As leveraged assets go down in value, the leverage multiples go up. Adding to that multiple is the falling dollar and the fact that these assets are in reality debt deposits, not cash deposits, that were passed on in different forms to be leveraged over and over.
Can increased hormone levels help your bottom line?
Thinking of juicing your portfolio? Try testosterone. A new study out of Britain shows how levels of two hormones, testosterone and cortisol, influence traders' level of success. For eight straight days, researchers measured how much testosterone traders were producing and correlated the findings with how well they performed in the markets.
The findings were clear—the more testosterone, the better the performance.
Cortisol, on the other hand, works to mitigate levels of stress. The study found that traders with greater levels of cortisol were more cautious when it came to taking big risks.
So does this mean that traders at Goldman Sachs (GS), JPMorgan Chase (JPM), or Lehman Brothers (LEH) should expect complimentary hormone therapy? Probably not. As John Coates, the author of the study, notes, "chronically high levels of steroids have a debilitating effect on the body."
Join Hoofy and Boo as they take a stab at bulking up their returns, with a few unintended consequences of their own.
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