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The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust

3.9  ·  Rating Details ·  757 Ratings  ·  82 Reviews
"A successful Wall Street trader turned Cambridge neuroscientist reveals the biology of boom and bust and how risk taking transforms our body chemistry, driving us to extremes of euphoria and risky behavior or stress and depression"
The laws of financial boom and bust, it turns out, have more than a little to do with male hormones. In a series of groundbreaking experiments
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ebook, 352 pages
Published June 1st 2012 by Penguin Press (first published May 1st 2012)
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John
Jul 10, 2012 John rated it liked it  ·  review of another edition
An interesting read for someone interested in research study results in psychology, neuroscience and the behavioral effects of hormones. Coates is clearly very familiar with both the world of the trading floor and the science he writes about. I was disappointed, however, in the lack of a real punch line as far as workable strategies to take advantage of these effects to make money in the markets. Male hormones increase volatility. OK, I was convinced of that half way through the book. What good ...more
Nichole Smith
Mar 09, 2014 Nichole Smith rated it did not like it  ·  review of another edition
Is there a duck nearby? Because I hear a quack.

In this book, Coates posits that rather than the rational economic beings we like to think make major financial decisions, we are actually driven by physiological impulses much more so than intelligent thought. I'll give Coates props for knowing his biology --but that's about the only redeeming characteristic of this book. First, I'm not sure what is particularly novel about his theory. There's been a lot of attention paid to these issues since 200
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Mike Scialom
Jan 19, 2013 Mike Scialom rated it it was amazing  ·  review of another edition
Like war, activity on the trading floor "consists of long stretches of boredom punctuated by brief periods of terror", writes John Coates in The Hour Between Dog and Wolf (Fourth Estate, £20).
What follows is a minute-by-minute analysis of the trader's metabolism which reveals the effects of the euphoria, the stress, the boredom and the heart-stopping moments of hyperactivity where "nature and nurture conspire to produce an awful train wreck, leaving behind mangled careers, damaged bodies and a d
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Gumble's Yard
Jan 13, 2017 Gumble's Yard rated it liked it  ·  review of another edition
Shelves: 2015
A complex, wide ranging and thought provoking (although far from flawless) book.

The book includes a fictionalised account of a trading desk during the period leading up to, through and after the financial crisis. This is interspersed with detailed neuro-science and (more crucially) bio-chemistry/physiology.

One of Coates crucial assertions is that the mind/body divide (with an implicit belief that the mind is superior and the body becoming increasingly redundant) which has become common in modern
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Andrew Griffith
Oct 09, 2012 Andrew Griffith rated it really liked it  ·  review of another edition
I read John Coates, The Hour Between Dog and Wolf, another in a series of books on behavioral economics, from the interesting perspective of someone who has been both a trader as well as a researcher. Again, much like other work in this field, such as Thinking, Fast and Slow by Kahneman, largely demolishes the classical economic rational decision-making, as it maps out the linkages between our conscious and unconscious systems. Quote:

"Today Platonic dualism [mind-body divide] … is widely dispute
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Terry
Good book on behavior economics. Logic is very clear and easy to follow, although I feel the last couple chapters over-simplify things.

Key ideas:
1. Human beings, after millions of years of evolution, have developed physiological capability to deal with threat and reward.

2. The relationship between body and mind is misunderstood. Body actually receives and processes much more information than our conscious mind, and therefore a lot of human behaviors are driven by our body (through nerve reaction
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Jeremie Averous
Apr 15, 2013 Jeremie Averous rated it it was amazing  ·  review of another edition
This author is a former trader turned neuro-scientist and he explains how stress and hormones drive the behavior of traders, leading to irrational exuberance and well as irrational panic on the markets.

The interesting side of this book is how our physiology is influencing our decision-making, and how it can be contagious in a group. The book describes in minute detail the working of our nervous and hormonal system when we are faced with the stress of modern life.

If there is a proof that the rati
...more
Pavlo Illashenko
Nov 01, 2014 Pavlo Illashenko rated it really liked it  ·  review of another edition
I knew about author's research and had a basic knowledge of neurophysiology and neurobiology before reading this book . I don't feel that I've learned anything new. It was fun to read stories from the trading floor, in some sense even nostalgic. However, nothing beyond that.

One unexpected drawback is related to authors style. I was expecting to read more or less scientific book, but Coates writes more as a journalist or a wall street guy - to much pleasure of speculating with solid ideas than e
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Aaron Terrazas
Sep 16, 2012 Aaron Terrazas rated it really liked it  ·  review of another edition
For someone who's pretty familiar with financial markets but not at all familiar with biology, this was a fascinating read. The author describes how the human body reacts to risk taking, victory and defeat through both neurological and endocrine responses, and due to evolutionary biology.

