Tuesday, February 24, 2009

THE PSYCHOLOGY OF MONEY, BUSINESS, AND SUCCESS

As a longtime observer, reporter, investigative journalist, it always does my heart good to see some of my earliest ideas and pronouncements reconfirmed in the events of today. Over and over again, we are seeing economists and commentators talk about how what is needed to bring America back to a state of fiscal responsibility and solvency is a new psychological attitude, that restoring confidence isn't so much about finance as it is about emotions. On the PBS News Hour last week, one of the few conservative pundits who always seems to make sense, David Brooks of The New York Times, had this to say on the subject:

"We call it an economic crisis, but it's a psychological crisis. People don't have trust in the banks, the banks don't have trust in each other; but, primarily, people don't have trust in the future. And if you don't have trust in the future, why should you invest, why should you spend? The problem is we have very few people who know how to marry economics and psychology."

This immediately reminded me of what I said about investing in stocks over thirty years ago in
MONEYLOVE:

"Most of the upward and downward swings of stocks have more to do with emotions than any change in the company's value. Investing your money on this basis would be like betting on whether an overworked executive was going to have a heart attack or nervous breakdown. Putting your money into a stock in the hopes that the majority of people will feel better about the economy a year from now than they do today is just plain dumb. You'd be better off going to the racetrack and picking horses at random."

There should be a basic rule of thumb when it comes to getting investment or business advice:
Anyone who tells you they know for sure that things are going to get better is lying to you.
The truth always has to do with your efforts producing the results you want, and can always be affected positively or negatively by circumstances outside your efforts. What often determines an individual's success in investing, in doing business, even in playing poker, is that person's ability to react swiftly and intelligently when things fall apart. It isn't always making the right decision so much as it is being capable of making a decision calmly and intelligently, and being willing to admit when things aren't happening the way you would like or had expected them to happen. This skill is what allows you to move forward with confidence, optimism, and momentum.
It really goes beyond whether you see the glass as half-full or half-empty, it's being able to
quickly clean up when the glass falls, breaking and spilling its contents all over your expensive carpet.

When I was in prison, there were two kinds of friends I had on the outside. One kind kept on commiserating with me, "How terrible it must be, Jerry. I couldn't handle it. Isn't there any way you can get out before your parole date?" The other kind kept telling me how amazed they were at how well I was doing, that I was an inspiration to them for overcoming adversity. In other words, the first group emphasized and kept their focus on how bad things were, the second group praised and drew attention to how well I was dealing with my circumstances.
Which group do you think was most supportive? And one group of people mostly stopped keeping in touch with me. Which group do you think that was?

And if you're an entrepreneur looking at what makes the most psychological sense today, you could do much worse than look back to the period so many observers and commentators are comparing to this current situation, The Great Depression, that started with the stock market crash of October, 1929. This was an economic nervous breakdown of epic proportions. The 1920s and 1930s have always fascinated me, and I've read extensively about both decades.

The Great Depression has become mythological in the minds of most people who never lived through it. It was terrible, but there was also a lot of camaraderie and commiseration and even joy as so many millions had the shared emotional experience of hard times. And some people with vision, strong emotional foundations, and maybe even some who did know how to marry economics and psychology prospered. So we could do worse than look at what succeeded when most other ventures were failing.

You know what historians found? The three growth industries during The Great Depression were chocolate, alcohol, and cigarettes! At the time, all three were "known" to be bad for you, one of them even started out the decade as illegal. Another big winner was lipstick, which may have been part of that old adage to put on a happy face when everything's going to hell. Of course, in recent years, chocolate--or at least dark chocolate--has been proven to be immensely beneficial to human health, as has some alcohol in moderation, like red wine. Cigarettes still kill, though back in history tobacco was sometimes used for medicinal purposes, and if it didn't contain many of the poisons put into it by humans and wasn't used in such destructive ways, it might someday be rehabilitated as chocolate has been.

So why were chocolate, alcohol, and cigarettes so popular that people bought all three in ever-increasing numbers though money got tighter and tighter? Well, the same dynamic is happening right now. People are giving up major luxuries, so small pleasures are even more precious to maintain. And all three products make you feel better, have a positive effective on the emotions. But dark chocolate made from raw, unprocessed cocoa powder is the only one that has no physical or psychological downside.

So in difficult, stressful, depressing times, people reach for chocolate, and a great tasting chocolate is a mood elevator in and of itself. Scientists and psychologists even argue about whether it's the sensual sensory experience of seeing, smelling, and tasting delicious chocolate, which then releases the feel-good hormone serotonin in the brain--or the mood-enhancing chemicals actually contained in cacao. These include phenylethylamine or PEA, which is often called "the love chemical." PEA is found in higher levels in the brains of happy people and has been found to reverse the symptoms of depression in 60% of people who ingest it.

Then there's anandamide, which is often called "the bliss chemical." A neuroscientist, Daniele Piomelli, discovered it in chocolate in 1996. It's very name comes from "ananda" a Sanskrit word meaning "bliss." Love and bliss, no wonder chocolate defies economic downturns!

And there's lots more, scientists don't even know all the positive effects of the hundreds of chemicals contained in the cacao bean. But, amazingly, no negative effects have been found. And the closer to that raw bean, as with raw, unprocessed cocoa powder, the more these effects are to be found. A third substance in chocolate is the essential amino acid tryptophan, an important precursor for the brain's production of serotonin. Is it any wonder a leading scientist has called chocolate the "last legal drug?"

In prison, I found very few inmates willing to admit they were "drug addicts." But here in the outside world, no one seems to mind confessing to being a "chocoholic," myself included, though I sometimes use the more accurate term, "dark-chocoholic."

And remember, during The Great Depression, chocolate was thought to make you gain weight, rot your teeth, and produce acne. All of which have been disproven in many research studies.
In fact, healthy dark chocolate combats obesity and is a great appetite suppressant, contributes to healthy gums, and the antioxidants are wonderful for the skin.

The only thing that could probably make chocolate more popular than it is now would be if the the government declared it too intoxicating and made it illegal. In the meantime, it is not only an anti-depressant, but a new term I just invented--an "Anti-Recessionant." And if chocolate isn't your thing,  just use it as a metaphor and find something else that makes people feel good in bad times. The time is ripe.
                                                          Jerry

If you would like to find out if you are a good fit for the team I am putting together right now to market healthy dark chocolate and laugh all the way to a bank that hasn't failed, get in touch at jerrygillies@gmail.com You can also check out the short video at:
https://www.alphasonics.com/healthy-chocolate.htm




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