November 7, 2005 Notes From Book called “The Tao Jones Averages.” Below you will see a quiz on right side versus left side brain tendencies. You will also see an interesting guide to selecting an investment manager.

Guidelines for selecting an investment advisor:

1. Insist on meeting with the individual who will be managing your account. It is often his judgment that will be the key ingredient in what happens to your portfolio, since in most investment organizations, investment recommendations are suggestions that the staff may or may not follow. This person’s judgment is the main thing you are paying for.

2. Ask what role personal judgment plays in the individual’s decisions, as well as the firm’s overall investment philosophy. Avoid those who use investment strategies that rely too heavily on mechanical methodology.

3. Avoid “investment scholars.” If an investment counselor is too articulate, if he creates a barrier of words you can’t understand, be careful: Conversely, if he or she is not unduly articulate and uses feeling and sensing words, look at this tendency as one indication of right-brained thinking.

4. Be sure your account is meaningful-to the investment manager. If your account is small, find a small-size management firm or your money will become only an account number on a computer printout. Big is not necessarily beautiful; having a large research staff not only does not guarantee good investment judgments, it often serves as a poor substitute.

5. Ask what mistakes the investment adviser and his firm have made. There is an ancient Chinese saying, “One disease, long life; no disease, short life.” If a person has had a disease, a warning, then he will take care of himself and increase the odds of living a long life. Likewise, if an investment adviser has not yet made major errors, be careful, as he or she is probably getting close to perfecting the art of going wrong with confidence–something you do not want someone to do with your money.

6. Don’t be overly impressed with investment firms that have had highly successful investment performance records within the recent past. You might be giving money to an organization that is so happily riding the last trend that they will be the last to admit when the trend is ending.

7. If your investment adviser plays golf, ask him what his handicap is. If it is under six, be careful; the chances are he is either lying or spending far too much time on the golf course.

8. Try to determine how whole brained the investment adviser’s philosophy and procedures are. Over the long run, balanced investing is the best investing.

9. Once you select an investment adviser, give him a fair chance. For the first five years the Dallas football franchise, under Coach Tom Landry, had losing seasons. Upset about negative fan reaction, one club official approached owner Clint Murchison about the unrest of the fans. Clint told the official to give Coach Landry a ten-year contract, as that should keep the fans quiet.

Left Side versus Right Side brain Dominance

1. The eyes are the only area outside our skulls which contain brain cells. Left field of eyes send messages to the right side of the brain, whereas the right field records images to the left side of the brain.

2. Each of us has a dominant side of the brain. The left brain oriented person is comfortable with linear step by step processes, and will carefully follow all steps of directions. A right brain oriented person is more apt to look at pictures and visualize the process. The right brain person is probably better at reading a map, versus a left brain person, who would rather have directions in text as opposed to map form. A left brain dominant person would prefer Algebra, whereas right brain dominant would prefer geometry.

The table below explains which occupations are right or left dominant. Dominance is the key word here. The book states that the most successful people are those that are balanced between right and left, and hence can integrate both traits into their lives.

The Hermann Occupational Profile


Left Brain Oriented Right Brain Oriented
Planners Policymakers
Lawyers Artists
Editors Poets
Technologists Sculptors
Writers Politicians
Bookkeepers Playwrights
Critics Musicians
Management Scientists Philosophers
Administrators Architects
Doctors Clowns
Authors Cartoonists
Tax experts Entrepreneurs
Researchers Dancers
Publishers Top Executives
Research Analysts Portfolio Managers


All of us prefer one hemisphere over the other when when we make investment decisions. Though such a preference may slight for some of us, in other cases the difference can be pronounced. In addition, we tend to operate in either a lower (limbic) or upper (cerebral) mode. The Herrmann Brain Dominance Indicator is designed to indicate your preference; this, in turn, can help you determine how to achieve more complete, whole-brained judgments:

Instructions: Based on your own self-assessment, rate yourself on each statement from a low of zero to a high of 25 points. Be as objective as you can in determining your rating. Be discriminating in your self-assessment. Do not give yourself points without merit. Do not hold back points that you do merit.


1. It is important to personally analyze the Performance of companies whose stocks I am-considering-for an investment.
2. Keeping detailed records of all my stock transactions improves the quality of my investment decisions.
3. Frequently the best market input is “gut feel.”
4. I pride myself on having a real “sense” of the market.
5. I base my investment decisions on historic correlations.
6. A key to investment success is careful planning.
7. It is the personalities of the corporate leaders that I pay close attention to.
8. As far as I am concerned, intuition is just as, if not more important, than factual data.
9. For me, it is facts and numbers and how they add up that count.
10. You don’t know whom to trust in this business.
11. I can’t explain my stock picks, they just feel right.
12. I like to be spontaneous about my investment decisions.
13. I want all the input I can get, there is never enough data
14. Certain disciplines are absolutely basic to investment success.
15. For me, the market is a live; living thing.
16. I can frequently anticipate the results of my investment decisions.
17. In this crazy investment world, there is only one way to win and that is to be as rational as possible.
18. To-me-organization is the‑key. Good organization and success go hand in hand.
19. Sometimes the reactions of my body tell me the direction to go.
20. There is a rhythm and pattern to the market that I can sense and rely on.


Fill in the score for each of the twenty questions in the appropriate group below, and then total:


1 2 4 3
5 6 8 7
9 10 12 11
13 14 16 15
17 18 20 19
Total Total Total Total
Points * Points * Points * Points *


Total Left Total Right
Percent Left Percent Right
  • NOTE: 1, 2, or 3 points are given depending on the total score for the subcategory. A total of 0 to 33 is given 3 points; 34 to 66, 2 points; and 67 or higher is award 1 point. Place the points in the appropriate space in the circular diagram below.


Score Theme Traits
Cerebral Left Facts Logical, quantitative, analytical, rational and sequential
Limbic Left Control Planning, organizational, Safekeeping, Conservative, Administrative
Cerebral Right Experimental Holistic, Synthesized, Creative, Conceptual, Experimental
Limbic Right Feeling Feeling, emotional, Interpersonal, Spiritual, Gut Reaction


Please keep in mind that these are interpretations from the book, and certainly not our advice.

If you scored evenly in all four quadrants, you are a balanced investor—a good sign. Keep investing, but be careful to maintain the balance. Be sure not to rely too much on other people who operate heavily in just one or two modes. If you are evenly balanced and score mainly in the “1: category, you have good company, as that is the profile of most corporate CEOs.

If you score heavily on either the left or right side; then you have a hemispheric imbalance. Knowing you bias can turn a weakness into a strength, as you should do well those things that fit your preference. To achieve whole-brained in investing, however, you need to offset your bias by interacting with others who have a complementary dominance.

Dominance of cerebral left and limbic right (facts/feelings) or of limbic left and cerebral right (experimental/control) is the most difficult profile for successful vesting. Herrmann’s research indicates that individuals with such profiles tend to be inconsistent in which mode they use. Rather than their brain halves complementing each other, they tend to compete; one side can gain only at the expense of the other (i.e., you can’t be experimental, and control at the same time, or simultaneously logical and emotional).

In the same way, one with a tendency to facts/feelings, cerebral left and limbic right, will also have oscillation problems. In addition, he/she is apt to become overly enthusiastic about someone who has all the facts and figures and make the mistake of betting on the “world’s smartest man.” As a result, he may end up without a financial parachute.