On the downside, I think it could have been shorter and the "recommendations" aren't very compelling. The book might read better if the author had just ended with his research. Overall, however, I was very sati
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Kris
Dec 12, 2012 Kris rated it really liked it
Good, quick read. Mixes some interesting trading anecdotes with some neuroscience pretty well, going back and forth between providing examples and explaining. That well-executed interweave is probably one of the best points of this. A lot of the neuroscience was somewhat familiar from related works, such as Kahneman's Thinking Fast and Slow, but there were some interesting new points as well, and some framed in different manners. Also fun to have the trading perspective in there for me.
Mark James
Jul 16, 2012 Mark James rated it it was amazing  ·  review of another edition
This book is a delightful concoction of the sciences and humanities. Coates dechipers the deeply rooted aspects of human nature and paints a brilliant image on how factors such as stress and exuberance impact the financial world. I would recommend this for any reader , for it has something to offer for everyone.
Celeste Chia
Dec 14, 2014 Celeste Chia rated it it was amazing  ·  review of another edition
I immensely enjoyed this book. The insights Coates shared were illuminating, especially in an era where people prize logic without knowing the limits of their rationality. It's a shame such findings would hardly be shared in business schools, where theoretical academic knowledge would be conferred instead.
Sophia Dunn
Everyone interested in the current state of global economics really needs to read this book. Written by a neuroscientist, who is also an economist and an ex-Wall Street trader, Coates is uniquely qualified to give us a neurobiogical understanding of how we got into our current situation. It is simply a FASCINATING read.
Ted Lehmann
Jul 10, 2012 Ted Lehmann rated it it was amazing  ·  review of another edition
This book goes a long way toward clarifying issues of the mind/budy connection in trading in the financial markets. Implications for management in that world and, more broadly, for understanding our political world in different ways are exciting and challenging. I've posted the review on my blog. http://tedlehmann.blogspot.com/2012/0...
Laura Kinsale
Aug 07, 2012 Laura Kinsale rated it it was amazing  ·  review of another edition
Gave this 5 stars for the subject matter. Very readable, but mainly this is a topic that REALLY needs some airing. The impact of our biology on our behavior is profound. I've always thought "rational markets" were BS. Very interesting and quite fun to read.
Abhishek Upadhayay
Beautiful. A definitive read. It reinforces the belief system through science.
Nilesh
Oct 23, 2016 Nilesh rated it liked it  ·  review of another edition
The author posits the supposed irrationality of markets on the one side and that of our mind/body on the other side well. But just because both are non-rational in the strictest sense, are they really connected? Despite all his attempts to mesh the two, he fails miserably in the conclusions.

Markets do not work as per any models. As a result, financial markets cannot be mastered by anything howsoever well-defined. This is the first basic premise in the book. All empirical evidences prove this to
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Breakingviews
Nov 27, 2012 Breakingviews rated it really liked it  ·  review of another edition
By Martin Hutchinson

Trading is mostly about neurochemistry. That is the persuasive argument of former trader and current neuroscientist John Coates in his book “The Hour Between Dog and Wolf”. The implication is clear: men have too many of the wrong hormones to be trusted.

Coates believes traders have similar neurochemistry to elite athletes. Like these sportsmen, true short-term traders do not make great use of cognitive abilities, because those reactions are too slow; instead their responses ar
...more
Mike Smith
Sep 11, 2012 Mike Smith rated it really liked it  ·  review of another edition
Shelves: non-fiction
This excellent book combines several ideas I'd read before in ways I hadn't seen. First is the idea of what Coates calls pre-conscious thought. This is the finding of modern neuroscience that a lot of our "thinking" actually happens instinctively and without our conscious awareness. We evolved in conditions where we sometimes had to respond instantly to shadows in the forest or sudden noises and couldn't afford the time it took to consciously evaluate the threat. There is a whole host of automat ...more
Venky
Jul 12, 2015 Venky rated it liked it  ·  review of another edition
Shelves: bibliocase
In this immensely readable book, John M.Coates speculates about the power of physiology on the irrational and conscious acts of man with a specific reference to the fragile and volatile financial markets. As Coates pries out the unseen but unavoidable workings of testosterone and cortisol that manifest in myriad ways, he argues that a thorough understanding of the precision perfect cohesion between brain and body might in the near future,lead to a successful mitigation of risks in a overheated f ...more
Brick&rope
There is a great book here somewhere, but this one isn't it. Just when we are starting to get used to the idea of irrationality in human behaviour impacting economic decision making, Mr.Coates goes one level deeper still. Human physiology, and its evolutionary history, he argues, play a key role in expanding asset bubbles in the financial markets beyond rational limits, and play an equally devastating role in markets crashes becoming deeper and longer than they need to be. The basic premise is s ...more
Colleen
Aug 30, 2016 Colleen rated it it was amazing  ·  review of another edition
Most sociological theories of white collar offenders over the past hundred years have argued that they are more "rational" and calculated actors than street criminals, and therefore can be more easily deterred through, say, sentencing. Coates' book, although it does not specifically focus on law-breakers, offers fascinating counternarrative. He argues that financial risk taking in the marketplace is driven by evolution-derived biological/chemical reactions in our central nervous system, with a f ...more
Duncan
Nov 04, 2015 Duncan rated it it was amazing  ·  review of another edition
Surprisingly good book, combines finance with physiology. Coates explores the artificial division between mind/body all the way from Plato/Descartes and then carefully explains how intertwined our minds and bodies really are via feedback loops (vagus nerve, hormones, etc.). He goes into details on the different physiological systems and is great at bringing relatively complex and new medical discoveries to life (and in layman's terms) -- the rhythm of his prose is great. The great mistifer in th ...more
Jap Hengky
Dec 20, 2016 Jap Hengky rated it really liked it  ·  review of another edition
The Hour between Dog and Wolf cogently argues that through biology-based techniques, traders can increase their self-awareness and develop much-needed skill in interpreting and controlling their exuberance, fatigue, anxiety, and stress. Handling risk and its attendant stress is a matter of mind and body working together. Coates urges, “Know thyself,” which today increasingly means knowing your biochemistry.
Leonidas Kaplan
Jul 05, 2014 Leonidas Kaplan rated it it was amazing  ·  review of another edition
The hour between dog and wolf: Risk taking, gut feelings and the biology of boom and bust
by John Coates

