Our Brains Aren't Equipped For This Market
Just as it is often said that plastic surgery advanced dramatically after World War II when doctors treated so many wounded soldiers, in the future people will look back on the Great Crash of 2008 and say: That's when the hoards of emotionally battered traders helped us truly understand how the brain behaves when subjected to total, utter and continual freakouts! Today Time devotes some attention to the amygdala, the little part of the brain "that takes over when we are frightened."
The problem is the amygdala cannot handle unpredictability, and the longer uncertainty reigns, the greater number of errors it will make, especially errors based on following others' examples—so that "if other people start selling a stock you thought was valuable, you may want to do the same"—or indeed based on following the instructions of Jim Cramer.
So what to do? "The most productive thing is to recognize that it's natural to feel anxiety in the context of unpredictability," counsels an anxiety researcher from SUNY Albany. "And then sit with it. Do not let your feelings decide what to do. Feelings are fickle."
Duly noted! And Oliver Stone, if you're reading, may we suggest "Feelings are fickle" as the new "Lunch is for wimps" in Wall Street II?
Fear Factor: This Is Your Brain In an Economic Crisis [Time]