Proof that losing money really is scary

Great find, Steven.

Whenever I read about these studies, I have to wonder just how mild the shock is – and who gets to decide if it's mild, the subject or the observer? Scientists get to do the cruelest things.

But, seriously, it's an interesting study. Unfortunately, the article seemed most concerned about the fact that it might explain why some people making such financial decisions develop anxiety disorders. Is that really the biggest implication?

Millions of people make decisions and are told on a daily basis (by a little ticker) whether they won or lost today – and the most important insight into psychology is explaining why a certain group of people develop anxiety disorders? May I suggest a more important insight, if losing money really is painful, and the old adage "once bitten, twice shy" is true, what does that say about millions of individual investors' reactions to a drop in stock prices.

The New Dictionary of Cultural Literacy explains that "once bitten, twice shy" means that "an injury makes a person wary of its cause". So, I'm guessing those who play the market and lose tend to stay out of the market, and those poor people who get shocked by scientists tend to stop volunteering for such studies. But, in both cases, it's just a guess.