Our brains evolved for survival on the savannah, not the trading floor, says Mr Montier, and are maladapted to the task of investing. People are happiest in groups and feel something akin to physical pain from social exclusion. A willingness to oppose the crowd is the only way to produce superior investment results. But, Mr Montier warns, "pursuing contrarian strategies is a little bit like having your arm broken on a regular basis".
We are also hard-wired for short-term results. Research shows that immediate gains stimulate the emotional centres of our brains, releasing a chemical, dopamine, that makes us feel good about ourselves. In tests, when people are offered a choice between $10 today and $11 tomorrow, most opt for immediate gratification. JM Keynes anticipated these findings long ago, when he observed in The General Theory (1936) that "human nature desires quick results, there is a peculiar zest in making money quickly, and remoter gains are discounted by the average man at a very high rate".