NeuroInvesting: Build a New Investing Brain

CHAPTER 2

Thrills, Ego, and Impulse

IS IT BAD? IS IT ME?

I held off for a long while and once I jumped in, it started to plunge! I bought at the top again.”

This is one of the common grievances of investors. With the very sensible intention of not falling into the trap of impulsiveness, nevertheless that is exactly what happens. Though we may not realize it, we are not alone in the frustration of doing exactly what we tell ourselves not to do.

At the same time, when we are holding our bows taut, impulse is the very force that we need to let our arrows fly. In fact, we can't do without it, in life and in investing.

How do we distinguish between too much and too little ego and impulse? And more to the point, how do we tame our impulsiveness and yet access its value and intrinsic power at the same time?

What Is Impulsiveness?

Watching my kids on the Roundup ride at the fair reminds me of the concept of thrill-seeking. The riders stand up, harnessed to the circumference of the ride, which then whips around in a circle that tips and swirls up and then down. I hear loud screams and see wide smiles and shocked faces flashing past in a blur. But, as soon as it stops, many of these kids (and adults, too) line up for the next ride. They scream, they laugh, and then they try it again. That's thrill-seeking in a nutshell.

While most don't seek thrills from the stock market the way that some do from the Roundup ride, it's the same emotional content, the same sensation of risking great danger ...