Can investors be controlled from making dumb mistakes? How do you ensure investors keep a cool head?
The Economist reports that electronics company Philips and Dialogues Incubator, a venture sponsored by ABN AMRO, have developed a bracelet called “The Rationalizer” which measures the electric currents under the skin, determining how much anger or elation is passing through. The Economist reports: “The bracelet transmits its measurements to the “EmoBowl”, a saucer-like object which displays a moving light pattern to illustrate the user™s mood. If the person becomes emotionally aroused, the light pattern becomes more intense and turns from a soft yellow to orange. By the time it reaches a deep red, the makers reckon, it might be wise for an online trader to take a break and cool down. If only it had been available to deal-crazed bank bosses.”
Not a bad start. But then, some people get off on that level of elation that leads to bad trades, pretty much in the same way that some people are just chronic gamblers. Only with gambling, at least you know the odds. Which means even the best science is not going to stop people making bad trades.
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