No, it's not very complimentary, even if true: A former Goldman Sachs trader calls it a "lizard" brain, a French marketing guru generalizes it's your "reptilian" brain and up at Harvard there's a wise-guy professor who refers to the investor's primary decision-making tool in even less flattering terms — "Rat" brain!

Lizard? Rat? Reptilian? Get a grip, gentlemen, you sound more like mean-spirited politicians than members of America's elite institutions and academies. But we get the point. You're talking about our primitive brain, which research proves is a very bad tool for making investment decisions.

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Yes, you heard right: Your brain is handicapped, a saboteur costing you big money. In "Mean Markets & Lizard Brains," former Goldman trader Terry Burnham says our primitive brain was designed to help our ancestors hunt for food, daily survival stuff.

But "by its very nature, investing requires us to be forward-looking, to anticipate events. Our lizard brains, however, are designed to look backward. Thus, the lizard brain causes us to be optimistic at market peaks (after rises) and to be pessimistic at market bottoms (after falls)." So whether it's optimism or pessimism, greed or fear, emotions do our trading, not reasoning.

And it's not just you. The best and the brightest are also trapped by this saboteur, their primitive brains. There's a great story in SmartMoney magazine, "Outsmarting Your Brain:"

Harvard Business SchoolProf. Max Bazerman was speaking to a conference of 75 Wall Street big shots, guys commanding six- to seven-figure incomes for managing your money. Bazerman opened by auctioning off a $100 bill. Simple rules: The highest bidder gets $100. And the second highest pays what he bid, but gets nothing. Forty hands quickly pushed the bidding to $95. Then an institutional money manager and a pension-fund trustee broke the $100 barrier, where both were guaranteed losers.

Imagine: Two of America's financial geniuses caught up in a hotly contested duel, pushing the bids up, up, up ... to $465! Bidding $465 for a $100 bill!

If you've ever doubted that investors are dominated by an irrational rat brain the professor adds this scary observation: "I've played this game perhaps 600 times, and I've never seen the bidding stop below $100." Yikes! The best and brightest managing our $8.3 trillion mutual fund industry are just as irrational as the rest of America's 95 million average folks who trust them with their money.

The blind are leading the blind! We are all playing the stock market game like rats and lizards chasing around in a maze for cheese ... while telling ourselves we're rational.

Folks, our brains are our own worst enemies. Here's Burnham's summary: "We need to precisely restrain our instincts in order to make money. Unlike neutral games of chance, or ancestral problems like gathering and hunting, financial success means suppressing our 'gut' instincts." Here are his eight rules to restrain this saboteur.

1. Don't trade emotionally, unless you're Tom Cruise

Actually, he's referring to Tom's role as Maverick in the film, "Top Gun." Movies keep our myths alive. In fantasies we cheer the superiority of our gut instincts as the hero shoots down enemy jets, winning a great battle in the final scenes. But c'mon folks, get real, it's just a movie. In real life Tom is just little irrational Tommy jumping on Oprah's couch. So when you're on Wall Street's couch: "Trade as little as possible."

2. Never trust anyone, not even yourself

The rest of Burnham's warnings all emphasize this "new science of irrationality." You never trade impulsively on tips, from your barber, best friend, broker or your lizard brain: "Always include a significant delay between an investment idea and an actual trade.

3. Losers average losers

Remember: "Even great and experienced traders must fight the impulse to hang onto and average into losers." Get out. The lizard brain hates losing, hangs on and loses (again).

4. Do not dollar cost average

This rule applies to trading individual stocks. Less so when adding to a diversified portfolio as part of a regular savings program. But traders listen up: "While dollar-cost averaging works in bull markets, it is not profitable in long-term declines."

5. Do not open your mutual fund statements

Actually Terry's talking about turning off cable TV, ignoring all news. By the time you get the news, it's too late, there's no trading value. Worse yet, your lizard-rat brain will make the mistake of reading something into random news, compounding your mistakes.

6. Spin control for yourself

Translation: Lizards and rats hate to lose, but since they can't focus on the big picture or the future, they're destined to lose anyway. They're accident-prone when it comes to investing. Solution: Focus on your overall portfolio, and don't tinker with it.

7. When to go all in

Translation: Remember "The Gambler" song, by Kenny Rogers: "You gotta know when to hold 'em, when to fold 'em." You also gotta know when to go "all in" (bet everything). Which is rarely. But the hyperactive rat-lizard brain still does it. Unfortunately, when you're in the Wall Street casino, fighting to survive against thousands of professional rats, lizards and other hostile animals who want to pick the meat off your carcass every day ... maybe you ought not be in that casino.

8. Do not get the key to the minibar

Translation: Cheap discount trades make irrational trading too easy, like hotel minibar keys that make it easy to spend $10 for a small package of cashews. So "those who trade too much should arrange their finances so that impulsive trades are not possible. Remove temptation: do not expect to resist it." His solution: He puts the bulk of his family's assets with a full-service broker who charges a whopping $100 a trade. Here's my solution. Stop trading altogether, stop rebalancing ... turn off your primitive brain by building a passive, lazy portfolio. Check out lazy portfolio results.

But as soon as I say that, my psychic brain hears all the rat-lizard brains out there conspiring to eat the wiring in my computer, then go hunting for their next meal at the Wall Street casino. Their primitive brains are convinced that with the right tips they'll go "all-in" and finally beat The Street's best-and-the-brightest rodents and reptiles. So they tune me out, convinced I couldn't possible understand their unique brand of instinctual "Maverick" genius.

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So they'll continue jumping up and down on Oprah's couch like an irrational child (metaphorically, of course), proving again and again that the investor's primitive brain really is a saboteur.

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