allels between this and life. Like a speculator deciding onthe level of risk he should take on a trade. It’s important to strike a balance, andnot hold too tightly to things, be they our beliefs and ideas or our wealth. It is alsoimportant not to leave things too free so that you find yourself with no control. Itis important to use experience and science in order to set this balance, to give thefishing line a jerk to see if it feels right.
How Can You Say Such Awful Things about Alan Greenspan?Most people we talk to disagree with us strongly about our characterization ofFed Chairman Alan Greenspan as an old-hearted, destructive villain whocaused the 2000–2001 market crash. But that is only half of the story. Wealso think he was, albeit unintentionally, a part of the meme that led to theWorld Trade Center attack.
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We are well aware that the “doctor” is regarded in most circles as a herofor popping the Nasdaq bubble. Few sympathize with our complaint that hisactions amounted to an outrageously hubristic attempt to surreptitiously influence the stock market. To us, his actions were the more objectionable inthat they were made with full knowledge that the public would erupt inprotest if the intent were spelled out.Was there excess and fraud in the Nasdaq’s rise? To be sure. Yet left to itsown devices, the market has a remarkable ability to take care of its own bubbles without help from central planning authorities. Many of the more outlandish Internet shooting stars already had crashed to earth on their own.Investors would undoubtedly have adjusted their expectations for telecommunications and computer shares as the capital-spending boom that propelledthem to the heights in 1999 had its inevitable denouement.The Fed’s intervention allowed an antimarket, antitechnology meme toflourish. Naysayers who had been bearish throughout the 1990s suddenly hadtheir day. As the Internet journalist Andrew Orlowski wrote in another context:Look into the pubs of England—for every Mark E. Smith, who channeled his hateinto creating fabulous new vistas of satire, there are ten thousand bitter men whohate anything young or beautiful or talented, because it reminds them of theirown failure of courage.6
The result was the first recession in a decade and the worst sustainedmarket decline in a generation. The telecommunications equipment companies that had lent money to Internet firms for purchasing their productscollapsed, creating a positive feedback loop that contributed to the poisonedatmosphere.And the United States suddenly found itself at war with a group of Islamic fanatics seeking to abolish religious and economic freedom. This, wesuggest, was not entirely a coincidence. The link may seem outrageous. Butconsider what the Mideast primitives represent themselves to be. They userhetoric from the Crusades of 1,000 years ago. They wish to destroy Americancapitalism. They inculcate their children with an intolerant, backward creedand a suicidal mission to destroy all Americans, civilian or military, whereverthey are found.From the primitive perspective, it is sensible to make war on capitalist society. People free to act in their own economic interest dare to prize libertyabove obedience to dictators. They take the indeterminate future and the openskies over the totalitarian’s promises of economic certainty or a certain eternity. The very values that primitives worry will destabilize their controlled social hierarchies are fundamental to our system.
360 Practical SpeculationToday’s primitives have a long pedigree. They are part of a history that includes the Catholic Church’s resistance to the 1543 discovery by Copernicusthat the earth is not the center of the universe. The common thread is an aversion to change and examination of the premises of the ruling elite. Invokingtheology and nostalgia, the primitive seeks control through regulation andtheocratic authority. Primitives are, inevitably, anticapitalist, because theyseek to maintain power and stasis. In a market society, few trends survive;only free thinking and risk taking are rewarded. The market allocates capitalthrough the decisions of millions of people acting independently in their owninterest. Repressive societies, with their nationalism, tribal wars, official religion, and lumbering political ideologies, have no marketplace. Instead, suchstates attempt to control the distribution of resources, manpower, ideas, andgoods. The result is a static, illiquid market; goods are allocated not by supply,demand, and the mediating mechanism of flexible prices, but through corruption and the black market.Primitive thinking characterizes all reactionary response to the development of technology. As Jacques Barzun remarks in From Dawn to Decadence,primitivism is a “disaffection from science and technology” running parallel tothe development of Western culture throughout the centuries.7 In the 1990s,the performance of the fast-moving technology companies of the Nasdaq defined our understanding of risk. Tech companies typically pay no dividend andoffer little certainty, but their pursuit of new technologies made them magnetsfor risk capital. Low-risk, low-return “old technology,” “defensive,” “brick-andmortar” companies—makers of carpets, ketchup bottles, and soda pop—suffered in this young-hearted period of technological expansion. After theNasdaq sank, old-economy, low-return investment strategies were dusted offand once again seized the imagination of Wall Street.Some of today’s primitivist manifestations promise to restore a bond between humans and nature by abolishing Western technology and markets. Islamic terrorism represents a new twist—a medieval mentality that parasiticallyadopts Western technology, markets, and openness in order to destroy them.The World Trade Center terrorists had e-mail, flew planes, lived in middle-classFlorida suburbs, ate pizza, frequented strip bars, and shopped at Wal-Mart.These terrorists seemed disturbingly American, and yet despite the pattern ofmiddle-class consumption, they saw themselves as martyrs in a holy waragainst the United States.The premise of U.S. immigration policy has long been that the poor,tired, and suffering, presented with the opportunity for material gain anda decent life, will shed Old World prejudices and embrace American
