The Psychology of Money - An Investment Manager\'s Guide to Beating the Market

235

CHAPTER

28

The Case for Intuition

The power of intuitive understanding will protect you from harm

until the end of your days.

—Lao Tsu

The notion of telepathy and investor groupthink brought to my

mind the phenomenon of the hundredth monkey.

The WHAT?

The “hundredth monkey” is a shorthand name for an observed,

documented event that occurred on the island of Koshima in the

1950s. Researchers on the island had dumped sweet potatoes on

the beach. The monkeys they were studying there had never en-

countered sweet potatoes before. Although they liked the taste, the

monkeys did not like the sandy coating that resulted from the

potatoes lying on the beach. Eventually, one monkey genius dis-

covered that she could clean the potatoes by washing them in the

sea. Other monkeys gradually learned or copied the process until,

finally, roughly 100 monkeys were washing their potatoes. Then,

quite suddenly, the entire troop caught on, as if some critical mass

had been reached. But more amazingly, researchers on other is-

lands reported that this threshold level must have triggered the

learning response in their monkeys as well, because the monkeys

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