Throughout this book, I cite research to support the recommendations I make for defining your own personal Gyroscope. Some of this material is from contemporary sources. Yet, for many of the over-arching concepts and themes, I draw from the ancient world. When financial services professionals first enter treatment, we start with a review of some key themes, including virtue, character, greed, obsession, and other classically based time-proven behavioral standards. For these exploratory ... Continue Reading
What They Did Not Teach You in Business School
Why did you get into this business? Think back to your MBA program. Obviously, a career path that led you into the financial sector must have been motivated by promises of vast riches. But, was money a reason you went to business school? Or, was it the reason you opened this door and stepped through? If your entire professional life has been predicated on the pursuit of money and power, your life plan has a fundamental flaw. Sure, business school can better equip you to be a ... Continue Reading
The Psychology of Commerce
Consider the following statement: “The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance.” Can you hazard a guess on when this warning was uttered and who made these dire predictions? These statements were actually made more than 2,000 years ago ... Continue Reading
Eating What You Kill
To begin to explore the psychology of this often merciless, but always fascinating industry, it helps to understand how the mindset is rewarded on Wall Street. Nothing roils Main Street more than the prospect of yet another year of 'abundant' bonuses on Wall Street, especially during these trying times. Even in the rolling wake of the most recent market debacles, while the public mood was mollified briefly, it did not take too long for things to get back to business as usual. In June, 2009, ... Continue Reading
Wall Street Psychology
Psychology is the universal underpinning and substance of all human experience. Psychology is the study of behavior. Behavior consists of a variety of entities: feelings (emotions), thoughts, cognitive functions, perceptions, fantasies, yearnings, relationships, achievements, skill sets, actions and deeds. Money behavior is quite complicated. Money management, investing, spending, estate planning, trusts, budgeting, and even hoarding can all be part of the good life, what Aristotle referred to ... Continue Reading
Major Economic Theorists (“The Fab Five”)
No blog that breaches the subjects at the intersection of economics and psychology, especially wall street psychology, would be complete without some discussion of Adam Smith, John Maynard Keynes, Karl Marx, and Friedrich Hayek, and Milton Friedman. These scholars laid the groundwork for modern thinking about commerce, money theory, credit/debt, the business cycle, production, government intervention, and economics. Adam Smith (1723-1790), a philosopher and Scotsman is considered the founder ... Continue Reading
Brief History of Money
Money is anything that is accepted as payment for goods and services, and repayment of debts. Money functions as a medium of exchange, a store of value, a unit of account, and a method of deferred payment. Originally, money was a commodity based in physical value. Today contemporary money systems are based on what is called fiat money: money without value as an actual physical commodity. Fiat money is money as we commonly know it because it has been declared so by governments to be legal tender ... Continue Reading
Selective History of the Stock Exchange
A stock is a share of ownership in a company that can be bought, sold, or traded as contrasted with a bond which is loan to a company that can be bought, sold or traded. Trading may have occurred as early as 9000 BC to 8000 BC when clay tokens were used for accounting and financial transactions. From 4000 BC to about 3000 BC bulla came into use. This technology involved a clay purse with tokens that could be sealed. The tokens were, in essence, financial records. From approximately 2500 BC to ... Continue Reading
The Necessity of Balance
With this blog, the mission is to provide FPs with a variety of devices and methods designed to help achieve personal and professional wellness. For the financial professional, the two are intractably intertwined. However, the individual must first be willing to be truly honest and self-reflective before genuine progress can be made. You must look within yourself and beyond your ego, and fear, to assess the lack of balance in your life. As I have found in my practice, even the most successful ... Continue Reading
We Already Know Right From Wrong
Modifying your behavior to blend in with the communal status quo is not enough. Deep down inside, we all know right from wrong. So when you deny your integrity, and when you don't stand up for what you really feel and think, there are always consequences. This is the major flaw in the self-help industry. You simply cannot be satisfied pursuing standards set by others if you are repressing your own instincts. On the surface, this sounds counter-intuitive, coming from a blog actually advocating ... Continue Reading
Looking at Life Through Virtuous Eyes
Albert Einstein once said, “We can’t solve problems by using the same kind of thinking when we created them.” My patients need to change their mindsets, and tear down repressive obstacles impeding growth. The person who honestly accepts accountability also enjoys the psychological salves provided by virtue, integrity, dignity, and honor. He is better able to develop a moral compass when he is no longer repressing his morality. In the deepest recesses of the mind, no one is above ... Continue Reading
Look Beyond the Cold Hard Facts
Our money, our minds, and our morality have been intractably intertwined since the very first transaction of value was consummated. But interestingly enough, when it comes to a discussion about the history of commerce and finance, historians tend to strip out psychology and morality—rarely straying far from what they contend are the cold hard facts. More often than not, psychology only factors in when exploring aspects of marketing, negotiating, and/or trading—but usually to explain some ... Continue Reading
How Sour is Your Lemon?: Toxic Product Syndrome
Automobiles are marketed along two major dimensions: structural quality and consumer image. How these variables interact raises interesting issues concerning theory vis-à-vis consumer psychology and markets. When corporate messages of quality and image are asymmetric – and possibly disparate – a psychological syndrome can develop among various players that is adverse to the market. This syndrome is called Toxic Product Syndrome (TPS). The notion of a syndrome derives from ancient Greek; the ... Continue Reading
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