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democratic culture. This is the idea behind the Latin phrase written on everycoin and every dollar bill produced by the U.S. mint: e pluribus unum, theidea of the melting pot: out of many, one. America is founded not on sacrifice, but on creation.The terrorist attack on the World Trade Center was in essence an assaulton the mechanisms that let people transcend merely local values and the social desire for certainty. It struck democracy’s central mechanism for mediating uncertainty: the market. The three words of the name were well chosen.The world came to trade there, in the center of economic freedom. No matterwhat your culture, religion, or viewpoint, you were welcome to exchange thebest products of your efforts freely with others.Primitivists, be they suicide terrorists, enemies of scientific truth, or theself-chosen vanguard of “the people,” always have answers for anyone willing tolisten, and weapons to point at those unwilling to listen. Yet their argumentsare drawn from yesterday’s carcass, not the emboldened dreams of tomorrow.Their plans offer the certainty of blood and soil, birth and death, but in doing soomit that which makes us truly human: risk, uncertainty, freedom.And yet that is why attacks on innovation, science, and liberty are boundto fail. You cannot kill the spirit that makes people want to better their livesand draws millions to the United States from around the world. People realize that trade, business, and freedom are better than a life spent under rigidcontrol exercised by the few, be they bureaucrats, mullahs, or royalty. Creativity will always trump old-hearted men who seek to keep everything as itwas in bygone days.
What Book Do You Recommend?When asked a question like “What’s the best book?” it is customary for experts to answer flippantly. Rudolf Nureyev, asked whom he considered thebest dancer, always answered Fred Astaire. Paul Morphy was the same way inchess; he would never play anyone an even game because that would legitimize the possibility that someone else could be half as great as he was. WhenVic ruled the squash courts, he always said the greatest player was Jack Barnaby, his coach at Harvard, who stopped playing in 1950 and couldn’t detractfrom evaluation of his own play.Previously, when asked to recommend a good investment book, Vic usually responded that Richard Wyckoff’s Magazine of Wall Street, in the early1900s, and, before that, Hunt’s Merchant’s Magazine published in the 1870s,
362 Practical Speculationwere veritable treasure troves, and that since nothing subsequent to thosemonumental contributions had been at all noteworthy, it would be profitableto go back to those sources to at least get in touch with the roots of the field.But all that has changed. We can now recommend without reservationTriumph of the Optimists: 101 Years of Global Investment Returns, which wewrote about in detail in Chapter 9. This great book tabulates 101 years ofyearly returns for markets in 16 countries, with stock-by-stock returns in England and the United States. It compares these returns to Treasury bill rates,Treasury bond rates, inflation, and currency exchange rates. Returns are broken down into dividends, equity risk premiums, and size effects.With this as a base, the authors touch on every investment topic imaginable,including value versus growth, small versus big, seasonality, cost of capital, correlations between countries, earnings and dividend growth, benefits from diversification, the relevance of valuation models, and likely returns for the future.
Beating Pods and PessimismInvasion of the Body Snatchers, based on a novel by Jack Finney, has long beenone of our favorite horror films. Vic saw the original 1954 production and oneof the two remakes that seemed to hit just in time for each of the next two generations. But the 2002 market crash led us to reread the book. It is great, andaside from Triumph of the Optimists, this is the book we would recommendmost to those who wish to prosper in the current market environment. Thestory is about the danger of losing hope and passively accepting the status quo.If you succumb to conformity and stop thinking for yourself, the pod peoplewill get you.The hero of the story, Miles Bennell, is a doctor in a typical small town. Heis confronted by an epidemic of apparent mass hysteria among his friends andpatients. One after the other tells him that their relatives, teachers, and friendsare not the people they seem to be. Then, strangely, they return to his office torecant. Now they are feeling fine.The only problem is that Miles’ intellectual friend Jack Belicec doesn’t believe it. He finds a mannequin-like body in his cellar. He lays it out on a billiard table to inspect it, and invites Miles over for a look. Jack and Miles findthat the body is a blank, like an undeveloped photo, with no fingerprints. “It’sall there,” says Jack. “It has lips: a nose, eyes, skin, and bone structure underneath. But there are no lines, no details, and no character. . . . It’s like a blankface, waiting for the final finished face to be stamped upon it.”
