The Psychology of Investing

The Imp of the Perverse is a short story by Edgar Allan Poe, published in 1845, that explores the subconscious desires of people to do exactly what they should not.  I read it in college, and have no desire to read it again. But the title has stuck with me, and I bring it up today because Poe was a pioneer of psychological thought—and psychology is a critical component of investing, for better or worse.

Imp of the Perverse by Arthur RackhamThe name of this blog, remember, is Contrary Opinion. It’s named that because doing the opposite of the crowd at market extremes is a highly profitable strategy, though devilishly difficult to execute. Contrarily, following the crowd, while wondrously comfortable, is a sure road to mediocre performance, at best.

But it’s not enough to act contrarily all the time, because in the middle of trends, the crowd is actually right. It’s only at the end of trends, when emotions and perceptions reach a fever pitch of optimism or pessimism, that it pays to act contrarily. So listening to the Imp of the Perverse, who is constantly telling you to do the socially wrong thing, is not a successful strategy. Instead, it’s best to take a sober measure of the crowd’s temperature continuously, and act only when maximum emotions are observed—and then only if the charts confirm your judgment.

For example, back in late 2008, when the subprime mortgage crisis brought down first the entire housing industry and then the entire U.S. economy, negative sentiments reached extreme levels.  And through the winter of 2008-2009, sentiment remained terrible. But when the stock market began advancing in the spring of 2009, that strength was a great buy signal, even though the fundamental news (and sentiment) was still terrible.

More recently, in 20012, Apple (AAPL) was a darling of investors (who had profits) and consumers (who loved the company’s products). But AAPL was so popular that at the peak in 2012, there were no more potential buyers of the stock; everyone who could buy had already bought! Which meant there was a preponderance of potential sellers! So when AAPL actually turned down in late 2012, it was great sell signal. Within seven months, America’s most loved company saw its stock fall 45%!

Today, investors as a whole are rather bullish about the market, because they’ve enjoyed good profits this year, but the man on the street is still not invested, so I can’t say that sentiment is particularly high. Contrary opinion is not always useful.

But it is interesting to note that Apple (AAPL) remains one of the most popular stocks among users of And that tells me that the stock is still far too popular to be a good buy. In fact, it reminds me that one of the handicaps people have when it comes to investing is their inability to see enough options.

They think, “Apple. It’s a good company, and its stock is down from 700 to 520, so it’s probably a good buy.” But these people have no system, aside from the system that works outside the market—buying things cheap is usually good—and worse, they have no idea that there are thousands of other stocks worth considering, stocks of companies that aren’t as well known as Apple.

What you really need to look for in a growth stock is a company that’s growing fast but is not yet universally known and is not yet well respected by most people. If you have these conditions, you have more potential buyers than sellers—and if the stock is going up, you have conditions that will likely attract more buyers soon, to fuel the uptrend.

For example, Tractor Supply Company (TSCO) is not as big or as well known as Home Depot. But it runs 1,245 stores in 47 states, serving the “lifestyle needs of recreational farmers and ranchers.  The Company also serves the maintenance needs of those who enjoy the rural lifestyle, as well as tradesmen and small businesses.  Stores are located in towns outlying major metropolitan markets and in rural communities.  The Company offers the following comprehensive selection of merchandise: (1) equine, pet and small animal products, including items necessary for their health, care, growth and containment; (2) hardware, truck, towing and tool products; (3) seasonal products, including lawn and garden items, power equipment, gifts and toys; (4) maintenance products for agricultural and rural use; and (5) work/recreational clothing and footwear.”

I like TSCO because it’s growing, and can grow more just by opening more stores. I like it because it’s not well known. And I like it because the stock is going up.

But if you invest in TSCO, particularly if you’re a city dweller, you’ll get little or no social reinforcement of your decision, and that can make it psychologically difficult. Nevertheless, it’s a truism that the best investment decisions are the ones that make you uncomfortable. Think about it. And if you want more expert advice, head over to


Curious Massachusetts Regulations

by Timothy Lutts

Last month my oldest daughter got married to a wonderful guy, and after the ceremony, my wife and I hosted a reception in our backyard.

fireworksThere was food, drink and dancing, and everybody had a great time. Plus, after it got dark, a bit after nine o’clock, we lit off fireworks. Luckily, the cops didn’t come. If they had, I’d assumed they’d just issue a warning; after all, we were on private property and not hurting anyone. And I’ve done this private fireworks thing several times before, and haven’t gotten in trouble yet.

But I shouldn’t even have to worry about breaking the law, and here’s why. In 46 states in this country, owning and using fireworks is just as legal for adults as driving a car and drinking alcohol, two behaviors that are far more dangerous.

The four exceptions are New York, New Jersey, Delaware and Massachusetts.

Maine used to belong to that group, but legalized sales began on Jan. 1, 2012. Now, everyone in Maine who used to drive to New Hampshire to buy fireworks can buy closer to home, which not only means more Maine jobs but also more tax revenue—much more than expected!

