Repellent; The Magical Law of Attraction

Smile or Die: How Positive Thinking Fooled America and the World by Barbara Ehrenreich

As most long-time readers would guess, I don’t have much truck with the concepts of positivity.  The appropriate and mindful attitude of most investors should be a constant expectation of something going wrong, because our mindless reptilian brains will automatically gravitate to the sunny upsides of over-optimism given the slightest reason.

Generally the advocates of positive thinking are in the ascendency – they tell people something they want to hear, namely that you can have what you want merely by wishing for it.  This is the magical law of attraction and not only can it impoverish investors directly it also does so indirectly, through its effects on managers and employees.  Exercised as mind-control it’s repellent, unnatural and destructive.  Get real, folks.

Read Full Post >>

Happy People Make Terrible Traders

Optimistic Fools

People who are happy are more confident and expect to make more money by trading, and anticipate taking lower risks in doing so. This result ought to be enough to depress most people, but most people are optimistic and don’t depress easily. This is especially true if they make money on their random trades, because that makes them happier, more optimistic and more prone to trading.

Even better, over-optimistic people are more socially popular and therefore more likely to be imitated. Whether any of this will really make anyone happier is doubtful, but we can but hope. It certainly won’t make for better investors.

Read Full Post >>

Manifesto For a Low-Growth World

Escher Economics

Trying to find a way out of the economic trap that we currently find ourselves in is like attempting to escape from one of those Escher drawings in which stairs spiral round on themselves forever and you find yourself walking up a staircase, upside down. Multiple generations of people have experienced nothing but economic growth, fuelling a consumption frenzy that our rulers are still trying to keep going but, without the vital elements of either growth or debt, we have, temporarily at least, reached the end of the cycle and the bills have to be paid.

The pain that this is engendering amongst consumption minded electorates is seeing political parties thrown out of power for being in the wrong place at the wrong time, and replaced by those that have no better ideas. The key, however, lies not in economic growth but in focusing minds on relative wealth. Being wealthier than your brother-in-law keeps you happy, and happiness is the vital issue in the new world of behavioral economics.

Read Full Post >>

Gross National Happiness

Himalyan Happiness

The tiny state of Bhutan, wedged between India and China up in the Himalayas, is the only country in the world that rates its progress based on Gross National Happiness (GNH) rather than Gross National Product (GNP). Despite the UK's best efforts Bhutan is unique and its experiment is unlikely to catch on across the developed world, but there are more than a few people who think they may have a point.

Firstly there’s the question of what GNP is actually measuring and whether it’s the sort of thing we should be aiming to increase year on year. Secondly there’s the even more fundamental question: what’s the purpose of life? If the answer to that isn’t money then economists need to think very carefully before they start remodelling the world again.

Read Full Post >>

Money Can’t Buy Happiness

Wish Carefully For You May Receive

Often the quest for the illusory bird of happiness is equated with the accumulation of ever increasing amounts of money. If only we had more wonga, moula, spondoolies we’d be so much more cheerful. Only when we get the extra dough our partners find that we’re still the same miserable gits that we were before and elope with the gardener, most of our money and the garden gnome collection.

Worse, not only does money not equal happiness, it seems that offering people money for doing things that they would otherwise do out of the goodness of their hearts can destroy their generosity. Money may not make you happy but it can sure as hell make you a miserable son of a bitch.

Read Full Post >>