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Are Most Humans Saddo-Machistic?

  1. Prospect theory essentially says that humans are either Natured or Nutured to be saddo-machistic.

    They are:
    Risk-Averse when presented with Rewarding Choices/Experiences
    And
    Risk-Seeking when presented with Losing Choices/Experiences


    Hallelujah!!!


    Finally irrefutable empirical evidence to explain human depravity.
     
  2. I Vote

    Yeah
     
  3. Humans must be Saddo-Machistic.
    How else do you explain poor posture?
    Most people have poor posture even though good posture Feels Better.
     
  4. Since you're so into the topic, you should know that sado has one D. It's short for sadism.

    sadomasochism.

    Good luck.
     
  5. No, I would not know - I'm not a devotee of that most popular secret dogma which prospect theory has exposed.


     
  6. Doesn't anyone use the damn SPELL CHECK anymore?:eek:


    You are gonna get you butt whipped by the teacher for such poor spelling young man.:eek:
     
  7. :eek: You’re scaring me.
    I don’t like receiving or inflicting pain upon anyone (including myself).
    I am Risk-Averse when presented with Losing Choices/Experiences...unlike most of humanity.
     
  8. As both an obsessive-compulsive and a masochist, I couldn't bring myself to make that correction. Thanks for the relief.
     
  9. As I'm not too familiar with this study, and spend much of my post market time scanning and spending time with my family, I'm not able to explore and relish in many of these somewhat relevant studies.

    I am (as we all are) very familiar with the inner challenge we have at becoming better at what we do. I believe that all of us suffer from three things that prevent us from reaching our true potential:

    1) The comfort zone: feeling content in the status quo and not honing in on our ambition to improve our situation. I don't believe that we are sado-mascohists, but we are sometimes "afraid" to take that step to the next level. Instead we lock ourselves into the boring world of mediocrity.

    2) Failing to raise our standards: the comfort zone helps this along. Many of us who reach success in trading stay in the comfort zone, and we let it"work against" our expansion because we are afraid to lose what we have worked so hard to achieve. Something I wrestled with was not increasing my exposure as my equity grew. My personal trading plan called for an exposure increase, and I didn't adhere to it for quite sometime, because I was afraid of the unknown. Once I came to terms with the fact that as long as I stuck to my plan and managed my risk, I controlled the percentages. In essence, the risk and reward never changed. In return for increasing my exposure to the risk, I increased my exposure to the reward as well. The only variable was the amount of size I took on. A $100 loss on a $10,000 trade hurts just as much as a $1,000 loss on a $100,000 trade.

    3) Not have the fortitude to stick with our plan: when I refer to the "plan" I'm talking about the global plan, and the plan for each trade (entry,stop and target). I'm sitting with a swing short, and it's my second time going back to the stock over a three week period. Years ago, I subscribed to the belief of "not going back to the well" too many times. Now, I try "my best" to look at the stock as a brand new trade. I set entry and exit, and I came very close to closing out the position several times today. There was no reason for me to do this, the stock had not reached my stop or target. I found the intra day minutia was getting to me,and I was bored.

    We can let sado masochistic tendencies take control of our trading, or we can take control of our trading.

    Interesting post, thanks for sharing.
     
  10. Yes, but all too often this wave function collapses to reveal a sadomasochistic state.
     
  11. Some Clarifications: Sadomasochism usually has some kind of sexual connotations; I don’t mean it in that way at all (so get your mind out of the gutter). I use the word as if it means having a secret motivation to engage in Evil Tendencies. Habitually losing more than it is prudent in the market is a form of sadomasochism, as is smoking 3 packs of cigarettes a day, eating till your 200 pounds overweight, etc., etc.


    The Economic/Statistical Evidence for this assertion:
    Prospect Theory

    The Biological Evidence:
    The Lucifer Principle: A Scientific Expedition into the Forces of History
    by Howard K. Bloom
    http://www.howardbloom.net/
    Read the article: Chimpanzees and Romans, Why Both Make War.


    The two theories combined explain every act of war, famine, domestic violence, unhealthy addictions, gambling losses, and every other form of human depravity.
     
  12. I absolutley believe people have sadistic and masochistic sides.

    Sadism, crushing your enemies, your competition, beating your potential mates into submission, that's just natural. All animals do it. As civilised creatures we have taboos against that sort of behavior, but we still do it in subtle or even unconscious ways.

    Masochism is something we engage in because it makes us feel sexy. When someone says they just blew out their account trading, they are really saying "look at me, baby! I'm a big, sexy, risk taking, high-testosterone, badass"!

    These are only primitive subconscious tendencies of course, but we can't keep the subconscious in check all the time.