In fact, while the state’s experts had estimated that fireworks stores would generate about $120,000 a year in sales taxes, in reality they generated $380,000 (for the 12-month period ending May 31.)

I see no reason Massachusetts shouldn’t be next. Until then, I’ll keep picking up my fireworks while I’m in New Hampshire.


Moving on, I noticed this most curious Bill in the Massachusetts Senate recently, aimed at removing from society the great risks from that scourge known as the microwave oven.

Bill S.113

SECTION 1.  Notwithstanding any general or special law to the contrary, the office of consumer affairs and business regulations shall establish minimum safety requirements for all microwave ovens sold and operated in the commonwealth including but not limited to the following:

(i) a microwave oven must not be large enough to be able to fit an infant child or small animal into;

(ii) a microwave oven must not operate at more than 500 watts;

(iii) all microwave ovens sold in the commonwealth must be equipped with a motion sensor in the oven designed to detect a living person or animal and immediately turn off the cooking mechanism;

(iv) all microwave ovens sold in the commonwealth must pass a drop test to ensure no leakage of radiation;

(v) all microwave ovens in the commonwealth must be registered and equipped with a locking device;

(vi) any microwave oven purchased on the internet to be operated in the commonwealth must conform to Massachusetts regulations;

(vii) no microwave oven may be sold at a yard sale or flea market;

(viii) only one microwave oven permitted per residence;

(ix) any residence equipped with an oven is prohibited from possessing a microwave oven;

(x) anyone under the age of 18 is prohibited from operating a microwave oven;

(xi) all microwave ovens sold in the commonwealth must only be done so by a licensed dealer; and

(xii) a buyer of a microwave oven must sign a document at time of sale affirming they know and understand the requirements herein.

That’s it. No explanation of WHY such strict regulations are deemed necessary, and no explanation of the possible effects of these regulations.

So I dug a little, eventually emailing Senator John Keenan (a Democrat) of Quincy, who filed the bill (though not exactly), and asking for an explanation.

Here is the reply from his able aide, Alejandro Alves.


The bill you ask about was filed by request, on behalf of Mr. Donald Kusser, a citizen residing in Quincy and a constituent in the Senator’s district.

In Massachusetts, every citizen has a right to propose legislation and have their elected representatives consider their proposal.  This is commonly referred to as the “Right of free petition” and is a feature of government unique to Massachusetts.  A bill is presented and labeled “By Request” when the elected member neither favors nor opposes the bill, but agrees to present an idea on behalf of a constituent.

The bill relative to microwave ovens originated in this manner.  Mr. Kusser approached the office with a clearly formed policy idea, and with a bill which he himself had prepared.  The question of microwave safety has not been a focus of legislative research in this office.  As such, I do not have much to offer in terms of “back story” to the proposal.  The matter is now in the hands of the committee members to whom the bill has been assigned.  They will research the matter as needed, and report on the bill accordingly.

If you have any further questions on this process, please let me know.


Alejandro Alves

Office of State Senator John F. Keenan”

Obviously (to me), this bill deserves to die in committee, after they have a good laugh, especially over the regulation that would prohibit a home with an oven from possessing a microwave oven. And I’m wondering why Senator Keenan allowed himself to be a conduit for this bill. I’ll bet he owns a microwave oven, and I’ll bet he wouldn’t want to give it up!

As to Donald Kusser, he’s not a very visible guy, but what does stand out is his long-time advocacy for gun rights. Knowing that, it’s clear that this farce of a microwave bill is designed to parallel gun control regulations and in the process illuminate their foolishness (in his opinion) as well.

Well, I had a good laugh, and I hope you did, too. But considering the cost/benefit ratio of microwave ovens versus the cost/benefit ratio of guns, I think it’s a lousy parallel.


John Zogby’s Crystal Ball

by Timothy Lutts

I originally wrote this in September 2008, and nearly five years later, the major points still seem accurate, if a little more obvious. My only quibble might be that the red state-blue-state paradigm remains alive and well. Hopefully, Zogby was just early on that call. (April 2013)

Today I want to focus on a fellow who’s made a career of predicting the future, John Zogby. Zogby has become a famous political pollster thanks to two factors; he’s frequently correct and he’s innovative. For example, he began the now-common process of weighting political poll results according to the respondent’s party affiliation. And today he practices online polling using a massive database that closely mirrors the population of the nation as a whole.

thewaywe'llbeAnd now he’s written a book, titled “The Way We’ll Be.”  You see, John Zogby does far more than political polls. His organization, Zogby International, will do any kind of poll for a fee.  He asks about religion, shopping habits, reading habits, travel, sexuality, parenting, values and more. And after a poll has been completed, he keeps the data around, as reference for future polls on the same subject.

The book, which I stumbled on in a bookstore recently, is mainly an analysis of trends he has detected through polling and his analysis/guess of where those trends will lead America in the years and decades ahead.

One disclaimer: Zogby is a fervent Democrat, and though he attempts to analyze data objectively, I sense that in some of his projections he has not been successful in suppressing his personal values.