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The one person Miles relies on, his one beacon of light on a foggy day, isDr. Mannie Kaufman, a respected psychiatrist in a neighboring community.When Dr. Kaufman tells Miles that “the human mind is a strange and wonderful thing” and that what he and Jack saw was a simple delusion, Miles issomewhat persuaded. What gnaws at him is that Mannie is usually a bit morecautious in giving out his opinion. The thought then occurs to Miles that perhaps the person giving him the opinion isn’t Mannie at all, but a pod.It turns out that Miles is right. Mannie is one of “them.”In the new century, we wondered if a similar invasion had taken over themarkets. Only a few years ago, we were surrounded by investors full of emotion, eager to drink deeply of the economic miracle that is the United States.Now those same investors seemed drained of feeling, convinced that the miracle was a hoax. They looked the same, they responded to the same names.But they were not the same. Inspired by Miles’ example, I sought out a marketpsychologist, Brett Steenbarger. With relief, I heard excitement in his voice ashe talked of crisis and opportunity. I realized that he, unlike Mannie, had notfallen prey to the pods.“We’re dealing with more than body snatchers,” he said. “These are mindsnatchers as well. Behind all speculative success is a positive triad of extraversion, energized mood, and risk-taking. We know from research that peoplewho take an active interest in the world around them are more likely to experience life with vigor. They are also more likely to assume prudent risks.”“That’s not what we’re seeing now,” he continued. “Investors are responding with the negative triad that psychiatrist Aaron Beck found among depressedpeople: dampened optimism about themselves, others, and the future.”“What could have snatched people’s minds this way?” I asked.“It’s the hubris meme,” Dr. Steenbarger offered. “It’s the same memethat told the Greeks that they could not fly too close to the sun, lest they meetthe fate of Icarus. What is taking investors over is not the idea of a bear market. Those come and go. It’s the idea that they deserve a bear market.”With that, the doctor pulled out a copy of BusinessWeek and turned to anarticle titled “The Betrayed Investor.” It chronicled the dashed hopes of investors whose trust has been broken by the failures of corporate boards, brokerages, and accounting firms to protect their constituencies. He pointed tothe headline beneath the article’s title: “Americans bought into the idea thatstocks could only make them richer. Then the market bubble burst—and thencame Enron.”8“You see,” he said, “investors no longer feel deserving of rich rewards.They feel like arrogant dupes, and they must pay the price of Icarus for their
364 Practical Speculationhubris. This is what has taken over the world. Investors dare not hope. Theyare afraid they will bring an even greater calamity upon their heads.”It was then that we realized that Finney’s book held the answer for today’sinvestors. They may feel like the betrayed Miles, or like the betrayed lover. Butthere is an important difference. Although dashed expectations may portend apoor relationship, they are a favorable indication for markets. Hitting a 40-daylow point in the markets has led to an average rise of 1.5 percent the next day,over the past six years. Market pessimism provides the very basis for marketoptimism.In Finney’s book, the situation looks desperate for Miles and his girlfriendBecky. But they refuse to give up. “Even prisoners in maximum-security prisons have escaped. We had no right to waste ourselves. We were here—with thepods—and we had no right to waste ourselves. Even though it was hopeless.Even though it made capture an absolute certainty, we had to use ourselvesagainst the pods.”
Hope—And Some Time-Tested PrinciplesInvasion of the Body Snatchers ends on a heroic note. Miles and Becky refused togive up. They put up so much resistance that the pods moved to a more hospitable planet. “Many had lost,” the book concludes, “but some of us who hadnot been caught, trapped without a chance, had fought implacably, and a fragment of a wartime speech moved through my mind: We shall fight them in thefields, and in the streets, we shall fight in the hills; we shall never surrender.”When the bearish meme goes the way of the pod people, the world willstart looking normal again, just as it did at the end of the Body Snatchers. Thepeople who put all their wealth in money-market accounts paying 1 percentexpecting that stocks would go to zero will be hanging around the town plaza,strangely listless and uncommunicative. The death rate will be higher than average for a while, and you’ll see empty storefronts where the executives werehauled off in handcuffs and the companies went bankrupt. But all in all, asJack Finney summed up:The empty houses are filling quickly—it’s a crowded county and state—and thereare new people, most of them young and with children, in town. In five years, maybetwo or three, Mill Valley will seem no different to the eye from any other small town.And what once happened here will have faded into final unbelievability.
