“Biology, training and profit sharing make best traders - PhysOrg” plus 4 more |
- Biology, training and profit sharing make best traders - PhysOrg
- Elementary students learn - Eastern Arizona Courier
- Local People: Rock River Valley residents earn honors - Rockford Register-Star
- Monogamy isn't easy - Juneau Empire
- Blocking biofilms: Alzheimer's research sheds light on potential ... - PhysOrg
| Biology, training and profit sharing make best traders - PhysOrg Posted: 25 Nov 2009 03:25 AM PST Biology, training and profit sharing make best tradersNovember 25, 2009 (PhysOrg.com) -- Cambridge researchers have identified a group of traders consistently able to outperform the market, even during the credit crisis. The study by John Coates and Lionel Page of the University of Cambridge offers a rare glimpse into how biology, experience and compensation schemes work together to make a profitable and - crucially - a prudent risk taker. The study, published in the open-access journal PLoS ONE, builds on previous research by Coates and colleagues that found higher levels of testosterone, in both the male foetus and the adult, predicted higher profitability among so-called 'high frequency' traders. It also casts doubt on the Efficient Market Hypothesis. In the current study Coates and Page examine a more subtle measure of performance than profits - a trader's Sharpe Ratio. This is the ratio between how much money a trader makes and the amount of risk taken in making that money. According to Dr Coates, who previously ran a trading desk on Wall Street: "A trader making $100million would normally be considered a star, but not if the trader could just as easily have lost $500million. A trader's Sharpe Ratio is a better measure of skill than profits alone because it would expose this trader as reckless." The authors calculated the Sharpe Ratios for 53 male high-frequency traders in the City of London. These are traders who buy and sell futures but hold their positions for only seconds or minutes. They then compared the traders' ratios for the period 2005-07 with the Sharpe Ratio of the Dax, the German stock market and the traders' benchmark index. They found that experienced traders in the study group (those trading for more than two years) had an average Sharpe of 1.02, significantly higher than the Dax, which averaged 0.53 during the same period. Importantly, in a follow-up they ascertained that the experienced traders performed on average even better during 2008, a year in which many traders at other banks and hedge funds lost more money than they had made in the previous five years. The out-performance of these traders is unlikely to be due to chance, say Coates and Page, because they also found that the Sharpe Ratios of these traders increased significantly the longer they had traded, indicating that they were learning to be more prudent risk takers.
The study casts doubt on the Efficient Market Hypothesis, which has over the past 20 years encouraged a laissez-faire attitude to the financial markets. According to this hypothesis the markets are random, so no one can consistently achieve a higher Sharpe Ratio than the broad market, and no one can improve at trading, just as no one can improve at flipping coins. The experienced traders in this study, however, were outperforming the market and were learning, implying that markets are not in fact efficient. The study also sheds new light on Coates' previous finding that a surrogate measure of pre-natal testosterone exposure, the second to fourth finger length ratio (2D:4D), predicts a high frequency trader's lifetime profitability. Coates and his colleagues could not say at that time if testosterone was affecting the amount of risk taken by the traders or the amount of money they made per unit of risk, i.e. their skill. They now find that 2D:4D does not predict Sharpe Ratios. Coates, now a research fellow in neuroscience and finance, says: "It seems testosterone affects the amount of risk traders take but not their skill." The study has practical implications for banks and hedge funds which need to know, when allocating capital and bonuses, whether a trader's performance is due to skill or luck. "Our study suggests a novel way of remunerating traders. Banks could use an improving Sharpe Ratio over time as a measure which reliably indicates a trader has developed a skill worth paying for," says Coates. By paying bonuses on profits alone, however, the banks and hedge funds may have encouraged traders to maximize their risk, rather than Sharpe Ratios.
