me was the more general topic on how humans are not disembodied brains who make rational decisions, but that our thinking is very much impacted by our body and our senses. There is a lot of analysis here on how the brain regions processing our reasoning skills are intricately tangled up with our motor circuits and are intimately linked to movement. There is also a whole level of activity where there is a feedback loop between our hormones and our thinking, and a lot of this is on a pre-conscious level. Reading the book helps explain gut instincts, and how during the most powerful moments of your life - satisfying moments of flow, of insight, of love and traumatic moments of fear anger and stress- you lose any feeling of the split between mind and body and the two merge as one.
From the perspective of someone who is interested in alternative health and martial arts, there is information here on how humans differ from other animals in that they can learn complex movements which are not instinctual, such as dance, music and martial arts and how these movements are stored in different parts of the brain as we train then to an instinctual level. On how the best traders, who have the quickest perceptions and best "gut feeling" usually are physically quite well developed as the two are intimately linked, with many ex-olympians and jocks on the trading floor. On how winning can influence our testosterone levels and higher testosterone levels prime our bodies to keep winning and this matters in sports (and by extension in one-on-one combat) as well as on the trading floor. On how we can train and improve our sensitivity to what is going on internally in our bodies, to better understand what is going in terms of our stress levels and how it affects our thinking. And also many health tips on managing stress (including the importance of cold water baths and showers), and how small amounts of stress and challenge are actually good for us and our health.
The title of the book comes from the following:
[The hour] between dog and wolf, that is, dusk, when the two cannot be distinguished from each other, suggests a lot of other things besides the time of day ... the hour in which ... every being becomes his own shadow, and thus something other than himself. The hour of metamorphoses, when the people half hope, half fear that a dog will become a wolf. The hour that comes to us from at least as far back as the Middle Ages, when country people believed that the transformation might happen at any moment.
- Jean Genet Prisoner of Love
In summary there is a lot in this book beyond the title and would recommend it to anyone with an interest in science, especially the functioning of the brain and the mind, as well as exercise and health.