Paradigm Lost: The Psychology of Money and Investing

by F.J. Chu

Paradigm Lost and the New Investment Landscape The great American bull market of the last two decades has held forth an implicit promise to investors – the promise of a sort of financial paradise on earth. That promise of an unprecedented opportunity for earned and unearned riches has engaged the deepest beliefs, loyalties and passions of investors. The ensuing years of economic prosperity engendered a faith in a new paradigm in the financial markets, one that paralleled the society’s embrace of a New Economy. This faith in the transforming powers of microprocessors, fiberoptics, digital technology and abundant bandwidth in ushering in a new era bordered on a kind of religiosity. The degree to which our society has been inculcated with the promise of a new paradigm is evident by the extent personal investing has become our new national passion. The spell cast by Wall Street, and subsequently reflected off the images of the newly rich, has infiltrated virtually every strata of our culture. But have the rules of the New Economy also changed the age-old rules of money and investing? Have the remarkable innovations of technology and the seductions of material abundance altered what we think about money and how it makes us behave? Or after several centuries of it, is the stock market still just an intricate system requiring knowledge, intuition and luck? In his prior book The Mind of the Market, F. J. Chu boldly set forth a philosophy of mind for the financial mind. Using a combination of market savvy, psychological insight and philosophical reflection that is his trademark, Chu now takes the reader into the bizarre and terrifying heart of “the great game” - where the players concoct a strange brew of mathematics, market timing, and investor sentiment to outsmart the competition. He poses the “Are we still riding the arc of a rising curve leading us out into the Digital Age? Or is the wheel about to arrive full circle yet once again?”

128 pages, Paperback

First published January 1, 2001