The study shows how biology and management can work together. Traders are risk takers so need a high tolerance for risk, a trait predicted by a measure of prenatal androgen exposure. "However, this trait, like height or speed in sports, may count for little without proper training and the right incentives. In trading, as in sports, biology needs the guiding hand of experience," he concluded. More information: Coates JM, Page L (2009) A Note on Trader Sharpe Ratios. PLoS ONE 4(11): e8036. doi:10.1371/journal.pone.0008036 Provided by University of Cambridge (news : web) This content has passed through fivefilters.org. |
| Elementary students learn - Eastern Arizona Courier Posted: 25 Nov 2009 06:53 AM PST This content has passed through fivefilters.org. |
| Local People: Rock River Valley residents earn honors - Rockford Register-Star Posted: 25 Nov 2009 08:40 AM PST Fareed Guyot of Rockford has given more than 200 young people a free demonstration airplane ride as part of the Experimental Aircraft Association Young Eagles program. The Rockford Cosmopolitan Club elected new board members for 2009-2010: Matt Armstrong, president; Rick Swansbro, president-elect; Tom Grimes, vice president; Dayton Smith, treasurer; Gil Pena, secretary; Tom Etier, sergeant-at-arms; Don Cuppini, past president. At-large board members include Brian Lindsay, John Dennis, Jeff Hartle and Pat Morrow. Jonathan Balsman of Roscoe was accepted to Concordia University, St. Paul for the fall 2010 semester. Balsman was awarded the President's, Lutheran Heritage and Church Vocation scholarships. Riley Bushman, Vincent Guzzetta, Anna Hartz, Michael Madaus, Kelsey Mathieu and Thomas McGinniss of Hononegah Community High School were named Commended Students in the 2010 National Merit Scholarship Program. Andrea Guzzetta was named to the president's list of the Milwaukee Institute of Art and Design for outstanding academic performance during the spring 2009 semester. She is the daughter of Robert Guzzetta of Rockford and John and Lori Vihnanek of Rockton. Sarah Rebarcak of Princeton graduated from the Educators of Beauty school and is eligible to take the Cosmetology State Board Examination and become a licensed cosmetologist. Danielle Folk, daughter of James and Amy Folk of Winnebago, is a member of the 2009-10 Illinois College dance team. The Illinois Art Education Association named Eric Donaldson of Pecatonica High School the 2009 Art Educator of the Year. This award recognizes his outstanding commitment to visual art education and contributions in the northern Illinois region. Laura Overmyer of Byron was accepted to the highly selective University of Illinois College of Veterinary Medicine. Overmyer is a sophomore biology major at Augustana College. She attended Byron High School, and is the daughter of Mark and Mary Beth Overmyer. This content has passed through fivefilters.org. |
| Monogamy isn't easy - Juneau Empire Posted: 25 Nov 2009 07:50 AM PST Right-wing pro-marriage advocates are correct: Monogamy is definitely under siege. But not from uncloseted polyamorists, adolescent "hook-up" advocates, radical feminists, Godless communists or some vast homosexual conspiracy. The culprit is our own biology. Researchers in animal behavior have long known that monogamy is uncommon in the natural world, but only with the advent of DNA "fingerprinting" have we come to appreciate how truly rare it is. Genetic testing has recently shown that even among many bird species - long touted as the epitome of monogamous fidelity - it is not uncommon for 6 percent to 60 percent of the young to be fathered by someone other than the mother's social partner. As a result, we now know scientifically what most people have long known privately: that social monogamy does not necessarily imply sexual monogamy. In the movie "Heartburn," the lead character complains about her husband's philandering and gets this response: "You want monogamy? Marry a swan!" But now, scientists have found that even swans aren't monogamous. (Nor are those widely admired emperor penguins, whose supposed march to monogamy was misconstrued from another popular movie; their domesticity lasts only for the current breeding season - next year, they'll find new mates.) For some, findings of this sort may mitigate a bit of the outrage visited on the current and future crop of adulterers du jour, recently including but assuredly not limited to Eliot Spitzer, Mark Sanford, John Ensign and John Edwards. For others, it simply shows that men are clueless, irresponsible oafs. The scientific realty, however, is more nuanced, and more interesting, especially for those looking to their own matrimonial future. First, there can be no serious debate about whether monogamy is natural for human beings. It isn't. A Martian zoologist visiting planet Earth would have no doubt: Homo sapiens carry all the evolutionary stigmata of a mildly polygamous mammal in which both sexes have a penchant for occasional "extra-pair copulations." But natural isn't necessarily good. Think about earthquakes, tsunamis, gangrene or pneumonia. Nor is unnatural bad, or beyond human potential. Consider writing a poem, learning a second language or mastering a musical instrument. Few people would argue that learning to play the violin is natural; after all, it takes years of dedication and hard work. A case can be made, in fact, that people are being maximally human when they do things that contradict their biology. "Doing what comes naturally" is easy. It's what nonhuman animals do. Perhaps only human beings can will themselves to do things that go against their "nature." And finally, even though anyone aspiring to genuine monogamy will, on balance, have to swim upstream against the current of his or her evolutionarily bequeathed inclinations, there are also considerable biological forces supporting such efforts. Some animals manage to be monogamous. California mice (Peromyscus californicus), for example, pair up and remain paired, forsaking all others, largely because of the payoff derived from having two parents to care for offspring. Beavers establish lasting pair-bonds that enable them to cooperate in building a valuable, complex home site. The Malagasy giant jumping rat has evidently made the jump to monogamy because of the predator-fighting benefits thereby provided. And among pygmy marmosets, monogamy gives males unconscious confidence of their paternity, which in turn supports their inclination to be unusually paternal. And human beings? Our species benefits greatly from bi-parental