Having said that, the future according to John Zogby will bring a world characterized by the following:

1. Living Within Limits

2. Embracing Diversity

3. Looking Inward

4. Demanding Authenticity

The first idea, Living Within Limits, stems from surveys that show “we are in the middle of a fundamental reorientation of the American character away from wanton consumption and toward a new global citizenry in an age of limited resources.” That’s why people buy Toyota Priuses when they can afford BMWs.

The second idea, Embracing Diversity, reflects the fact that, while “young people are less knowledgeable about facts and events than ever before…members of this generation are more networked and globally engaged than members of any similar age cohort in American history.”  Going on, “[They] want a foreign policy as inclusive and embracive as they are. They expect impediments to trade to be removed so they can shop anywhere.” Finally, Zogby found (in a survey in late 2004) solid majorities of all Americans expressing favorable views of China and Chinese products…with one exception. “Of all the many subsets we broke our results into, the only genuinely negative responses we found to both China and its products came from the members of Congress and their staffs. That’s cultural disconnect in stark relief.”

The third idea, Looking Inward, comes from surveys that show a growing appetite for satisfaction from the spiritual side of life, though not specifically from organized religion. It reflects the fact that “total household Christmas holiday spending has been in sharp decline since the mid-1990s, according to the Department of Labor’s Bureau of Labor Statistics.” Zogby explains it up this way. “People are hungry to address the nonmaterial side of their lives. They’re worn out with getting and spending; in some cases they are broken by it. They want an America that looks to the spirit as well as the pocketbook, and they want to move beyond specifically religious nostrums to get there, including specifically Christian nostrums.”

And the fourth idea, Demanding Authenticity, builds on the fact that our connected world in general—and the Internet in particular—have made it easy to find the truth about most things. As a result, anything that is not authentic–from a political leader to an advertising campaign to a TV reality show to an Olympic performer—is quickly exposed. Similarly, for every person who has a public profile on a social network site, the best policy is to be real…because the truth will very quickly be known. Says Zogby, “There’s a longing…a deep-felt need to reconnect with the truth of our lives and to disconnect from the illusions that everyone from advertisers to politicians tries to make us believe are real.” Also, “[consumers] have figured out what is false and real, what is ephemeral and what deeply matters, and now they are starting to demand that same authenticity in the products they buy, the companies they buy from, the institutions they frequent, and the people they vote for.”

Going on, Zogby predicts that the red state-blue state shorthand of political analysis will fade in the years ahead, replaced by increasingly precise tools that segment “sports fans, pet owners, international travelers, early risers, cancer survivors, heart-bypass veterans, Catholic school alumni, science majors compared to humanities majors, Mac users compared to PC users, American-car owners compared to foreign-car owners, Yahoo! browsers compared to Google browsers, single moms compared to married moms, and on and on.”

Zogby also writes:

– That support is waning for America’s role in Israel as a “fair and honest broker.”

– That globalization will continue, not just because of competitive, capitalistic forces but also because of genuine understanding and empathy for the citizens of foreign lands.

– That Americans are growing increasingly dissatisfied with their federal government.

– That the baby-boom generation “will finally force Congress to pass meaningful health care reform.”

– That environmentalism, cutting down on waste, and making do with less will grow increasingly relevant in the years ahead.

– That demand for alternative energy solutions will “eventually translate itself into funding, research, exploration, and with a little luck, reality.”

So how do you use this “intelligence” to make money?

As always, keep your eyes and your mind open. That way, when you see a trend developing that fits into this scenario, you’ll be more inclined to take it seriously, and to understand that it may have long-running potential.

For example, we’ve seen a recent trend away from buying big SUVs, and been told it’s mainly a reaction to high fuel prices. But Zogby’s analysis tells us that a longer-running trend away from excessive consumerism is likely to keep that trend in place even if fuel prices fall.

Similarly, we’ve been told that the booming demand for alternative energy solutions is also in response to high fuel prices. But Zogby’s data tells us it’s all part of a growing desire to treat the environment we live in better. Whatever your motivation, investing in Green companies will allow you to contribute to a cleaner environment and profit handsomely while doing so.

The Economics of Legal Marijuana

by Timothy Lutts

I originally wrote this in October 2009. Many U.S. states have come a long way since then but even more have done nothing. And the Federal government, sadly, remains deaf to the desires of its citizens, even though 52% of Americans now favor legalizing marijuana and 72% believe that government efforts to enforce marijuana laws cost more than they are worth. (April 2013)

On Saturday, Sunday and Monday, one week ago, here’s what happened.

On Saturday, the New York Times ran a story on the drug wars in Mexico, describing how the power of the criminal gangs often outweighs the power of the law enforcers.

It’s a big problem, and the violence has increased since President Felipe Calderon launched an army-led assault on the cartels soon after taking office in late 2006.  More than 14,000 people have died in drug-related violence in Mexico since.

Cannabis sativa, economics of legal marijuanaThe Mexican gangs, of course, are just trying to make a living by serving the demands of a market … in this case the market for marijuana and other illegal drugs in the U.S.

