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| About Paul Kedrosky |
| Dr. Kedrosky is currently the Executive Director of the William J. von Liebig Center in San Diego, California. Using an innovative seed capital program, the Center catalyzes the commercialization of technologies from the internationally-ranked University of California, San Diego. Dr. Kedrosky is also a venture investor with Ventures West, Canada's largest institutional venture capital firm, where he is most active in consumer technologies and software. He is currently on the board of Marqui Corporation, a marketing automation software company. |
Recent Article:
If You're So Dumb, Why Aren't You Rich? Part II
- For more on Paul Kedrosky visit paul.kedrosky.com
About a year ago I cited a study showing the weak -- okay, nonexistent -- connection between wealth and intelligence. Here is the key chart from that study:
Just this week, however, I ran across a new, related study, one that comes to a different conclusion (sort of). The gist: In studying the trading performance of Finns (I know, I know) who had taken mandatory IQ tests the researchers found that higher IQ traders were better than lower IQ traders. In other words, smart people are better traders. Heresy!
Okay, okay -- there are lots of ways to become wealthy other than trading stocks, and trading stocks isn't even a very good way to generate wealth, so this isn't a refutation, per se, of last year's result. But that said, my experience in the markets is that while there are many, many smart people, some of the people who struggle the most are high-IQ sorts, with a tendency to over-think trading decisions.
(Speaking of which, there is a great book on this subject called Why Smart People Make Big Money Mistakes. Definitely read it, if you haven't already.)
Food for thought, and here's the study's abstract:
Abstract:
This study analyzes the role that innate intelligence plays in investors‘ behavior and equity trading performance. Equity trading data are combined with data from an intelligence test administered to every Finnish male in the mandatory military service. We document two channels through which intelligence affects equity trading performance: high IQ investors exhibit superior stock-picking skills relative to low IQ investors and low IQ investors display poor trade execution: they pay too much for immediacy and poorly monitor their limit orders which generates excessive adverse selection costs. Innate intelligence remains a significant determinant of behavior and performance even after controlling for investors‘ trading activity.
If Youre So Dumb Why Arent You Rich Part II - To learn more about this author, visit Paul Kedrosky's Website.
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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