No Bullshit HYIP Blog, A Part of No Bullshit Network

Some food for thoughts from the book The Intelligent Investor,

Why, then, do investors find Mr. Market so seductive? It turns out that our brains are hardwired to get us into investing trouble; humans are pattern seeking animals. Psyhcologists have shown that if you present people with a random sequence - and tell them that it’s unpredictable - they will nevertheless insist on trying to guess what’s coming next. Likewise, we “know” that the next roll of the dice will be a seven, that a baseball player is due for a base hit, that the next winning number in the Powerball lottery will definitely be 4-27-9-16-42-10 and that this hot little stock is the next Microsoft.

Ground breaking new research in neuroscience shows that our brains are designed to perceive trends even where they might not exist. After an event occurs just two or three times in a row, regions of the human brain call the anterior cingulate and nucleus accumbens automatically anticpate that it will happen again. If it does repeat, a natural chemical called dopamine is released, flooding your brain with a soft euphoria. Thus, if a stock goes up a few times in a row, you reflexively expect it to keep going - and your brain chemistry changes as the stock rises, giving you a “natural high”. You effectively become addicted to your own predictions.

But when the stocks drop, that finacncial loss fires up your amygdalathe part of the brain that processes fear and anxiety and generates the famous “fight or flight” response that is common to all cornered animals. Just as you can’t keep your heart rate from rising if a fire alarm goes off, just as you can’t avoid flinching if a rattlesnake slithers onto your hiking path, you can;t help feeling fearful when stock prices are plunging.

We’re humans after all, sometimes its better if we could place the emotional part aside and try to look at things in a more rationale manner when events happen. The same theory should be applied when it comes to any form of investing instruments, HYIP as well.

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