I seem to be getting a bit of a reputation as a purveyor of gloom, especially with posts about solar storms wiping out the electricity grid and possible supervolcano explosions. I like to think I’m just being realistic.
I was really pleased to hear on the radio around about that time an item that started with the usual “recent research shows…” and went on to say that we make our best and most rational decisions when we are feeling down and out. When we are cheerful and optimistic we are more likely to make decisions not in our best interests, thereby storing up future misery for ourselves.
Behind such a statement there is usually some (often American) behavioral research. All I have found so far is an article in the New Scientist, Cheery traders may encourage risk taking.
Now this article didn’t exactly fill me with joy.
One study of 24 volunteers (probably college students) playing artificial bond trading games doesn’t seem much on which to base a philosophy of “gloom is good”. And we already know about irrational exuberance and testosterone-fuelled traders living on the edge and on a short trip to burnout.
So I googled to see whether I could find out more, but every bunch of search terms I used gave me at least 50,000 articles I didn’t want to read.
So is there anyone out there who can help? Am I on the right track?
I thought it might be a neat idea to ask this question over Easter so that after the break we can get back to the serious business of being gloomy again.
Apparently we remember better on gloomy winter days
http://www.abc.net.au/news/stories/2009/04/11/2540942.htm
Thanks, Quog, that’s a start.
I like that!
Bugger off, you gloomy bastard. It’s Easter, everyone has chocolate and buns and I’m just hot and cross. Now I’m off to scowl small children and cute ‘n fluffy animals before discovering the Grand Unifying Theorem. It won’t come to any good – I bet you hate my GUT.
I wish I could, bugger off that is, coz it’s been raining, which I always enjoy, but if it hadn’t I wouldn’t be here at the computer.
Let us know when you’ve found the GUT and we’ll all rejoice!
I believe chocolate sales are up 600% this Easter, so someone’s happy!
Brian;Why not try a post about all the advantages of Global warming.
Or what about gloom and doom predictions that didn’t come true.
Would that cheer you up?
Brian, you would have realised you set yourself up for a couple of friendly jibes such as going by your recent postings you must be the most rational person known & according to quog’s link the one with the best memory.
No doubt there is some merit that better decisions are made when not on false highs,I haven’t got a handy link to back this up. However I do wish to ask when does gloom sink to the level of depression & there exists no rational world whatso ever?
Also what human need is met by those whose existance never leaves the world of gloom? This could be aimed at not only at those who must believe the very worst of eviromental calamity is immediate each & every day & those, usually on the far right, who beleve in each & every conspiracy theory going around.
Of heuristics; ‘positive illusions’; ‘optimism bias’; the genetic hard-wiring of questing ape troupes and humans into majority,extensive optimists and minority, precautionary pessimist contingents; the role of the amygdalae in the forecasting, assessment, and memory of risk and reward, etcetera, I know nothing. Saying that, and it being Easter, I am sure I will die once and live twice, rising again like He, having drunk deeply of the ephemeral waters of life and quenched the fires of original sin and directed lightning bolts from the blue. Hallelujah or Eureka, my realistic brethren, and may your lucky stars always twinkle Southern cruciform.
Well, Nobody’s drunk deeply of something. Lucky Bastard. As for me, I was hoping I would be resurrected today, but nothing. I was sure I was the one. Im a woman arent I? I kick ass don’t I? I like vampires don’t I? I have done EVERYTHING that was asked of me and silence. All I get is silence. What is it with the supernatural? Don’t they GET they have to do something, as part of the deal, every now and then?
Brian, wiki mabye?
http://en.wikipedia.org/wiki/Emotions_in_Decision_Making
chrisl, I don’t need cheering up. Once you learn to enjoy a bit of gloom that inevitably comes your way, you always win.
still@downfall, yes, my sense of humour, such as it is, sometimes gets me into trouble. But you’ve touched on what to me was a serious question. The context of what I heard on the ABC was, I think, that if we have a life crisis and we don’t go under we make decisions that are to our long-term benefit. But that’s not new, and what they were saying was claimed to be new, so I was wondering what I was missing. Thought maybe someone else had heard it and made more sense out of it.
