We all know that fear and greed are the driving factors behind the markets. Now there is a study that shows an actual physiological connection between harmone (Testasterone & Cortisol) levels in traders to their market success  - follow this LINK. A few snippets below:

• Every morning for a week, 17 harried securities traders at a London brokerage firm began their business day by spitting for science. After analyzing their saliva samples, researchers at Cambridge University concluded that they were watching a stock market on steroids. The tests revealed a curious fact about the biochemistry of profit and loss: The higher a trader's morning level of testosterone, the more likely that trader would have a profitable day -- up to a point.
• All of the volunteers were so-called noise traders, who buy and sell securities quickly to profit from small but fleeting variations in stock prices. Their trades risked up to $2 billion at a time.

Now my question to you sages is: how do you think this translates to all investors or is it just a small group hyper traders that get affected? ...... Anil

Who cares about the test results for hyper-traders' spittal, Anil? It doesn't mean squat to me or anyone else here. Even the most active and profitable self-professed traders on these boards don't have billions of dollars to tinker with.

I don't mean to be brusque, Anil, but I know that my response can't help but come across that way.

Wouldn't you agree that it's true, though?

Because of their billion-dollar balances, hyper-traders are able to minimize their risk by seeking as little as just a few pennies' profit per share ---and even do it several times in the same day. Their reality encompasses my wildest dreams of financial success. LOL!

Regards,

Susan

What segment of the population would become hyper traders to begin with?  This is an aggressive, risk taking, self selected group to begin with.  I think they burn out by 25 or 30 and become too cautious.  It's like fighter plane jocks.

But I do think that there is some inherent personality and/or genetic traits that help in determining  risk level characteristics.  We see this all over this board and rational thoughts and beliefs are only a small portion of what determines what one considers too risky.

Roberta 

I do think that there is some inherent personality and/or genetic traits that help in determining  risk level characteristics.

Good point, Roberta.

... rational thoughts and beliefs are only a small portion of what determines what one considers too risky.

I agree. I just don't think testosterone levels do it. IMO, the testosterone indicates only how much the hyper-traders have psyched themselves up before the market opens.

Perhaps the real reason behind the testosterone is that a "pumped up" trader is much more likely to react rapid-fire to his/her instinctive or gut decisions. At worst, they have a 50/50 chance of making the right decision. This gives the phrase He who hesitates is lost a new meaning, doesn't it? LOL!

Regards,

Susan

Sounds like we are hung up on whether aggressive traders have similarities with common investors, which they probably do not. Perhaps, I did not phrase my question right. I agree that hyperactive traders might benefit much more from high testasterone levels, What I was trying to ask is whether some modest level of those characteristics are needed for being a good investor or is there another skillset or virtue (like patience, persistence etc) that helps us ordinary investors succeed in investing ..... Anil

I think (therefore I am) that two factors determine long term success. 1) The further away from Wall Street the more successful you are. 2) Never watching CNBC or similar hyperactive business chanels.

Seriously, an unemotional critique of the numbers and management team(s) along with the virtues you cited seems to fit the most successful investors (Buffett being number one). 

I think it's more of an either/or situation and the basic personality traits that the individual brings determine which skill set works better for them.

I do better with the patience aspect.  I can't seem to master to sell discipline necessary for successful momentum investing.  I can identify the opportunities and am willing to buy long term hold positions at lows and do some sector investing with my portfolio and keep taking excessive profits but I can't buy and ride up and sell.  I'm not saying that it can't be done just that I can't make it work for me b/c of these inherent traits.  People have to figure out what works for them.  The plan matters less than having a plan and sticking with it.

Roberta 

If the MEN in this World Did Not have those Traits?

We'd still be living in the Stone Age..( Kiss all our modern invetions good bye)

"He who takes No Chance, Has no Chance"

Don't teach your Sons to be Cautious and Afraid of Taking Risks.. He will become a Moma's Boy and a Failure in life..

Think Warrne Buffet, Bill Gates, Thomas Edison and our Astronauts to name just a few..

Non -Risk takers? Try Iraq, Iran and the rest of the Middle east and What Happened in WWII.. If we didn't Invade, we'd still have Hitler...and 50 million Jews would be dead by now..

LOL

Hitler was a risk taker too.

Just thought I'd add that little nugget of truth.