* Highly
Recommended *
How
Would You Like To Turn $3,500 Into $50 Million?
Those
are the kind of results that Gene Schwartz helped Boardroom
Inc. achieve.
When
you learn to master the art of advertising and promotion from
Gene, the world will beat a path to your door. You will not
only have success convincing people to buy your products, but
also your ideas, concepts, and beliefs. Power and money decisively
travel toward those who are persuasive.
Many
of the marketers who had the fortune to work with Schwartz
have built multimillion-dollar empires using his ideas. Now,
what's stopping you?
Here's
how to get started today.
-
Patrick Coffey
"The
brain: an apparatus with which we think we think."
-
Ambrose Bierce
What
Your Brainwaves Say About Your Investing Success
By
Andrew M. Gordon
You
know why economists rarely get it right? Because you and I
are constantly letting them down with the decisions we make.
Every time we buy something on impulse, we drive them up a
tree.
They're
beginning to get it, though.
Economists
used to think we act rationally. That every time we save, spend,
or invest, we dispassionately size up the pertinent information
and circumstances and make a clear-headed decision.
What
a hoot. Most of them now acknowledge we're not as rational
as their theories have made us out to be.
Now
a new bunch is saying investors are greedy, stupid, fearful,
emotional, and short-sighted. Don't worry. I'm going to tell
you what you can do about it. But first, let me tell you who
these nervy economists are.
In
1997, a group of neuroscientists and psychologists held a two-day
conference in Pittsburgh and gave presentations to about 20
economists. What came of this was a new way to look at economics.
They called it "neuroeconomics."
My
daughter is a neurology major at Dickinson College in Pennsylvania.
She studies how the brain works. Neuroeconomics goes a step
further. Using the latest imaging technology, scientists look
at the brainwaves we produce when we make economic decisions.
A
recent article in The New Yorker examined some of
the experiments conducted by these "neuroeconomists." In
one study, a group of respondents were put in MRI machines
and given "take-it-or-leave-it" ultimatums - offers
to split various amounts of money between them and another
party. Even though getting a little of something is better
than getting nothing at all, the stingier offers ignited brain
activity in the limbic structure (the part of the brain that's
responsible for anger and distress). The more activity in this
part of the brain, the more likely it was that the offer would
be rejected.
The
conclusion? Emotion trumps reason.
Another
experiment looked at what happens in our brains when we are
faced with the choice between an immediate reward versus a
delayed reward. Volunteers were given two choices: an Amazon.com
gift card worth $15 for immediate use or a $20 gift card that
couldn't be used for another month. The scans showed brain
activity in both the reasoning part of the brain (lateral prefrontal)
as well as the part of the brain responsible for anger and
distress (limbic). The greater the activity in the limbic areas,
the greater the chances that the gift voucher for immediate
use would be chosen.
Behavioral
economists have known for a good 10 years that we act on preferences
grounded in something other than reason. Now we know why. Different
parts of the brain compete with each other. And when the emotional
parts of the brain get stimulated (for whatever reason), our
decisions are more likely to be emotional. And this can result
in lower benefits or higher risk over the long run.
For
example, when people are presented with a 50 percent chance
of making $150 or losing $100, most don't bite. But in an experiment
with patients who had lesions on one of the three regions of
the brain that are responsible for regulating emotions, these
bets were accepted more than 80 percent of the time. Take away
the fear of loss, and the brain usually makes the logical choice.
So
what can you do to tame the emotional side of your brain?
1. Know thyself.
You
don't have to squeeze into an MRI machine to learn how emotional
you are. If you are risk averse ... if you are liable to lose
sleep at night at the first sign of price slippage ... don't
invest in volatile vehicles (like commodities, for example).
2.
Make it as inconvenient as possible to allow your emotions
to dictate your actions.
One
way is to strictly follow sell-stop points.
The
brain-scanning experiments I told you about indicate that the
brain doesn't like ambiguous situations. And what could be
more uncertain than how much an investment will rise or fall?
So we become fearful - which leads to selling our positions
too early or too late.
That's
why I recommend setting 20 percent trailing sell-stops on your
stock investments. This lets you ride your winners as long
as reasonably possible, and provides a point at which you will
exit, no questions asked.
A
good way to do this is with TradeStops.com, an easy-to-use
online service that will help you track your trailing stops
(and a whole lot more).
3.
Know thy investment.
Those
experiments also show that the more you know about an investment,
the less your emotions will drive decisions.
I
hate it when investors put their money in something because
of what they heard over cocktails. If you research the car
you buy, shouldn't you also do homework on your $200,000 portfolio?
It's your money. You need to know the risks, the upside, the
growth drivers of your investment, etc. And if doing this research
is yet another way to circumvent your emotional side, so much
the better.
Investing
isn't about conquering your emotions. It's about handling them.
If you have a handle on your emotions without using any of
the above tools (or other tools of your choosing), you're the
rare investor indeed. As for the rest of us, letting our money
management and investment tools guide and control our financial
decisions is a necessary step toward successful investing.
