Practical analysis for investment professionals
22 February 2013

Weekend Reading for Financial Advisers: Prospect Theory, Pressure, and Premiums

This week’s selection of interesting reading (and viewing) from the past few weeks, presented in no particular order:

Behavioral Finance


Investing/Risk Management

Insurance/Elder Care

China/Economics

Leadership/Stress Management

  • Why do some people succeed under pressure while others fail? It is a question that has been tackled countless time in recent years, including a 2010 book aptly titled “Clutch: Why Some People Excel Under Pressure and Others Don’t.” More recently, however, the question was explored through the lens of children and exam stress: “Why Can Some Kids Handle Pressure While Others Fall Apart?” As I learned, we all carry the COMT gene, which “carries the assembly code for an enzyme that clears dopamine from the prefrontal cortex. That part of the brain is where we plan, make decisions, anticipate future consequences and resolve conflicts.” There are two versions of the gene: One builds enzymes that slowly remove dopamine while the other builds enzymes that rapidly clear dopamine. We all have one or the other, or a combination of the two, and this plays a big role in how we handle stress. The article is a great read and doesn’t just apply to children and parents — we can all learn more about why we respond to stress the way we do. (The New York Times Magazine)

And Now for Something Completely Different

  • Oliver Sacks, neurologist, writer, and amateur chemist (a.k.a. professor of neurology and psychiatry at Columbia University), published a fascinating essay on memory: “Speak, Memory.” Spend time with it, it’s worth it. (New York Review of Books)

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Photo credit: ©iStockphoto.com/JLGutierrez

About the Author(s)
Lauren Foster

Lauren Foster is managing editor of Enterprising Investor and co-lead of CFA Institute’s Women in Investment Management initiative. Previously, she worked as a freelance writer for Barron’s and the Financial Times. Prior to her freelance work, Foster spent nearly a decade on staff at the FT as a reporter and editor based in the New York bureau. Foster holds a BA in political science from the University of Cape Town, and an MS in journalism from Columbia University.

2 thoughts on “Weekend Reading for Financial Advisers: Prospect Theory, Pressure, and Premiums”

  1. Check out the book called The Age of Spiritual Machines, interesting stuff.

  2. Thomas says:

    Bravo on this post! Fantastic information!

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