care. We can profit from shared, reciprocated effort, especially when we're confident both partners will be around for the long term. In addition, human beings are endowed with an array of hard-wired traits that can be used to strengthen monogamy, among them a penchant (perhaps even a need) to attach and connect so-called mirror neurons that underlie empathy; hormonal systems, such as those involving oxytocin and vasopressin, that relate sexual satisfaction to pair-bonding; and neural plasticity that promotes the strengthening of brain circuits associated with repeated reward mechanisms - including, in all likelihood, those activated via interactions with the same individual. Add to this the fact that people have big brains, and hence, an ability to rescue monogamy from monotony, as well as the capacity to imagine the future and a visceral dislike of dishonesty, and the effect of biology on monogamy becomes complex indeed. Not to mention the adaptive significance of that thing called love. To be sure, monogamy isn't easy; nor is it for everyone. But anyone who claims that he or she simply isn't cut out for monogamy misses the point: No one is. At the same time, no one's biology precludes monogamy either. As Jean-Paul Sartre famously advised (albeit in a different context): "You are free; choose." • David Barash, an evolutionary biologist, is a professor of psychology at the University of Washington; his most recent book - co-written with Judith Eve Lipton - is "Strange Bedfellows: The Surprising Connection Between Sex, Evolution and Monogamy." This content has passed through fivefilters.org. |
| Blocking biofilms: Alzheimer's research sheds light on potential ... - PhysOrg Posted: 25 Nov 2009 06:45 AM PST Blocking biofilms: Alzheimer's research sheds light on potential treatments for urinary tract infectionsNovember 25, 2009 By Michael Purdy(PhysOrg.com) -- Research into Alzheimer's disease seems an unlikely approach to yield a better way to fight urinary tract infections (UTIs), but that's what scientists at Washington University School of Medicine in St. Louis and elsewhere recently reported. One element links the disparate areas of research: amyloids, which are fibrous, sticky protein aggregates. Some infectious bacteria use amyloids to attach to host cells and to build biofilms, which are bacterial communities bound together in a film that helps resist antibiotics and immune attacks. Amyloids also form in the nervous system in Alzheimer's disease, Parkinson's disease and many other neurodegenerative disorders. To probe amyloids' contributions to neurodegenerative diseases, scientists altered potential UTI-fighting compounds originally selected for their ability to block bacteria's ability to make amyloids and form biofilms. But when they brought the compounds back to UTI research after the neurology studies, they found the changes had also unexpectedly made them more effective UTI treatments. "Thanks to this research, we have evidence for the first time that we may be able to use a single compound to impair both the bacteria's ability to start infections and their ability to defend themselves in biofilms," says senior author Scott J. Hultgren, Ph.D., the Helen L. Stoever Professor of Molecular Microbiology at Washington University. The findings were reported online in Nature Chemical Biology. The National Institutes of Health has estimated that over 80 percent of microbial infections are caused by bacteria growing in a biofilm, according to Hultgren. Scientists in Hultgren's laboratory have worked for decades to understand the links between biofilms and UTIs. "UTIs occur mainly in women and cause around $1.6 billion in medical expenses every year in the United States," says co-lead author Jerome S. Pinkner, laboratory manager for Hultgren. "We think it's likely that women who are troubled by recurrent bouts of UTIs are actually being plagued by a single persistent infection that hides in biofilms to elude treatment." Co-lead author Matthew R. Chapman, Ph.D., now associate professor of molecular, cellular and developmental biology at the University of Michigan, was a postdoctoral fellow in Hultgren's lab in 2002 when he discovered that the same bacterium that causes most UTIs, Escherichia coli, deliberately makes amyloids. The amyloids go into fibers known as curli that are extruded by the bacteria to strengthen the structures of biofilms.
To treat UTIs, Hultgren's lab has been working with Fredrik Almqvist, Ph.D., a chemist at the University of Umea in Sweden, to develop compounds that block bacteria's ability to make curli, disrupting their ability to make biofilms and leaving them more vulnerable to antibiotics or immune system attacks. Almqvist recently suggested altering a group of the most promising curli-blockers to see if they could also block the processes that form amyloids in Alzheimer's disease. The alterations worked: In laboratory tests, the new compounds prevented the protein fragment known as amyloid beta from aggregating into amyloid plaques like those found in the brain in Alzheimer's disease. When scientists took the new compounds back to a mouse model of UTIs, though, they received a surprise. The altered compounds were better at reducing the virulence of infections, inhibiting not only curli formation but also the formation of a second type of bacterial fibers, the pili. "Pili aren't made of amyloids, but they are essential to both biofilms and to the bacteria's ability to initiate an infection," Hultgren says. Hultgren and colleagues are already developing even more potent infection and amyloid fighters, screening a library of thousands of chemicals similar to the most promising compounds from the study. Chapman cautions that it's too early to tell which, if any, of the compounds will be helpful in treating neurodegenerative diseases. "Much neurodegenerative drug development has focused on ways to break up amyloids or prevent them from forming, but because amyloids may also be an important part of normal cellular physiology, we need to identify molecules that will target only the toxic amyloid state," he says. More information: Cegelski L, Pinkner JS, Hammer ND, Cusumano CK, Hung CS, Chorell E, Aberg V, Walker JN, Seed PC, Almqvist F, Chapman MR, Hultgren SJ. Small-molecule inhibitors target Escherichia coli amyloid biogenesis and biofilm formation. Nature Chemical Biology. Provided by Washington University School of Medicine in St. Louis This content has passed through fivefilters.org. |
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