The empty wallets of those who recently bought stocks for the long termwill be filling steadily. The American economy is vigorous and resilient. After
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periods of disaster, the surviving companies are stronger and healthier, andthe returns from buying them are greater. New companies and divisions willbe formed that profit from great scientific discoveries. Those who invest prudently can expect to pay for their education, homes, and retirement just theway their parents did in almost all periods in the previous century.In five years, maybe two or three, the Nasdaq below 1000 and the Dowbelow 7500 will be bad memories. Those who doubted the fruits of investingand enterprise will have faded into well-deserved obscurity.
Manhattan, NY (Artist: Michael Leu, 1990).
AFTERWORD
S
ome traders don’t take losses personally. For most, however, selfconfidence varies with the success of the last trade, as my wife Susanonce observed after years of watching traders work for me. I am not immune tothis. Since 1997, I have been trying to crawl back up the stairs, not entirely without success. Occasionally, however, I stumble. Then, I think that I’m the world’sworst. In this I follow my father, Arthur Niederhoffer. Artie had a beautifulhandball and tennis game, but whenever I would ask him to play a money ortournament match, he’d say, “For crying out loud, no. I’m the world’s worst. Besides, I can’t afford the loss of the quarter.”Artie played football on the Brooklyn College team at the age of 16. Theteam was paid heavily to play against the best teams in the nation, as theyloved to kill the Brooklyn boys. As far as I know, Brooklyn never won a gamethat Artie played in. What he did get was a broken nose—12 times—and a dislocated shoulder or two. As a result, he could never play any other game, suchas tennis or handball, that required a free-flowing swing. So there was sometruth to his talk about being the world’s worst, even though before he playedcollege football he was a champ at all these.I often feel the same way. Despite the lessons I learned in 1997, I am invariably too early and too contratrend in my trades. Whatever the big move,it’s still likely to get me. I am trying to improve, however, and often when Itake a drubbing, like I did in summer 1998 or summer 2002, I step back, kickmyself around, and say, like Artie: “I’m the world’s worst.”My Uncle Howie is always vigilant not to let me succumb to defeatism,since he always thinks of his little nephew as a winner. After reading a message from me about my latest drubbing in the first weeks of 2003, this is whathe had to say:367
368 AfterwordYour message intimating self-doubt is very upsetting. You have always beensupremely confident in your abilities and convictions, and with great justification.As much as we loved your dad, we are not him. His self-deprecation was an expression of modesty, not a true belief in his inferiority. Artie knew what his abilities were, and they were formidable. I know what mine are, and you know whatyours are. And, while in many ways we are not the man that Artie was, in otherswe surpass him. Self-deprecation is not fitting for you or me. Realistic selfassessment is more our style.Artie, although growing up amid the Depression and never having any excessmoney, was always very free with a buck. It was never a matter of what he could afford. Unlike most people, he would tip gas station attendants with those quartersthat he “couldn’t afford to lose.” I believe his aversion to gambling (speculation foryou—calculated risking for me) had to do with the scarcity of money as well as hisnot wanting to take advantage of someone else. We regard it differently.I have no doubt of your ability to overcome any temporary setback you mayexperience in life. It won’t be by chance. It will be by dint of your analysis of allavailable data and knowledgeable counsel. If, like Ali in “Rumble in the Jungle,”you have decided that it is wise to retreat for now and let the enemy punch himself out, like MacArthur you shall return and emerge victorious as you always do.Your positive self-confidence will ensure that result.I love you,Howie