Recognizing this, the U.S. attempts to help.  It’s currently giving $1.4 billion to Mexico to provide training and equipment to security forces.  And last week it conducted a massive sting operation that netted more than 300 arrests in 19 states.  But none of the arrested were upper-echelon figures, and U.S. Attorney General Eric Holder admits the gangs are too entrenched within the political and economic fabric of Mexico for the arrests to deal a deathblow to the gangs.

On Sunday, the Boston Globe noted that it was the 78th anniversary of Al Capone’s conviction on tax evasion charges, for which he received an 11-year federal prison sentence.

Alphonse Gabriel Capone, of course, became rich by satisfying the public’s thirst for alcohol during Prohibition, the 14-year period in which the sale of alcohol was illegal in the U.S.

While meeting the demands of this market, Capone, like the Mexican drug cartels, became very powerful, stymied law enforcement, and killed people.  Today, we generally recognize the folly of prohibiting the sale of alcohol during that period.  Even though one-third of Americans choose not to drink today, we know that instead of trying to outlaw it, it’s better to regulate it and tax it.  Today, the U.S. government collects more than $9 billion per year from alcohol taxes; individual states collect even more.

Then on Monday, President Barack Obama instructed federal attorneys that they should no longer prosecute marijuana users in the 14 states that allow it for medical reasons, but should defer to state laws instead.

Can you connect the dots?

The plain truth is that the War on Drugs (a term first used by President Richard Nixon in 1969) has been a failure.  In fact, the term is no longer used by the Obama administration, which prefers treatment to incarceration.

Yet the U.S. (federal and states) will spend about $47 billion this year on drug enforcement, clogging our court systems and overcrowding our prisons, in many cases dooming young men to a life in the underclass.

In fact, the United States has a higher proportion of its population incarcerated than any other country in the world … and roughly 25% of our inmates are in there for drug offenses, usually possession.

So who benefits from this War on Drugs?

Organized crime, certainly.  According to the United Nations, drug trafficking is a $400 billion per year industry, equaling 8% of the world’s trade.

Also benefiting are arms manufacturers, the law enforcement industry, the prison industry and the legal industry.

And I don’t think we’re getting a good value for our $47 billion.  In fact, I think our efforts may be counterproductive, and that we should explore a more sensible route, the same one we use for alcohol and tobacco.

In short, legalize it, regulate it and tax it.

Legalization would quickly shrink that $47 billion annual cost of law enforcement to a small fraction of its present level.  In its place, we’d have federal quality control inspectors to keep tabs on the legal producers (thus reducing poisonings and overdoses).  Entrepreneurs would spring up out of the woodwork to become producers, and with the increased supply prices would fall to more reasonable levels.  Profits would drop.  And organized crime would soon be out of the business.

We’d have a more efficient legal system, and a more efficient prison system.  And we’d have a ready supply of legal marijuana for medicinal purposes (two-thirds of Americans are in favor of medical marijuana now).

And then we’d be able to tax it!  Every state in the country now taxes alcohol and cigarettes, and I think marijuana should be no different.  And how much would we collect from those taxes?

A 2008 study by Harvard economist Jeffrey A. Miron estimated that legalizing drugs would inject $76.8 billion a year into the U.S. economy–$44.1 billion from law enforcement savings, and at least $32.7 billion in tax revenue ($6.7 billion from marijuana, $22.5 billion from cocaine and heroin, the remainder from other drugs).  I’m not ready to argue for legalizing those harder drugs, but I do think a country as deep in debt as ours should stop giving money away on unproductive projects and start looking for positive cash flows.

Leading the way already is our country’s lifestyle pioneer, California.  This past July, 80% of Oakland, California voters chose to impose a tax of 1.8% on medical marijuana sales, which could bring the cash-strapped city nearly $300,000 next year.

And California Assemblyman Tom Ammiano, a Democrat from San Francisco, introduced legislation that if approved by the California Legislature, would put pot on the same legal footing as alcohol–legalizing its sale and having the state tax it.  Ammiano called it “simply nonsensical” to keep marijuana, the state’s top cash crop, unregulated and untaxed in light of the state’s massive financial problems.

The value of California’s marijuana crop is estimated at $14 billion annually. That’s almost twice the combined value of vegetables and grapes, the state’s second and third most-valuable crops.  Ammiano estimated passage of his pot legalization proposal could generate more than $1.3 billion for state coffers.

Finally, turning to our neighbor Canada, I found this:

“In a recent study for the Fraser Institute, Economist Stephen T. Easton attempted to calculate how much tax revenue the Canadian government could gain by legalizing marijuana.

The study estimates that the average price of 0.5 grams (a unit) of marijuana was $8.60 on the street, while its cost of production was only $1.70. In a free market, a $6.90 profit for a unit of marijuana would not last for long. Entrepreneurs noticing the great profits to be made in the marijuana market would start their own growing operations, increasing the supply of marijuana on the street, which would cause the street price of the drug to fall to a level much closer to the cost of production. Of course, this doesn’t happen because the product is illegal; the prospect of jail time deters many entrepreneurs and the occasional drug bust ensures that the supply stays relatively low. We can consider much of this $6.90 per unit of marijuana profit a risk premium for participating in the underground economy. Unfortunately, this risk premium is making a lot of criminals, many of them with ties to organized crime, very wealthy.

