Sunday, 19 June 2011

Gather around you an advisory board of female elders who meet in a soothing spa

There is an article in the Observer newspaper today indicating over-30 females should be better at investment decisions (or any risk-related enterprise decisions for that matter) than men.
Testosterone and high finance do not mix: so bring on the women
I have excerpted the bullet points below.

And here is an article in Business Week that seems to confirm that.
Women Hedge Fund Managers Outperform Men

Here is the excerpt:

Neuroeconomics: Six things that the science of decision-making reveals

■ If groups of young men are shown pornographic pictures of women and then asked to choose between safe and risky investments, compared with men shown non-pornographic pictures they choose far riskier portfolios.

■ Our brains are designed to seek out novelty, but too much information can overwhelm them; we are generally better at assessing risk when listening to Bach than with the chatter of TV news.

■ Men's brains tend to shut down after they have proposed a deal, waiting for the response. Scans show that women brains continue to be active, analysing whether they have done the right thing.

■ Humans are the only animals that can delay gratification, a function of the prefrontal cortex. However, the prefrontal cortex only matures after the age of 30, and later in men than women. Before that, we are more likely to seek immediate gratification.

■ Our brains reward social interaction with the release of a chemical called oxytocin. It makes us feel good when we follow the herd. Stock market bubbles are one likely result of this.

■ Our brains are wired for human oxytocin-mediated empathy (or HOME). We are biologically stimulated to love (or hate) what is most familiar to us. We are built to form attachments, to value what we own more than what we do not own. This fact skews the rationality of all our investment decisions.