NOTES
Introduction1. Jack Finney, Invasion of the Body Snatchers (New York: Simon & Schuster, 1954).2. Victor Niederhoffer, The Education of a Speculator (New York: Wiley, 1997).3. Geraldine Fabrikant, “Trappings of Faded Richness: Sold!” New York Times (December 13, 1998).4. Mitch Albom, Tuesdays with Morrie (New York: Doubleday, 1997).5. Paul Heyne, The Economic Way of Thinking (Upper Saddle River, NJ: PrenticeHall, 1997).6. Arthur Niederhoffer, Behind the Shield: The Police in Urban Society (Garden City,NY: Doubleday, 1967).7. Thomas S. Kuhn, The Structure of Scientific Revolution (Chicago: University ofChicago Press, 1962).8. Elroy Dimson, Paul Marsh, and Mike Staunton, Triumph of the Optimists: 101Years of Global Investment Returns (Princeton, NJ: Princeton University Press,2002).9. Steve Stigler, Statistics on the Table (Cambridge, MA: Harvard University Press,1999).10. Robert L. Bacon, Secrets of Professional Turf Betting (New York: Amerpub, 1956).Chapter 11. Guy De Maupassant, “The Horla,” Short Stories of the Tragedy and Comedy of Life,Vol. II (New York: M. Walter Dunne, 1903).2. Speech by U.S. Federal Reserve Chairman Alan Greenspan, “The Challenge ofCentral Banking in a Democratic Society,” presented December 5, 1996, at an
369
370 Notesawards dinner sponsored by the American Enterprise Institute for Public PolicyResearch, Bloomberg News (December 6, 1996).3. Hal Paul, “U.S. Stock Plunge: Dow’s 554-Point Drop Halts Trading,” BloombergNews (October 27, 1997).4. Jeremy J. Siegel, Stocks for the Long Run: The Definitive Guide to Financial MarketReturns and Long-Term Investment Strategies (New York: McGraw-Hill, 1998).5. Arthur Levitt, “The Numbers Game,” delivered at the New York University Center for Law and Business, New York (September 28, 1998).6. Carole Loomis, “Lies, Damned Lies, and Managed Earnings,” Fortune (August 2,1999).7. Carole Loomis, “Mr. Buffett on the Stock Market,” Fortune (November 22, 1999).8. Mary Buffett and David Clark, Buffettology (New York: Fireside, 2001).9. Monique Wise, “Wall Street Bonuses Could Rise 30 percent to Record as ProfitsSoar,” Bloomberg News (December 9, 1999).10. Brian Rooney, Amy Taxin, and Sara Pepitone, “How Rich Is Bill Gates? The Absurdity of Big Numbers,” Bloomberg News (December 16, 1999).11. Albert Jay Nock, Memoirs of a Superfluous Man (Delavan, WI: Hallberg Publishing, 1994).12. Richard Dawkins, The Selfish Gene (New York: Oxford University Press, 1989).13. Robert Shiller, Irrational Exuberance (Princeton, NJ: Princeton University Press,2000).14. Dan Lonkevich, “Buffett Lukewarm on Stocks, Seeks Acquisitions,” BloombergNews (March 9, 2002). Warren Buffett’s letter to shareholders, Berkshire Hathaway 2001 annual report.Chapter 21. Mario Puzo, The Last Don (New York: Random House, 1996).2. Steven Sills and Ivan Alexrod, “Profit Participation in the Motion Picture Industry,” Los Angeles Lawyer (April 1989).3. Standard & Poor’s Security Price Index Record (New York: McGraw-Hill, 2001).4. Kenneth L. Fisher and Meir Statman, “Cognitive Biases in Market Forecasts: TheFrailty of Forecasting,” Journal of Portfolio Management (Fall 2000).5. Thornton L. O’glove, Quality of Earnings (New York: Free Press, 1987).6. Howard Schilit, Financial Shenanigans (New York: McGraw-Hill, 2002).7. Aswath Damodaran, The Dark Side of Valuation (Upper Saddle River, NJ: PrenticeHall, 2001).8. Bjorn Tuypens, “Stock Market Predictability: A Myth Unveiled,” (Unpublished,2002).9. Alfred McClung Lee and Elizabeth Briant, The Fine Art of Propaganda: A Study ofFather Coughlin’s Speech (New York: Harcourt, Brace and Company, 1939).Expanded edition published 1971 by Octagon Books. Excerpts available at:http://www.mapinc.org/propaganda/propaganda/fineart.html.10. Gretchen Morgenson, “As It Beat Profit Forecast, IBM Said Little about Sale of aUnit,” New York Times (February 15, 2002).
