The Hour Between Dog and Wolf : Risk Taking, Gut Feelings and the Biology of Boom and Bust
Overview - successful Wall Street trader turned Cambridge neuroscientist reveals the biology of boom and bust and how risk taking transforms our body chemistry, driving us to extremes of euphoria and risky behavior or stress and depression The laws of financial boom and bust, it turns out, have more than a little to do with male hormones. Read more...
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More About The Hour Between Dog and Wolf by John Coates
successful Wall Street trader turned Cambridge neuroscientist reveals the biology of boom and bust and how risk taking transforms our body chemistry, driving us to extremes of euphoria and risky behavior or stress and depression The laws of financial boom and bust, it turns out, have more than a little to do with male hormones. In a series of groundbreaking experiments, Dr. John Coates identified a feedback loop between testosterone and success that dramatically lowers the fear of risk in men, especially younger men -- significantly, the fear of risk is not reduced in women. Similarly, intense failure leads to a rise in levels of cortisol, the antitestosterone hormone that lowers the appetite for risk across an entire spectrum of decisions. Coates had set out to prove what was already a strong intuition from his previous life: Before he became a world-class neuroscientist, Coates ran a derivatives desk in New York. As a successful trader on Wall Street, "the hour between dog and wolf" was the moment traders transformed-they would become revved up, exuberant risk takers, when flying high, or tentative, risk-averse creatures, when cowering from their losses. Coates understood instinctively that these dispositions were driven by body chemistry -- and then he proved it. The Hour Between Dog and Wolf expands on Coates's own research to offer lessons from the entire exploding new field -- the biology of risk. He brings his research to life by telling a story of fictional traders who get caught up in a bubble and then a crash. As these traders place their bets and live with the results, Coates looks inside bodies to describe the physiology driving them into irrational exuberance and then pessimism. Risk concentrates the mind -- and the body -- like nothing else, altering our physiology in ways that have profound and lasting effects. What's more, biology shifts investors' risk preferences across the business cycle and can precipitate great c
Publishers Weekly Reviews
Publishers Weekly® Reviews
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Far from the preserve of cold-blooded rationalism, Wall Street is dominated by primitive drives and hormonal surges, argues this scintillating treatise on the neurobiology of the business cycle. Coates, a Cambridge neuroscientist and ex–Wall Street trader whose previous studies have shown that male traders perform better when they have elevated morning testosterone levels, draws an intimate portrait of life on a trading floor, with its intuitive, rapid-fire deal making under pressure, as an almost physical athleticism directed by brain processes and chemistries evolved for less cerebral pursuits. As bond markets soar and slump, he notes, traders experience involuntary fight-or-flight reflexes, jolts of dopamine, and convulsions of the primal “gut brain.” In bull markets, the euphoric boost in testosterone from successful trades fuels ever crazier risk taking until the inevitable collapse, when the defensive steroid cortisol takes over and turns financiers into risk-averse paralytics dependent on government bailout and stimulus. Coates takes economist John Maynard Keynes’s idea of entrepreneurial “animal spirits” and grounds it in hard science, while introducing readers to a brain that’s inseparably intertwined with a very demanding body. The result is a provocative and entertaining take on the irrational exuberance—and anxiety—of the modern economy. Agent: Natasha Fairweather, AP Watt, U.K. (June)