Stephen T. Easton argues that if marijuana were legalized, we could transfer these excess profits caused by the risk premium from these growing operations to the government:

“If we substitute a tax on marijuana cigarettes equal to the difference between the local production cost and the street price people currently pay–that is, transfer the revenue from the current producers and marketers (many of whom work with organized crime) to the government, leaving all other marketing and transportation issues aside we would have revenue of (say) $7 per [unit]. If you could collect on every cigarette and ignore the transportation, marketing, and advertising costs, this comes to over $2 billion on Canadian sales and substantially more from an export tax, and you forego the costs of enforcement and deploy your policing assets elsewhere.”

One interesting thing to note from such a scheme is that the street price of marijuana stays exactly the same, so the quantity demanded should remain the same, as the price is unchanged. However, it’s quite likely that the demand for marijuana would change from legalization. We saw that there was a risk in selling marijuana, but since drug laws often target both the buyer and the seller, there is also a risk (albeit smaller) to the consumer interested in buying marijuana. Legalization would eliminate this risk, causing the demand to rise. This is a mixed bag from a public policy standpoint: Increased marijuana use can have ill effects on the health of the population but the increased sales bring in more revenue for the government. However, if legalized, governments can control how much marijuana is consumed by increasing or decreasing the taxes on the product. There is a limit to this, however, as setting taxes too high will cause marijuana growers to sell on the black market to avoid excessive taxation.

When considering legalizing marijuana, there are many economic, health, and social issues we must analyze. One economic study will not be the basis of Canada’s public policy decisions, but Easton’s research does conclusively show that there are economic benefits in the legalization of marijuana. With governments scrambling to find new sources of revenue to pay for important social objectives such as health care and education expect to see the idea raised in Parliament sooner rather than later.”

Economically, I think legalization and taxation is a no-brainer.  The less easily defeated arguments come from people who argue that all drug use is bad (the old Puritan argument that drove Prohibition) or that marijuana is a stepping-stone drug.  In any event, Obama’s directive to stop prosecuting marijuana users in states that approve medical marijuana use is one small step on the road that should ultimately lead to legalization and taxation.  I have no doubt that it’s a very long road.  But the journey has begun.

More on this topic

Human Evolution and Music, Music, Music

by Timothy Lutts

Originally written in May 2009, this column helped me answer a question I’d wondered about for decades: why had humans evolved to appreciate and create music? What was the advantage? It’s slightly dated, but still one of my favorites. (April 2013)

human evolution and musicThe seed for this column was inadvertently planted two weeks ago by Paul Goodwin, who is known publicly as the editor of Cabot China & Emerging Markets Report, but in his private life is an accomplished tenor with a serious appetite for classical music.

It started when Paul forwarded to me a copy of a welcome address delivered in February to the parents of incoming freshmen at Boston Conservatory by Dr. Karl Paulnack, pianist and Director at the school.

Boston Conservatory is a “serious” music institution; it works to perpetuate and cultivate the values of classical music, chamber music, opera, conducting, etc.

Famous recording artists Teresa Brewer, Cherilyn Sarkisian and Katy Perry didn’t have the benefit of the institute’s instruction and we’ll get to them later. (If you can identify all three of those women, congratulations!)

But we’ll start with the highlights of Dr. Paulnack’s speech, skipping the usual introductory remarks.

“The first people to understand how music really works were the ancient Greeks … the Greeks said that music and astronomy were two sides of the same coin. Astronomy was seen as the study of relationships between observable, permanent, external objects, and music was seen as the study
of relationships between invisible, internal, hidden objects. Music has a way of finding the big, invisible moving pieces inside our hearts and souls and helping us figure out the position of things.”

Paulnack then goes on to give two big examples of this:

The French composer Olivier Messiaen, who wrote “Quartet for the End of Time” while imprisoned in a concentration camp in 1940.

The way people in Paulnack’s Manhattan neighborhood who banded together after September 11, 2001 to sing “We Shall Overcome” and “America the Beautiful.”

From this, Paulnack concludes that music is “not of “arts and entertainment” as the newspaper section would have us believe. It’s not a luxury, a lavish thing that we fund from leftovers of our budgets, not a plaything or an amusement or a pastime. Music is a basic need of human survival. Music is one of the ways we make sense of our lives, one of the ways in which we express feelings when we have no words, a way for us to understand things with our hearts when we can’t with our minds.”

(Note those words, “one of the ways in which we express feelings when we have no words,” because I’ll come back to them.)

Paulnack goes on to mention Samuel Barber’s “Adagio for Strings,” well known as the background music in Oliver Stone’s movie “Platoon.”  He mentions weddings, which always have music, and notes, “predictably 30 or 40 percent of the people who are going to cry at a wedding cry a couple of moments after the music starts. Why? The Greeks. Music allows us to move around those big invisible pieces of ourselves and rearrange our insides so that we can express what we feel even when we can’t talk about it.”