Nobody, I’m speechless.
Casey, thanks for the link. Frankly, though, it is a bit half-assed. I do believe, however, that there is no pure rationality and that emotions are an integral part of all decision making. Most of all we are pattern-forming beings. We come to every new bit of information with a complex web of concepts, beliefs, feelings, values, ingrained habits, not to mention the conative aspects of purposes, will and striving.
So confirmation bias is always with us, only more so, because it goes beyond the purely cognitive, which there is no such thing.
So Brian I presume your glass of ice is half empty, and melting at an unprecedented rate
Glass half empty? Half full?
Why is a bloody glass anyway???
Why not a paper cup? hmmmm?
PS. Cassandra had it easy.
I have read a paper that deals with this issue quite specifically in the context of financial markets. The paper ‘Good Day Sunshine: Stock Returns and the Weather’ by David Hirshleifer and Tyler Shumway in ‘The Journal of Finance’ considered the relationship between sunshine and market index returns. The authors found a strong correlation between sunshine and stock returns. The authors explain this relationship on the basis that investors are more optimistic on sunny days. Therefore on a sunny day investors were more willing to buy and hence the market preformed stronger on sunny days, where investors optimism was higher.
The paper can be accessed from this link
Also an interesting paper to read in this area is ‘Boys will be Boys: Gender Overconfidence and Common Stock Investment” by Barber and Odean which found that male investors fared worse than female investors on average because of over confidence. The male investor’s turned over their portfolio’s too often, resulting in trading losses. They were also more likely to incorrectly attribute gains to their superior investment skills rather broad changes in the market, adding to their overconfidence and inferior performance.
(Could someone please explain how to add paragraph spaces to posts, so i can edit this later, thanks)
Sorry, I did not realise the spaces appeared when posted
Sure, Brian I didnt actually read it, but Im sure you are right as always. I was actually really wondering what Nobody had been imbibing to tell you the truth, and needed an excuse to post. Oh well. Guess we will never know.
I’ve heard that too and it was momentarily cheering.
I am gloomy about the current stock market bounce.
The current rally on Wall St is not the first stage of recovery. Its the last stage of the rip-off.
About two weeks back I predicted that the rally in US stocks, which had been underway for a couple of weeks, would continue if the Geithner plan was accepted. But that the rally would not have long legs because the Geithner plan was a patch-up not a proper reform.
So far the rally appears to be following this course since it is based on financial, rather than factoral, improvements. It could last for a while, especially whilst interest rates are so low. No doubt there are some bargains out there.
Call me an unrepentant bear but I am not convinced that it will be sustained. It will ultimately run out of steam because the underlying state of the US economy and fiduciary is so bad. Neither the bail out or stimulus address the underlying US economic problem, which is the huge legacy of debt linked to unsustainable investments.
The massive public sector debt injection just kicks the problem down the road. Sometime the US will have to recognise that its standard of living has to fall, through tax-hikes or consumption cuts. Its that simple.
I am not the only one who remains skeptical. Soros argues that the rally is a false one. And he has form, more so than Taleb.
When the bad guys are making a killing the good guys should keep their wits about them. I sense another sting operation in the works.
Eventually leading investors will realise, if they dont already know, that economic growth will not validate stock price increases. So the smart money will sell-out leaving another crash for Treasury to bail-out.
Yes, Casey, Nobody has a secret we’ll never know. I’m not sure whether to be sad or glad about that. It’d be different.
Kerro, do you know whether women are better than men at investing? I’d guess they might be.
chrisl, wot mars08 said. We’ve just spent an hour and a half watching a DVD of the film The Black Balloon (my wife’s choice.) Now there’s a film with the glass half full and half empty. Here’s Margaret and David. The father:
Not sure I could actually do it. First-time co-writer/director Elissa Down grew up with two autistic brothers. Close to the bone, but a great film.
chrisl, the carbon concentration in the air is changing at 20,000 times the rate it did over the last 50 million years as the world cooled while the sun got a bit hotter. I hope to stick around until 2030 when I’ll be 90. If things are going pear-shaped then, I’ll be very happy to shove off.
If we get things in hand, I’ll be more than happy for future generations, and happy to shove off.
