The Hour Between Dog and Wolf: How Risk-Taking Transforms Us, Body and Mind

By John Coates

A successful Wall Street trader turned Cambridge neuroscientist reveals the biology of financial boom and bust, showing how risk-taking transforms our body chemistry, driving us to extremes of euphoria or stressed-out depression.
 
The laws of financial boom and bust, it turns out, have a lot to do with male hormones. In a series of startling experiments, Canadian scientist Dr. John Coates identified a feedback loop between testosterone and success that dramatically lowers the fear of risk in men, especially young men; he has vividly dubbed the moment when traders transform into exuberant high flyers "the hour between dog and wolf." Similarly, intense failure leads to a rise in levels of cortisol, which dramatically lowers the appetite for risk. His book expands on his seminal research to offer lessons from the exploding new field studying the biology of risk.
 
Coates's conclusions shed light on all types of high-pressure decision-making, from the sports field to the battlefield, and leaves us with a powerful recognition: to handle risk isn't a matter of mind over body, it's a matter of mind and body working together. We all have it in us to be transformed from dog to wolf; the only question is whether we can understand the causes and the consequences.

• Language: English
• Publisher: Random House Publishing Group
• Release date: May 15, 2012
• ISBN: 9780307359698

John Coates

John Coates is a senior research fellow in neuroscience and finance at the University of Cambridge. He previously worked on Wall Street for Goldman Sachs, and ran a trading desk for Deutsche Bank. In 2004 he returned to Cambridge to research the biology of financial risk-taking. His work has been published in the Proceedings of the National Academy of Sciences and the Financial Times and been cited in the New York Times, Wall Street Journal, The Economist, New Scientist, Wired and Time.

Reviews for The Hour Between Dog and Wolf

[mbmackay · Rating: 3 out of 5 stars]

The author is a former bank trader, now a physiology researcher. He considers the impact of physiology on the performance of traders. He applies the "winner's effect" of successful harem breeders such as walrus and seals, to the activities of traders - when on a successful roll they get high doses of testosterone, feel invincible, and end up taking unreasonable risks, which results in erratic ups and downs in their performance. He also examines the corollary, where a traders undergoes prolonged stress during a downturn, and how the impact of stress on the body leads to excessive risk aversion. Amazing stuff. Clearly the application of these insights goes far beyond bank traders, but that field is the author's background and it makes for a highly topical book. Read December 2014

[the_hibernator · Rating: 4 out of 5 stars]

In this Wellcome Trust shortlisted book, Coates describes his research into the feedback loop between testosterone and success in the financial market. When a person has high levels of testosterone, they are prone to risk taking - which generally promotes the market; however, success raises their testosterone levels, which increases their risks and creates bubbles (like the dot-com bubble) which are unnatural and eventually pop. Loss of money leads to decreased testosterone levels and release of stress hormones - which, if sustained for long periods of time can lead to a depressed, risk-averse market. This is when the government should step in and perk up the market themselves. (You can probably guess Coates' politics from that statement, but the book is generally apolitical.)I found Coates' research quite fascinating, and his writing was engaging to someone who's interested in the topic. I, unfortunately, am not generally interested in finance and so my attention wavered a bit during the finance-heavy bits. But the book was written in an approachable way such that I (who know nothing of the matter) could understand the financial/market bits and that someone who knows very little medicine could understand the science bits. In fact, it was shortlisted for the Wellcome Trust Book Prize because because it makes medicine approachable to the general population. For anyone interested in how hormones/neuroscience/psychology can affect the market, this would be an excellent book to pick up. An easy and interesting read.

[gbsallery · Rating: 5 out of 5 stars]

This is an outstanding book: well-written, informative and deeply engaging. It provides a summary of the latest research into the physiological effects of stress and risk-taking, with particular reference to financial markets. The picture it paints is absolutely compelling, and should be read by anyone who works with (or near) bank traders of any kind - the managers of those traders should be particularly interested!