O'Reilly logo

The Indomitable Investor: Why a Few Succeed in the Stock Market When Everyone Else Fails by Steven M. Sears

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

This Is Your Brain Visualizing Money

Science is starting to prove that visual cues heavily influence investment decision-making. Everyone with kids worries that watching too much TV, or incessantly playing video games, will rot their brains. Well, it turns out investors have similar problems. Risk-based decisions, like buying stock, can be manipulated by visual cues that stimulate a region of the brain called the nucleus accumbens. The nucleus accumbens is part of the brain’s reward circuitry. Although the nucleus accumbens—which is activated by drugs, alcohol and sex—has traditionally been studied by scientists to understand addiction, it is now at the center of emerging research into investing.

Brian Knutson, a Stanford University psychologist, stumbled upon this when searching for a control mechanism in a study of human emotion. He needed something that would cause everyone in his experiment to react the same way. He tried food. He tried pornography. Everyone reacted differently. “Money seemed to do the trick,” Knutson said.6 Everyone reacted the same. Everyone wanted money.

At his laboratory in Palo Alto, California, Knutson scanned people’s brains with a functional Magnetic Resonance Imaging (fMRI) machine. The machine illuminates the flow of blood to let researchers obtain anatomical and functional views of the brain. Since the fMRI was developed in 1992, just two years after the online brokerage industry formed, the fMRI has been used to illuminate regions of the human body ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required