Michael Covel

Scientists think the new field of neuroeconomics can explain some business behavior, perhaps even distinguish rational from irrational decisions. Are some people’s brains hardwired to run companies or to make deals?

I was in the local Micro Center today buying a keyboard. As I made the purchase the young guy at the counter asked me for my email for my $49 purchase. I said “no” bluntly. I then asked him what percentage of people actually give their email. He livened up and said, “Oh last night we were at 71%.” How did we as a society become so easily manipulated? What are the larger ramifications?

Just how representative are the people who volunteer for psychology experiments? Interesting.

I am not really sure what to make of this. Sure, the cute, try to be funny part is clear, but at the end of the day no one gets ahead regardless of their circumstance by begging and whining.

This passage caught my eye and sarcasm:

That means the FTSE 100 has now fallen by around 10 per cent in the last 10 days, by around 15 per cent over the last month and is well on the way to being off 20 per cent since its most recent high of 6754 in July - before the world’s banking system was sent spiraling. It is also the worst start to the year for the stock market since records began in 1936. “I smell the acrid stench of fear and uncertainty,” said markets commentator David Buik of BGC Partners. European markets also tumbled.

This is such a sad commentary on what we know about money!

A regular reader sent in this article on a study: Believing in an item’s worth makes us cheery - for a short time.

From a news release:

FAIRFIELD, Conn. — A Sacred Heart University Poll found significantly declining percentages of Americans saying they believe all or most of media news reporting. In the current national poll, just 19.6% of those surveyed could say they believe all or most news media reporting. This is down from 27.4% in 2003. Just under one-quarter, 23.9%, in 2007 said they believe little or none of reporting while 55.3% suggested they believe some media news reporting.

Read all.

Shrewd buying helped Jose Mugrabi build the world’s largest private stash of Andy Warhol’s art. And his tale is one that all investors should read.

Hint: Don’t tell your kids that they are. More than three decades of research shows that a focus on effort - not on intelligence or ability - is key to success in school and in life. More.

Malcolm Gladwell is an interesting guy.

From Mark Cuban comes reinforcement for entrepreneurs.

The other day I was forwarded a rant that included this excerpt:

“I drove a Porsche 911 Cabriolet, flew a Beechcraft Baron 58P, lived in a house on the lake in Tahoe that recently was listed for $10 million, had two boats on the lake and a 50 foot yacht in the Caribbean when I was 23 years old. Money, my friends, means nothing.”

I could not disagree more with that last desperate sentence. A speech (read) that backs my contention more eloquently than I could ever state myself. The best excerpt from that speech?

“Let me give you a tip on a clue to men’s characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it. “Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter. So long as men live together on earth and need means to deal with one another–their only substitute, if they abandon money, is the muzzle of a gun.

As I reflect on the year that was 2007 I am reminded of wisdom from years back:

As you consider that great excerpt from “The Fountainhead” consider another character from the same book - “Ellsworth Toohey”:

Ellsworth Toohey seeks power to control men and does so under the auspices of “humanitarianism” and a false sense of selflessness. Toohey destroys greatness by exalting mediocrity. He lives to empty souls and fill that void with his own power. Through encouraging sacrifice, removing some form of a man’s desire, he hopes to be there to collect on that sacrifice, as he says on p. 666 “When there’s service, there’s someone being served.” He is the ‘benevolent dictator’ bent on making men subservient so he can control their destiny and “well- being”, effectively promoting the slave/master relationship that he extols as having existed throughout mankind (this is also noted by Roark in his courtroom speech at the end of the book). Toohey’s target in this conquest is man’s mind, and he sets out to muddle it by pitting men against men and establishing a sense of doubt in their being. He plots to destroy their ability to judge on their own, inciting them to think first of everything and everyone but themselves.

if it is possible to have a second life, is it possible for a second life to have a second life? Is that where we are headed?

The teenage brain, Laurence Steinberg says, is like a car with a good accelerator but a weak brake. With powerful impulses under poor control, the likely result is a crash. That said, does that mean we give the punk who shot and killed Washington Redskin player Sean Taylor a break because he was 17?

Why do men dominate the fields of science, engineering and mathematics? Read.

It’s been a few years since I read it, but a friend reminded me of Ayn Rand’s classic “The Fountainhead” the other day. He kept talking of the character Ellsworth Toohey and making the connection to current day society. Sadly, some people no matter what want a “Toohey” in their life.

Got impulse control? Will we as humans ever graduate?

Except attorneys where “pessimism is considered prudence”, our brains are mostly optimistic. A nice read in the WSJ.

An article with gentle reminders sent in by a blog reader.

Chimps choose more rationally than humans. Not sure what that means exactly!

This article lists many answers to the question: What’s the most important psychology experiment that’s never been done…? One I like: Why is learning slow?

From Slate: Why European banks were the big losers in the U.S. subprime meltdown.

Michael J. Mauboussin of Legg Mason posits an answer (PDF) to the question of “Was Harry Potter Inevitable?” as he investigates “Cumulative Advantage, Counterfactuals, and the Halo Effect”.