Then, closing in on his big theme, he finishes:

“If we were a medical school, and you were here as a med student practicing appendectomies, you’d take your work very seriously because you would imagine that some night at two AM someone is going to waltz into your emergency room and you’re going to have to save their life. Well, my friends, someday at 8 PM someone is going to walk into your concert hall and bring you a mind that is confused, a heart that is overwhelmed, a soul that is weary. Whether they go out whole again will depend partly on how well you do your craft.

“You’re not here to become an entertainer, and you don’t have to sell yourself … You’re here to become a sort of therapist for the human soul, a spiritual version of a chiropractor, physical therapist, someone who works with our insides to see if they get things to line up, to see if we can come into harmony with ourselves and be healthy and happy and well.

“Frankly, ladies and gentlemen, I expect you not only to master music; I expect you to save the planet. If there is a future wave of wellness on this planet, of harmony, of peace, of an end to war, of mutual understanding, of equality, of fairness, I don’t expect it will come from a government, a military force or a corporation. I no longer even expect it to come from the religions of the world, which together seem to have brought us as much war as they have peace. If there is a future of peace for humankind, if there is to be an understanding of how these invisible, internal things should fit together, I expect it will come from the artists, because that’s what we do. As in the concentration camp and the evening of 9/11, the artists are the ones who might be able to help us with our internal, invisible lives.”

For the audience of parents, the speech was no doubt quite effective; it made them feel good, even noble, to spend money (tuition at Boston Conservatory is $30,400 a year) to send their offspring to the institution.  And the fact that the speech lives even now on the Internet, with universally positive commentary, attests to the power of its message. People–and professional musicians in particular, who are profoundly attuned to music–love the idea that music can bring peace to the planet.

But color me skeptical.  Sure, Paulnack made excellent use of examples as a tool of persuasion.  Lord knows we all recognize the power of music to pull our heartstrings in movies and at weddings.

But he was necessarily selective in his examples.  He refers, of course, to beautiful classical music composed under difficult circumstances, but ignores martial music, which has long accompanied men to war.  And he ignores the role of popular music totally, despite the fact that it’s enormously more prevalent and influential in our culture–and in every culture–than Boston Conservatory’s serious music.

More important, his speech was notably lacking in both logic and science. Paulnack refers to the Greeks as a wise culture, but then says, “Music has a way of finding the big, invisible moving pieces inside our hearts and souls and helping us figure out the position of things.”

What does that mean, scientifically?!  I don’t think Paulnack cares; most important to him is that it feels right.  But I care.  So I looked.  I found a very good explanation for why music is such a powerful force in our lives, and I want to share it with you.

But first I want to return to the three female recording artists mentioned earlier.

Teresa Brewer was born Theresa Breuer in Toledo, Ohio, in 1931.  She never took music lessons; she couldn’t even read music.  But she began singing as a child, and had a #1 hit in 1950 with “Music, Music, Music,” written by Stephen Weiss and Bernie Baum.  It sold over a million copies and became her signature song, and it goes like this:

Put another nickel in
In the nickelodeon
All I want is loving you and
Music, music music

I’d do anything for you
Anything you’d want me to
All I want is kissing you and
Music, music music

Closer, my dear come closer
The nicest part of any melody
Is when you’re dancing close to me

Put another nickel in
In the nickelodeon
All I want is loving you and
Music, music music

In her career, which lasted into the 1990s, Teresa recorded nearly 600 song titles. She recorded with jazz greats Count Basie, Duke Ellington, Dizzy Gillespie and Bobby Hackett, and she died on October 17, 2007, at her home in New Rochelle, New York.

Cherilyn Sarkisian was born in El Centro, California, in 1946 and became famous in 1965 (at age 19) when “I Got You Babe,” recorded with Sonny Bono, became a #1 Billboard hit.  We know her as Cher.  She never finished high school, but she’s now 62 and in the midst of a three-year $60 million gig at Caesars Palace in Las Vegas.

And Katy Perry?  Born as Katheryn Elizabeth Hudson in 1984 in Santa Barbara, California, she’s hot today, thanks to songs like “I Kissed a Girl” and “Hot N Cold”; each has sold over three million copies.  She never finished high school, either.  Ask your kids or grandkids about her.

Then there’s me.  Both my parents are very musical; even now they play professionally as a duo, my father on clarinet and my mother on accordion. In their music room stands a refurbished orchestrion, a machine made by the Nelson-Wiggen Piano Company of Chicago in 1916 that plays when you drop a nickel in the slot … just like Teresa Brewer’s Nickelodeon.  Most recently, I heard it play “Petite Fleur,” a great jazz tune from the 1920s.

Basically, it’s a player piano, powered by electricity, and with additional components actuated by vacuum hoses.  It reads a perforated paper roll, and includes not just piano but three drums, cymbal, banjo, xylophone, wood block, triangle and castanets.  I think it’s pretty cool. It’s not amplified, but when it’s turned up loud (the way my father likes it) you can’t even hold a conversation in the room!

