Daily Speculations

The Web Site of Victor Niederhoffer & Laurel Kenner

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Kim Zussman

11/08/04
Beginner's Luck and Neuroplastic Monks

Friday WSJ Begley science column discusses interesting research in neuroplasticity, the recently discovered brain capacity to change circuitry with experience. Physical example includes pianists who practice many fast arpeggios and develop difficulty moving index and middle fingers independently since the brain changes to consider both fingers as one. Advanced MRI scanners and EEG brain wave monitoring are used to study plasticity.

Richard Davidson of U. Wisconsin* convinced the Dalai Lama to donate Tibetan monks for study. Monks, who practiced meditation over 10,000 hours, were compared with novice meditators. Both groups were asked to "compassion meditate"; a state of consciousness of loving kindness for all beings.** The monks showed far greater gamma-wave activity than the novices, which is thought to represent ability to knit together far-flung brain circuits. Furthermore, the meditating monks showed dramatic waves not previously reported in literature, as well as a sprawling circuit that switches on normally when observing suffering. Monks with the most hours of meditation showed the greatest changes.

So it is possible to shape brain function not only as result of experience and external stimuli, but also through discipline of thought such changes may be attained internally. Beyond further elucidation of religion, does this type of learning have application to trading?

1.Defeating behavioral finance foibles such as loss aversion, representativeness, etc., which drive the herd 2.Study of meditational states (Dr.Brett's biofeedback?) apropos to trading success 3. Learning what the 7000 hedgies are doing without seeing their positions 4. Lotus position at the monitor
There is also the inverse consideration of beginner's luck: It is possible that in many cases learning and experience paradoxically defeats objectives. In trading, for example, do short-term moves and resultant hope or dispair mold brain activity to make the wrong decisions if the goal is long-period profits? (gamma waves canceling alpha waves). Kim * Davidson, R. J., Kabat-Zinn, J., Schumacher, J., Rosenkrantz, M., Muller, D., Santorelli, S. F. et al. (2003). Alterations in brain and immune function produced by mindfulness meditation. Psychosomatic Medicine, 65, 564-570. *Davidson was named fellow of Wisconson Academy of Arts and Sciences: "News flash: we can harness our emotions to improve our physical and mental well-being. For that powerful message we can thank Richard Davidson, a professor of psychology and psychiatry who was one of the first Western scientists to recognize the value of Eastern spiritual practices in physical and mental health. His research on brain function and the impact of meditation on emotional health has taken him to highest peak of the Himalayas to study the brain waves of Buddhist monks-work that has earned him the respect and friendship of the Dalai Lama, who has visited Davidson's Madison laboratory along with a number of monks who participated in studies there-to the cubicles of ordinary Wisconsin employees to alleviate the damage of stress in their lives. Davidson was the youngest person ever to receive the Distinguished Scientific Contribution Award from the American Psychological Association, one of the highest awards one can receive in psychology. His groundbreaking findings and prolific writings have won him numerous honors and placed him at the top of his field, and he has been profiled and widely quoted in such popular publications as Time, Newsweek, and the The New York Times." **An escape for uncontrolled feelings of compassion has now been opened for the election-shattered seeking flight to open-armed north (http://tinyurl.com/5jzs4)