A researcher at Upland Downs University in England is using evolutionary psychology to give stock traders and hedge fund managers an edge. The researcher, Richard Thadwicke, a lecturer in psychology at the school, performed a series of studies showing that stock traders perform significantly better in the hours immediately following orgasm.
The study followed a group of twenty-four male day traders. Half were asked to masturbate at randomly determined intervals during the course of the day; the remainder were required to avoid sexual release until after the closing bell.
The result? The men in the release group were more likely during the two-hour window after orgasm to buy stocks that later appreciated in value, and also avoided making as many neutral or losing trades in that period. Their performance in these time slots was significantly better than their performance before and after, and also better than the control group’s.
“The reason is obvious when you think about it,” says Thadwicke. “We are driven in our daily life far more than we ever acknowledge or understand by a small set of core urges—and these are urges that were set long ago in the evolutionary process, when we were in the jungle, so reproduction, food, survival.”
Thadwicke says these urges often lead people astray in the modern, concrete jungle. For example, it is well-documented in the finance literature that people pay too much for popular stocks that are already overvalued. In “All that Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors,” Brad M. Barber of the University of California, Davis, and Terrance Odean of the University of California, Berkeley, found that investors tend to buy stocks that are in the news a lot; in other words, popular stocks. “An overvalued stock is like an attractive mate,” says Thadwicke. “She’s the girl you might know nothing about, beyond a superficial look at her curves and slopes, but you can’t resist the thought of getting your hands on her bottom line.” By the same token, undervalued stocks are the plain old maids who sit alone in their studies, knitting. “Her benefits are not immediately apparent,” says Thadwicke. “Maybe she’s a good decorator or loyal over the long term. Well, you won’t be thinking about that when she asks if you want to come upstairs and complete a transaction.”
Thadwicke adds, “You see, our thinking about stocks and sex gets all muddled.” Thadwicke points out that John Maynard Keynes famously compared the stock market to a beauty contest. “This intuition has been around for a long time, though maybe cloaked in more respectable, for the times, garments. I’m just putting a scientific foundation under it.”
Another well-known pitfall for traders is trading too much. Thadwicke found that his masturbating day traders were considerably calmed after orgasm. “Think of it this way: every expert agrees the best investment strategy is buy and hold; in other words, put your money in a diversified fund and leave it there. Why is that so hard for people to do? It’s like telling a bloke, settle down with that nice girl, and don’t even think of looking at another one, ever, for the rest of your mortal life.”
Orgasm triggers a chemical change in the body, decreasing the sexual drive and allowing the mind to act more rationally and sensibly. “The average male can at least have that hour or two to think clearly,” says Thadwicke. “It turns out man is only Homo economicus when he’s Homo satisfactis.”
Thadwicke added: “We did an amusing little calculation where we constructed a portfolio out of only those investments made by traders in what I call ‘the golden hour’ and it substantially beat the benchmark as well as almost 98% of fund managers tracked by Morningstar. This implies masturbation could be a substantial advantage.”
Thadwicke did more than chuckle over this fact, though. He has pitched his services to investment managers and hedge funds. Several large firms, though he won’t name clients, have taken him up on the offer. “We’ve instituted compulsory masturbation for anyone involved in making trades. It’s only logical. And it seems to work best if we time it to the slots of the day with the highest volume. I’m sure there’s more we can do in this area, but we’re already seeing great results. With one firm, I’m looking into a rotation system, so that only the freshest traders are working at any given time. There’s some cost in terms of building appropriate facilities and the monitoring program, but it’s easily worth it.”
Another one of Thadwicke’s clients, a large investment bank, has opened an office in the dusty, remote town of Curduhld’s Crossing, Geneva County, Nevada, USA, and is experimenting with “providers” to keep traders at their best. They believe it will prove a significant marketing advantage in attracting both clients and employees.