It’s not whether the glass is half full or half empty, but maybe whether we are going to have a glass at all.
Meanwhile…
Looking at the recent antics in the financial sector, our glass was never meant to be so full anyway. We should have just settled a SMALLER glass?
Brian . It will be interesting to look back in 2030 and see how the climate debate progressed.It could even be over!
I think they will be asking – How did they think they could model climate with such primitive computers?
Why did they think co2 was the main driver of climate?
How did they think they were going to wean people off fossil fuels when there was no alternative.
I hope we are both around then.
Brian @ 4,
Chocolate is a well-known anti-depressant.
Apparently a small percentage of the population lapse into serious depression on grey, cloudy days. For those few its a serious medical problem.
Brian, I read a newspaper report some years ago about how someone found a correlation (positive) between IQ and pessimism. Can’t find it by googling, sorry. But as we know, MSM reports of scientific studies tend to be distorted anyway. (That’s the pessimist talking
)
Yes, Helen it’s one of the hazards of listening to Radio National, also NewsRadio and Local Radio for that matter. They keep giving you the shorthand results of ‘new knowledge’ but you never get to see the research design or the conclusions as expressed by the researchers.
Paul, yes chocolate. For good or ill it’s been off my diet list since the old triple bypass back in 2000. Used to eat a quarter of a pound of it washed down with a pint of full cream milk when I was young. We didn’t know about clogged arteries then.
chrisl, you’re right, there won’t be any doubters around by 2030. No-one ever said that CO2 was the main driver of climate. Most of us know that the greenhouse effect, worth about 30C and what makes the joint habitable, is mostly water vapour. But it’s what happens at the margin that drives climate change. It’s only people like some well-known Australian academic that get it all muddled up.
For about the last 3 million years the main story has been Milankovich cycles, orbital changes, consequent changes in insolation, ice albedo with CO2 as a feedback. Now the main game is CO2 again as it was for millions of years and dramatically during the PETM 55mya (well methane clathrates probably, but carbon-based GHGs).
Btian,
If you want to enjoy being gloomy, then Eeyore’s Birthday is just the thing to read.
If there are benifits from gloom, is there even better results from suffering?
Here is the words of an old tragic.
http://www.quotationspage.com/quotes/Aeschylus/
http://en.wikipedia.org/wiki/Aeschylus
Jack @ 16, you could be right about being gloomy about the stock market. In the end for me it comes down to whether the companies can turn a profit even in adverse circumstances. The last profit reporting season wasn’t too bad profit-wise. It’s just that many companies had to use their profits to pay down debt because of the gun-shy attitude of the banks to lending. Our income stream was down about 30% which is what happened in 1991.
I can’t imagine the next profit reporting season being better. Pretty much anything could happen.
MikeM, you’re right. There’s a fine balance about Winnie-the-Pooh as distinct from Winnie the Pooh.
still@downfall, Aeschylus, my goodness! Why am I not surprised, having seen some of the original theatre efforts on celebratory occasions back at ‘The Downfall’. My own memories go back to Ardie’s barn where we cut our thespian teeth.
You are in good company here because ‘Larvatus Prodeo’ is based on a Greek theatre concept where the masked philosopher (cough!) reveals all from behind the mask.
Brian, time for some nutty Edith Sitwell, I reckon.
“Amid this hot green glowing gloom
A word falls with a raindrop’s boom…
Like baskets of ripe fruit in air
The bird-songs seem, suspended where
Those goldfinches — the ripe warm lights
Peck slyly at them—take quick flights.
My feet are feathered like a bird
Among the shadows scarcely heard;
I bring you branches green with dew
And fruits that you may crown anew
Your whirring waspish-gilded hair
Amid this cornucopia —
Until your warm lips bear the stains
And bird-blood leap within your veins.”
Love it, Posey. To die for. Thankyou!
Brian #25. A childhood memory of mine of a theatre effort at the Downfall has some revelance to this thread. It was the adaption of John O’Brien’s, ‘Said Hanrahan’ to local idenities & geography.
“We’ll all be rooned,” said Mervynham
In accents most forlorn
Good one, still@downfall, must have been a great night