[Ed. Note: Andrew Gordon is Editor-in-Chief
of ETR's investing services: Income and The
Wealth Advantage He is also a regular
contributor to our Investor's
Daily Edge newsletter.]
* Highly
Recommended *
How
can you avoid getting up and going to work every morning?
If
you want to collect an automatic monthly income of $10,000
or more - without having to get up every morning and "go
to work" - most real estate experts are giving you the
wrong advice. They rave about buying and selling single family
homes. But... they don't admit that single family homes are
difficult investments for instant passive income... for attaining
real financial freedom by not having to get up and go to work
every morning.
Dave
Lindahl makes $27,000+ in passive income month after month...
and can easily show you how
to reap huge positive cash flows from real
estate - with less risk and less money down than single family
homes.
-
Kam Weiler
Contributing Editor, Main Street Millionaire
Notes
from Michael Masterson's Blog: Hospital Stories
I
saw a documentary last night about safety in hospitals. It
was about a new movement to put a stop to preventable deaths
due to hospital errors.
The
movement was initiated by a woman whose baby girl died as the
result of neglectful treatment at Johns Hopkins University.
Instead of clamming up and defending itself against her lawsuit,
the hospital opened its files and worked with her to figure
out how to prevent such tragedies in the future.
This
woman's efforts - along with others - has become a nationwide
initiative to reform hospital culture and, thus, increase safety.
The biggest culprit, the documentary suggested, was the traditional,
vertical power structure that exists in hospitals. Orders come
from the top down. The nurses, who are the caretakers, are
trained to blindly follow doctors' orders, even when they don't
make sense.
This
film tied into something I read in Robert Cialdini's Influence:
The Psychology of Persuasion - in his
chapter on the power of authority.
[Ed.
Note: Read the rest of this article on Michael Masterson's
blog at http://www.michaelmasterson.net/.]
-
Michael Masterson
Your
Productivity Checklist
By
Rich Schefren
It's
easy to overlook some of the most obvious things that may be
interfering with your productivity. To make sure you're making
the most of your time at work, take a quick run through the
following checklist:
1.
The clutter in your office. If you're constantly
looking for things amid the junk that's in your way, you're
wasting time. Get rid of it.
2.
The efficiency of your workstation set-up. The things
you use often should be at your fingertips. For example,
your file cabinet should be close to your desk so you don't
have to walk across the room every time you need something
from it.
3.
The way you organize your e-mail. Delete the messages
you don't need and create folders for those you do need.
That way, you won't have to filter through hundreds of messages
to locate the one you're looking for.
4.
The way you organize your papers. Spend 10 minutes
at the end of each day filing away the papers you aren't
actively using. If you do need to keep some out, put them
in a stand-up file rack that will keep them organized.
5.
Your calendar. Either a written or electronic calendar
is a must, but you'll run into problems if you have more
than one.
[Ed. Note: Rich Schefren is one of the world's best small-business
strategists, with marketing expertise in a wide array of media,
including direct mail, newspapers, radio, magazines, television,
and the Internet. Get the benefit of Rich's business-building
advice at StrategicProfits.com.
And
get much more of Rich's advice on ETR's Bootcamp recordings,
which will be on
sale for a limited time.]
It's
Good to Know: The Sony Reader
By
Suzanne Richardson
During
Bootcamp last Wednesday, Michael Masterson mentioned a new "toy" called
the Sony Reader that allows you to download several full-length
books and carry them with you.
"Is
this worth having?" he wondered out loud.
The
idea of a computer/book hybrid intrigued me, so I decided
to do a little research on it. Here's what I found out ...
The
device is about the size of a paperback book and weighs about
nine ounces. It's covered in leather, with a computerized screen
inside that looks more or less like paper.
Sandwiched
between sheets of plastic, millions of transparent liquid-filled
spheres float in some sort of electronic solution. Inside those
spheres are white and black particles. (Think of them as tiny
snow globes.) The solution is electrically modulated by the
computer in such a way that some particles, black or white,
rise to the surface, "forming crisp patterns of black
and white," according to The New York Times.
The
effect: The black particles are so close to the surface of
the screen that they resemble printed ink on light gray paper.
The text can also be magnified for sight-impaired readers.
There's
no backlight, which means these books have to be read in ambient
light, like regular books. But that means you can easily read
them outdoors in the sun, something you can't do with a laptop.
Okay.
So maybe it's not just a "toy."
* Highly
Recommended *
Imagine
slipping into bed every night...
…And
waking up to (yet another) pile of cash deposited in your account
every morning.
And
knowing you did it all quickly, cheaply and easily.
Talk
about pleasant dreams!
But
it doesn't have to be a dream...
-
Patrick Coffey
Word
to the Wise: Garrulous
"Garrulous" (GARE-uh-lus
or GARE-yuh-lus) - from the Latin for chatter/babble - means
talking too much, especially about trivial things.
Example
(as used by Mark Twain, writing in The Atlantic): "He
took a great liking to this Rev. Mr. Peters, and talked with
him a great deal: told him yarns, gave him toothsome scraps
of personal history, and wove a glittering streak of profanity
through his garrulous fabric that was refreshing to a spirit
weary of the dull neutralities of undecorated speech."
