I started writing this from the train between Florence and Milan, watching the Italian countryside, and finishing this overlooking Paris.
A wonderful few days in Florence, a city I have not been to for some 35 years (my age is showing). But unlike many places, which have not changed for the better, Florence is timeless, rich in history, and the beauty and innovation of its art and architecture. And while my eyes may not view Florence with the freshness of my first trip to Europe, it nevertheless has not lost its capacity for wonder and awe on just how transformative the Renaissance was to its time and our world today. A wonderful, stimulating break, and one that made us realize just how much stress we have been under the past year, and how a change of place helped us unwind and restart.
Fortunately, my body accommodated itself well (my ‘new normal’ always involves some worry while away). While the flights made my cold come back, the dry heat (33° C) made it go away. My stomach allowed me to enjoy the food (why does one eat so much better in Europe even in modest places than in Canada?). And my real world ‘pulmonary function test’, climbing the Duomo (close to 500 steps) and the path to San Miniato al Monte, while accompanied by a lot of huffing, puffing and increased heart rate, was a pass (although my confidence in my balance made me hold on to railings more!). Not doing too badly, after all.
I read John Coates, The Hour Between Dog and Wolf, another in a series of books on behavioral economics, from the interesting perspective of someone who has been both a trader as well as a researcher. Again, much like other work in this field, such as Thinking, Fast and Slow by Kahneman, largely demolishes the classical economic rational decision-making, as it maps out the linkages between our conscious and unconscious systems. Quote:
Today Platonic dualism [mind-body divide] … is widely disputed within philosophy and mostly ignored in neuroscience. But there is one unlikely place where a vision of the rational mind as pure as anything contemplated by Plato or Descartes still lingers – and that is in economics.
Many economists … assume our behavior is volitional – in other words, we choose our course of behavior after thinking it through – and guided by a rational mind. According to this school of thought, we are walking computers who can calculate the rewards of each course of action open to us at any given moment, and weigh these rewards by the probability of their occurrence…
… Unearthly ideals, we have learned at great cost, too easily lead to social and political disasters. Equally, otherworldly ideals of economic rationality can too easily lead to the sign of a marketplace fatally prone to financial crises.
His policy recommendations for trading desks largely revolve around more diversity (dilute testosterone through more women and older traders), move from short to longer-term compensation, and acknowledge and account for the irrationality in decision-making. All in all, a good read for those interested in decision-making in any sphere, not only the financial markets.
My usual monthly round-up of blog stats. Top articles of interest, apart from the weekly updates and some of the ‘reflection’ pages, include:
- One Man’s Fight Against Cancer
- Life, Interrupted by Suleika Jaouad
- A New Class of Cancer Drugs May be Less Toxic
- 20 Ways to Relieve Stress
- Research Shows that the Smarter People Are, the More Susceptible They Are to Cognitive Bias
And Happy Canada Day to my Canadian readers.
6 weeks to go!