Let's talk about a story involving a financial manager who goes from seeing the trade that will let him print crazy amount of money, to winning a huge trade, to losing everything, to becoming helplessly lost.

Then we couple this with exactly what is happening in the body as these events unfold. We start with rapid, laser-focused calculations in the brain and body involved in a winning trade.

We v
...more
Carl Nelson
Jul 25, 2014 Carl Nelson rated it it was amazing  ·  review of another edition
An essential book for business and much more

Using financial traders as his example of how there is no distinction between our mind and body Coates carefully and clearly explains the biology of decision making and risk taking. And he masterfully argues that understanding the biology of risk taking has clear implications for how risk taking should be managed. For example he argues that Wall Street bonuses should be paid over at the turns of the business cycle instead of annually.
Most importantly t
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Julian Haigh
"Hormones may build up in the bodies of traders and investors during bull and bear markets to such an extent that they shift risk preferences, amplifying the cycle." Written by John Coates, a neuro-scientist and former Wall Street Trader, it requires no prior knowledge of the subjects and an interesting cross-consideration; that said, it is restricted in depth as a result.

The central premise of the book is that brains and bodies are revealed by modern neuroscience to be far more integrated when
...more
Uwe Hook
Mar 23, 2014 Uwe Hook rated it it was amazing  ·  review of another edition
The author is a former trader turned neuro-scientist and he explains how stress and hormones drive the behavior of traders, leading to irrational exuberance and well as irrational panic on the markets.

The interesting side of this book is how our physiology is influencing our decision-making, and how it can be contagious in a group. The book describes in minute detail the working of our nervous and hormonal system when we are faced with the stress of modern life.

If there is a proof that the ratio
...more
Phil
Apr 27, 2014 Phil rated it it was ok  ·  review of another edition
For some unexplained reason, I couldn't wait for this book to be over. I normally enjoy psychology books. And books about the trials and tribulations of investment could possibly be interesting as well. But for whatever reason, I couldn't get into this one. To boot, the author actually uses facts and data to back up his conclusions, which I thoroughly appreciate.

The only thing I can come up with that might have contributed to my lack of interest is that a large nubmer of the examples were ficti
...more
Ravi Warrier
Even though the sub-title of the book says, "Risk Taking, Gut Feelings and the Biology of Boom and Bust" and the book is written around the narrative of stock markets and traders, this book speaks of much more. It is, perhaps, the only book that I have read so far, that provides detailed anatomical, neurological and physiological processes of stress in general (in a non-textbook kind of way).

Many self-help books will tell you that a way to healthier living is to de-stress, providing you with few
...more
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“hubris syndrome. This syndrome is characterized by recklessness, an inattention to detail, overwhelming self-confidence and contempt for others; all of which, he observes, “can result in disastrous leadership and cause damage on a large scale.” The syndrome, he continues, “is a disorder of the possession of power, particularly power which has been associated with overwhelming success, held for a period of years and with minimal constraint on the leader.” 1 likes
“Yet of this massive flow of information no more than about 40 bits per second actually reaches consciousness. We are, in other words, conscious of only a trivial slice of all the information coming into the brain for processing.” 1 likes
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