But I’m not a musician.  Sure, like my four siblings, I had years of piano lessons, starting at an early age.  I played clarinet through high school–and I still play it once a year, in the neighborhood Fourth of July parade where we play only three songs, “Avalon,” “Battle Hymn of the Republic” and “Chinatown.”

But no one would ever think of paying me to play.  And the truth is, I’d much rather listen to professionally played music–live or recorded.  I think Apple’s iTunes is one of the greatest inventions of the decade.

Now let’s get back to the real topic, the idea that music might save the world, and if not, the question of why music is such a powerful force in humans.

The title of this column is “Music, music, music.”  I made it up … simply by stating the topic three times.  But not really, because at the moment I conceived that three-word phrase (or perhaps before), my brain found a memory of a lyric, combined with a melody, and before you know it, I was singing (in my head) the lyrics to Teresa Brewer’s song, which had been implanted there many years before.

How did I save that memory … without even trying?  How have I saved memories of hundreds–thousands–of other songs, both serious and trivial? How is it possible that I can struggle to memorize the license plate on my wife’s car or a 10-digit phone number yet can easily remember a song after a couple of hearings … and retain that memory for many years?  And why does music affect us so emotionally … to the point where we can imagine it might be the force that saves the world?  Finally, what is the point?  Evolutionarily, why did we develop this capability to create and
respond to music?

I’ve been wondering idly about these questions for quite a few years and I think I’ve finally been presented with some answers, thanks to a wonderful book by Daniel J. Levitin titled, “This is Your Brain on Music.”

The book’s frontispiece says, “Daniel Levitin runs the Laboratory for Musical Perception, Cognition and Expertise at McGill University, where he holds the James McGill Chair and the Bell Chair in the Psychology of Electronic Communication.  Before becoming a neuroscientist, he worked as a session musician, sound engineer and record producer, working with artists such as Stevie Wonder and Blue Oyster Cult.  He has published extensively in scientific journals and music magazines such as Grammy and Billboard.”

In the book, Levitin begins by reviewing the concepts of pitch, rhythm, tempo, contour, timbre, loudness and reverberation, then moves on to cover meter, key, melody and harmony, all the while using examples like Handel’s “Messiah,” Don McLean’s “Vincent,” Busta Rhymes’s “What’s It Gonna Be?!,” Beethoven’s “Pathétique,” the Beach Boys’ “Barbara Ann” and “Twinkle, Twinkle Little Star.”

He covers octaves and scales, noting the variety of scales used both around the world and in different types of western music.  He covers chords.  And he covers transposition, noting that all of us, without any musical training can sing “Happy Birthday” in any key, because we’re so familiar with the relationships between the notes … but that most of us will always sing songs for which there is one definitive version, like Norman Greenbaum’s “Spirit in the Sky” or Neil Diamond’s “Sweet Caroline,” in exactly the “proper” key.

And then he digs deeper into the brain’s function, discussing the frontal lobe, the temporal lobe, the parietal lobe, the occipital lobe and the cerebellum.

None of these lobes is individually responsible for music processing; it’s a group effort.  But it’s notable that, “The emotions we experience in response to music involve structures deep in the primitive, reptilian regions of the cerebellum vermis, and the amygdala–the heart of emotional processing in the cortex.”

This is not to say that all music simply presses our “primitive” buttons. The most enjoyable music that we listen to engages our frontal lobes to a large degree, as we intellectually embrace the music while working to predict what will come next, based on several factors.

“What has already come before in the piece of music we’re hearing;

“What we remember will come next if the music is familiar;

“What we expect will come next if the genre or style is familiar, based on previous exposure to this style of music.”

In fact, the most enjoyable music is at once both familiar and engaging.

Levitin writes, “The appreciation we have for music is intimately related to our ability to learn the underlying structure of the music we like – the equivalent to grammar in spoken or signed languages – and to be able to make predictions about what will come next.”

Tempo and rhythm are generally predictable in western music; foot-tapping – sometimes an involuntary activity–is evidence of the neural importance of that.

But he notes that we also like surprises in our music.  The Beatles’ “Yesterday,” for example, violates the western convention of four-measure or eight-measure phrasing by placing the main melodic phrase in seven measures; the construction intrigues us, though we may not know why.

Within the space of just two pages, Levitin refers to The Beatles’ “For No One,” Steely Dan’s “Chain Lightning,” Aretha Franklin’s “Chain of Fools,” The Carpenters’ “Please Mr. Postman,” The Rolling Stones’ “As Tears Go By,” Stevie Ray Vaughan’s “Pride and Joy,” Elvis Presley’s “Hound Dog,” The Allman Brothers’ “One Way Out,” and Creedence Clearwater Revival’s “Lookin’ Out My Back Door.”

But it’s not all pop and rock.  Levitin is equally at home describing Miles Davis and John Coltrane, jazz artists who ask a little more from their listeners, and give a little more in return.

Along the way, he notes that children’s brains develop from birth to understand and appreciate the music around them.  That the popular conception that the left brain is analytical and the right brain artistic has some merit but is oversimplified.  And that hemispheric specialization does increase as we age.

