Communicator

32 COMMUNICATOR F E AT U R E S S O M E T I M E S W I N N I N G C A N B E A S dangerous as losing. Take James Altucher, blogger, podcaster and provocateur. Rewind to 1998 when Altucher had just sold Reset Inc., his web-design business, for $10 mil- lion. With his windfall he set out on a mis- sion to teach the stock market a lesson. His first trade? As he told us, he "poured all of his money" into a software company, the name of which he no longer remembers. But he does remember this: in one hour he made a cool million. That jackpot was proof of Altucher's genius. And he was primed to keep at it, going mano a mano against the market to make another million dollars every day for the rest of his life. That's what winning a million dollars in an hour does to you: it makes you cocky. Winning is biological, even hormonal. Doz- ens of researchers have studied the biologic- al effects of what actually happens to people when they win — tennis players who beat their opponents, chess masters who check- mate their rivals and traders who outwit the markets. Spoiler alert: it's testosterone — the hormone with a reputation for turning sweet young boys into hairy-chested, pugilistic, sex-crazed macho men. But there's much more to testosterone than that. Biologists have a name for the testoster- one-infused mentality that perpetuates a cycle of victory upon victory: the "winner effect." And it works like this. Two animals square off for a fight. Whether they are cich- lid fish, rhesus monkeys or humans, their T-levels rise, re-orienting their biological systems for the battle by increasing their strength, quickening their reaction times and reducing their fear. Then they go at it. And here's where it gets interesting: the T-levels of the winners spike, sometimes by as much as 1,000 per cent. And the losers? Their T-levels plummet by just as much. The next time the two face off, the winner, primed with testosterone, is much more likely to win. And the loser to lose. In other words, testosterone is the win- ner's elixir and has the effect of a "self- reinforcing upward spiral," according to John M. Coates, a senior research fellow in neuroscience and finance at Cambridge Uni- versity and former Wall Street trader. In his book, The Hour Between Dog and Wolf: How Risk Taking Transforms Us, Body and Mind, Coates writes about how testosterone not only flows more freely when we win, but in a happy feedback loop, transforms us biologic- ally and psychologically into cocky, self- assured people who are more focused, more willing to take risks and who have a belief in themselves and their ability to win and keep on winning. (Although women have signifi- cantly lower levels of testosterone and their biology of winning has been studied less frequently, much of the research indicates a similar effect albeit on a smaller scale: win- ning leads to more testosterone and more testosterone leads to more winning.) But winning is not always what it's cracked up to be. In the animal kingdom, writes Coates, "When testosterone reaches its high point the animal enjoys optimal perform- ance. It is in the zone. However, should tes- tosterone continue to rise, the animal's risk- taking becomes increasingly foolish," which is exactly what happened to Altucher. Not long after he had pulled off his million-dollar coup he bet all his money on another high- tech company with the rah-rah name Go America. He expected he'd keep making a million dollars a day. But all of that swagger and exaggerated belief in himself clouded his judgment. Before Altucher knew it, he had lost a million dollars. And then another mil- lion. And he kept losing. Just as there is biology to winning there is biology to losing. Call it the "loser effect." Not only did Altucher's testosterone likely drop, robbing him of confidence, motivation and energy, but another hormone kicked in – cor- tisol. A spike in cortisol has nearly the oppos- ite effect of testosterone, turning people into stressed-out irrational pessimists who panic and quit. Altucher recounts plummeting into an extended free fall as he nearly went broke. As we go through life, pursuing our dreams, whether we are business owners or middle managers, we face the same bio- logical roller-coaster ride. When things go well our biology responds. We all know what winning feels like – we're floating through the Elysian fields and we've just been told that we are the son or the daughter of the gods. And then, we might become overconfi- dent, even euphoric, believing we will keep winning, and our risk-taking becomes, as Coates says, "increasingly foolish." Accord- ing to Lord David Owen, a British politician and neuroscientist, winning or "possession of power which has been associated with overwhelming success" can lead to "hubris syndrome," a condition where repeated win- ning leads to "messianic zeal, excessive self- confidence, contempt for others, losing contact with reality and resorting to reckless- ness and impulsive actions." Winning and Losing: P R O D U C T I V I TY The science of success and ' failure ' b y C a m i l l e s w e e n e y a n d J o s h G o s F i e l d ©iStock / akindo

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