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Chapter 31. Robert Graves, Greek Myths (London: Penguin Books, 1981).2. Martin S. Schwartz, Pit Bull: Lessons from Wall Street’s Champion Trader (NewYork: HarperBusiness, 1999).3. Joseph Granville, Granville’s Last Stand: Secrets of the Stock Market Revealed (NewYork: Hanover House, 1994).4. Jack Schwager, Market Wizards: Interviews with Top Traders (New York: HarperBusiness, 1993); and Jack Schwager, The New Market Wizards: Interviews with TopTraders (New York: HarperBusiness, 1994).5. Philip Jenks and Stephen Eckett, eds., The Global-Investor Book of Investing Rules:Invaluable Advice from 150 Master Investors (Hampshire, England: HarrimanHouse, 2001).6. Thomas Bulkowski, Trading Classic Chart Patterns (New York: Wiley, 2002).7. Venkat R. Eleswarapu and Marc R. Reinganum, “The Predictability of AggregateStock Market Returns: Evidence Based on Glamour Stocks” (Dallas, TX: SouthernMethodist University, Unpublished paper).8. Mario Puzo, Fools Die (New York: Penguin Books, 1978).9. Jim Albert and Jay Bennett, Curve Ball: Baseball, Statistics, and the Role of Chancein the Game (New York: Copernicus Books, 2001).10. Barry Nalebuff and Avinash Dixit, Thinking Strategically: The Competitive Edge inBusiness, Politics, and Everyday Life (New York: Norton, 1993).11. Elroy Dimson, Paul Marsh, and Mike Staunton, “Murphy’s Law and MarketAnomalies,” Journal of Portfolio Management, vol. 25–2 (Winter 1999).12. Daniel Kahneman, Paul Slovic, and Amos Tversky, Judgment under Uncertainty:Heuristics and Biases (Cambridge, England: Cambridge University Press,1982).13. Steven Nison, Japanese Candlestick Charting Techniques: A Contemporary Guide tothe Ancient Investment Techniques of the Far East (New York: New York Institute ofFinance, 2001).14. Harro Von Senger, The Book of Stratagems (New York: Viking/Penguin, 1991).15. Sandra Ward, “Barometer Readings: An Interview with Don Hays,” Barron’s(April 2, 2001).16. Robert Colby and Thomas Meyers, The Encyclopedia of Technical Market Indicators(New York: Irwin, 1988).17. Tushar Chande and Stanley Kroll, The New Technical Trader (New York: Wiley,1994).18. Daniel Defoe, A Journal of the Plague Year (London: Penguin Books, 1986).19. Carol Osler, “Identifying Noise Traders: The Head-and-Shoulders Pattern in U.S.Equities” (1998). Available from http://www.ny.frb.org/rmaghome/staff_rp/sr42.pdf.20. Paul Dickson, Baseball’s Greatest Quotations (New York: Harper, 1991).21. John E. Cooke, Life of Stonewall Jackson (Richmond, VA: Ayres & Wade, 1863).22. John Sweeney, “Music of the Markets: Victor J. Niederhoffer,” Technical Analysisof Stocks and Commodities (April, 2000).
372 Notes23. Bill Williams, Trading Chaos: Applying Expert Techniques to Maximize Your Profits(New York: Wiley, 1995).24. Robert L. Park, Voodoo Science: From Foolishness to Fraud (London: Oxford University Press, 2000).25. Zvi Bodie, Essentials of Investments (New York: McGraw-Hill College Division,2001).26. David Simon and Roy A. Wiggins, “S&P Futures Returns and Contrary Sentiment Indicators,” Journal of Futures Markets (May, 2001).Chapter 41. Leon Festinger, H. W. Riecken, and S. Schachter, When Prophecy Fails (Minneapolis: University of Minnesota Press, 1956).2. Peter Bernstein, Against the Gods: The Remarkable Story of Risk (New York: Wiley,1998).3. Carl I. Hovland and H. C. Kelman, “Reinstatement of the Communicator in Delayed Measurement of Opinion Changes,” Journal of Abnormal Social Psychology,vol. 48 (1954): 327–335.4. Flo Conway and Jim Siegelman, Snapping (New York: Stillpoint Press, 1995).5. Ronald W. Rogers and C. Ronald Mewborn, “Fear Appeals and AttitudeChange: Effects of a Threat’s Noxiousness, Probability of Occurrence, and theEfficacy of the Coping Responses,” Journal of Personality and Social Psychology,vol. 34 (1976): 56–61.6. Michael Shermer, Why People Believe Weird Things: Pseudoscience, Superstition andOther Confusions of Our Time (New York: Freeman, 1997).7. William Worthington Fowler, Ten Years in Wall Street (H