He discusses “ear worms,” the song fragments that get stuck in our heads, telling us that professional musicians get these more commonly than non-musicians, and that people with obsessive-compulsive disorder are more likely to report them, too.

Digging into the connections among various brain centers and analyzing the order and amplitude of stimulation and activity, he concludes, “far more than language, music taps into primitive brain structures involved with motivation, reward and emotion.”

Going on, he writes, “The story of your brain on music is the story of an exquisite orchestra of brain regions, involving both the oldest and newest parts of the human brain, and regions as far apart as the cerebellum in the back of the head and the frontal lobes behind your eyes.  It involves a precision choreography of neurochemical release and uptake between logical prediction systems and emotional reward systems.  When we love a piece of music, it reminds us of other music we have heard, and it activates memory traces of emotional times in our lives.”

He also addresses the myth that some people have an innate talent for music.  What’s required, he says, is practice.  In any field, roughly 10,000 hours of practice is required to become an expert.

That’s three hours a day, seven days a week for nine years.  And with music, the earlier you start, the better, because those neurons become less amenable to programming as you age.  For Cher and Katy Perry, dropping out of high school to focus on music was a smart career move.

In his last chapter, Levitin gets to my biggest question.  Why music? What evolutionary advantage was or is conferred by music-making and music-enjoying?

And the answer is this.  Recognizing that humans evolved musical capabilities long before speech capabilities, imagine the simplest drum-beating and rhythmic grunting combined with primitive dance movements.  Prowess in these musical activities, just like a peacock’s tail, signaled to members of the opposite sex that the practitioner was so healthy that he or she could afford to “waste” time and energy developing a purely unnecessary attribute.  In short, the most impressive musicians and dancers got the most sex.  Look at “American Idol” and “Dancing With the Stars”–two programs I’ve never watched–and tell me what’s changed. Music is what helps you get the girl (or the girl get you)!

Levitin didn’t write this first.  Charles Darwin wrote it in “The Descent of Man” in 1871.  “I conclude that musical notes and rhythm were first acquired by the male or female progenitors of mankind for the sake of charming the opposite sex.”

There are still doubters.  No less an authority than Steven Pinker, professor of psychology at Harvard, wrote, “As far as biological cause and effect are concerned, music is useless.  It shows no signs of design for attaining a goal such as long life, grandchildren, or accurate perception and prediction of the world.  Compared with language, vision, social reasoning, and physical know-how, music could vanish from our species and the rest of our lifestyle would be virtually unchanged.”

Levitin counters, “The genes that exist in you today (with the exception of a small number that may have mutated) are those that reproduced successfully in the past.  Each of us is a victor in the genetic arms race; many genes that failed to reproduce successfully died out, leaving no descendants.  Everyone alive today is composed of genes that won a long-lasting large-scale genetic competition.”

“In contemporary society, interest in music peaks in adolescence, bolstering the sexual-selection aspect of music. Far more 19-year-olds are starting bands and trying to get their hands on new music than are 40-year-olds.”

Of course, music has evolved as humans have evolved.  At many levels it has become elevated beyond its sexual, evolution-advantaging roots.  The students at Boston Conservatory studying Chamber Music and String Pedagogy are giving their frontal lobes more of a workout than did our ancestors who beat on hollow logs while dancing around the fire.  And pianists who master Bach’s “Goldberg Variations” are unlikely to have groupies in the front row of concerts tossing underwear at them.  The educated people in their audiences are focused on achieving pleasures of a “higher” level.

But those well-established neural circuits in the primary regions of our brains, which govern pleasure and emotion, and which developed over millennia, are still extremely powerful.  Because of them, it’s relatively easy for us to memorize songs–and to recognize people’s voices–while it’s still hard for us to memorize license plates and phone numbers; numbers just haven’t been around long enough for our brains to become proficient with them.

In short, the past thousand years of civilization, in which we’ve made a tremendous amount of progress, thanks to our frontal lobes, have done little to diminish the powers of the primal regions of our brains … especially in young men and women.

One of the highlights of my week was a video (currently circulating on the Internet) of four young men in Ukraine, dressed in suits and ties, playing acoustic guitar, string bass, accordion, marching bass drum and tambourine … and playing Katy Perry’s “Hot N Cold.”  Their performance is a bit rough, but they’re having fun, and I’m betting the 18-year-old girls waiting backstage don’t care if these young men have been to music school!

So, Dr. Paulnack was right when he said that music is “one of the ways in which we express feelings when we have no words.”  Music predates speech in the human evolutionary chain, so its messages frequently need no words.

But can it save the world?  Well, it’s a nice thought.  But recognizing the link between human evolution and music, and the role of music’s roots, and music’s continuing grip on our senses, I’m skeptical.

If we REALLY want world peace–more than we want economic growth, land, food, shelter and clothing–the best course might be to recognize that half the population of the earth has a genetic disposition toward peace … and put them in charge!  I’m talking of course, about women, but
that’s a whole new topic.