Finishing How to Take a Chance (notes) led me to chase down the source of a few quotes from the book. The last post was a result of that distraction. Today’s post is another — and the last of that odyssey.

In 1902, a guy named Clemens J. France wrote a study called The Gambling Impulse. It’s interesting only in the sense that he took a biological and historical perspective of gambling and chance.

The summarized version is this. Gambling has been around forever, literally since the first utterance of “Wanna bet?” It can be traced back several thousand years — Ancient Egypt, Greece, Rome, and to 2100 B.C. China. Biologically, its a battle of hope and fear, to provide a level of certainty in life. If you plan to glance through the 44 pages, the section on luck, with examples of superstitious beliefs, offered a good laugh. This seemed relevant:

In London about Throgmorton Street (the paradise of stock brokers), there used to sit a man with a bag of nuts into which passers by thrust a hand, and if they guessed correctly the number, they would be paid a penny for each, if wrong, the guesser paid a penny. Many a speculator regulated his ‘bulling’ and ‘bearing’ by his successful or unsuccessful dip into the bag.”

To think that a trader’s (in)ability to guess the number of nuts determined their feeling explains a lot about irrational markets. Continue Reading…

The end of March means it’s time for another quarterly reading update. A vacation in February got me back on track reading-wise. It’s amazing the number of pages you can get through when you disconnect from the internet for 10 days. Anyways, onto the books.

Here’s what I’ve been reading the past three months: Continue Reading…