Financial Times; Aug 09, 2002

Investors who have expressed regrets about past decisions by saying "I had a feeling I shouldn't have done that" may be interested in a technique that separates body twinges that don't say much from physical feelings one should act on. The technique, which identifies these distinct bodily sensations and puts them into words, has been adopted by many psychologists and psychotherapists.

The technique, termed Focusing, was developed by Eugene Gendlin, a philosopher at the University of Chicago who was the first non-psychologist to receive an outstanding psychologist award from the American Psychological Association in 1970 for his contribution.

Very early in his career Mr Gendlin wondered why psychotherapy was helpful for some people, but not others.

He discovered that all the people helped by psychotherapy had vague, body-felt senses about their problems. He further found that paying attention to these gut feelings in specific ways was a key component of successful psychological change.

"I first encountered Focusing at a lecture given by Gendlin in 1976," says Joan Klagsbrun, a practising psychologist in Watertown, Massachusetts.

By the lecture's end, she concluded that Mr Gendlin had figured out how people could identify and name what he called "felt senses" to effect behavioural changes.

"I have used it in my practice for the last 25 years," she says.

Focusing is now a psychotherapeutic tool known all over the world. Described in Mr Gendlin's book Focusing, the technique is learned easily. "There are six steps to identifying a felt sense in one's body," Mr Gendlin says. And Focusing can be applied to any human endeavour in which thinking is involved, including investing.

One of Mr Gendlin's collaborators, Flavia Cymbalista, who earned a doctorate in financial economics from the Berlin Free University in 1997, now teaches Focusing to traders and investors in New York. Described in greater detail on www.marketfocusing.com, the technique does not clear away all uncertainties but it does quantify feelings, which leads to new questions.

"Many people making investment decisions experience bodily twinges they would investigate if they knew how," Ms Cymbalista says.

Last spring, virtually all investors were concerned about what stocks might do next. Take the case of WorldCom, which had reached highs of $60 a share in 1999 but fell to $16 to $20 a share in 2001. In 2002, the stock fell to low of 5 cents a share, then ceased trading late last month.

Almost anyone who bought WorldCom in 2001 because it seemed cheap relative to its earlier highs would have felt some twinge of concern.

Could Focusing have kept investors from buying WorldCom last year? "Perhaps not, but using Focusing, these investors could have identified any of their misgivings and put them into words," Ms Cymbalista says.

The first step is clearing your mind of concerns using a rudimentary exercise. "If any concerns intrude when doing this, you stand back, putting a space between you and these concerns as they come up," Ms Cymbalista explains.

The second step is to select an intruding concern but continue to stand back from it. The third step is to name this concern. "Let a descriptive word, phrase or image come up from the bodily-felt sense itself," Ms Cymbalista recommends, "until you find something that fits this concern all but perfectly."

The fourth step is to compare your felt sense with this word or phrase to see if the gut feeling and the word resonate with or match each other. You do this by noting changes in your body, which might include twinges in the stomach, chest or hands. Any change from the state achieved in step one counts.

The fifth step is asking what is causing this twinge. "An accurate answer brings another shift or a slight change somewhere in your body," Ms Cymbalista says.

The last step is to accept these bodily shifts willingly because they might have led to new questions about WorldCom. The new questions suggest you compare the company's debt with that of similar companies or ask an analyst about the communications sector as a whole.

"As you articulate these felt senses, you separate them from emotions that often interfere with rational decision-making," says Ms Cymbalista. Focusing should clear one's thinking about investments, which, in turn, should improve investment decisions.

Most of us ignore "felt senses" because we cannot easily express them using language. Focusing lays open these gut reactions to specific descriptions not previously enunciated.

Because investment success represents survival in an indifferent or hostile financial world, any strategy or tool that can help achieve this success is worth investigating. desmondmacrae@nyc.rr.com