
I’m Just Now Realizing How Stupid We Are - tokenadult
http://www.fool.com/investing/general/2014/06/11/im-just-now-realizing-how-stupid-we-are.aspx
======
bambax
Every one of those observations sounds extremely true to me.

Regarding the first one: _" changing your mind is one of the most difficult
things we do"_ \-- changing our mind is almost impossible; changing other
people's is down right impossible.

BUT

\- It's possible to influence people _before_ they have made up their mind.

\- It's also possible to reframe / rename / re-position a subject, so that it
becomes a new category about which people don't already have an opinion.
Politicians do it all the time (most people are opposed to torture, but
"enhanced interrogation techniques" sound both useful and reasonable, for
example). Marketers also do it, sometimes, but they should do it more.

On this last topic, this book is absolutely fantastic:

[http://www.amazon.com/Positioning-The-Battle-Your-
Mind/dp/00...](http://www.amazon.com/Positioning-The-Battle-Your-
Mind/dp/0071373586)

It explains why brand extension is almost always a bad idea ("Google Play",
OMG!!!!), and why "7Up: the uncola" is genius.

~~~
enjo
It is possible to change peoples minds, but the trick is that you have to
convince everyone around them first. Social proof is the most powerful force
in the universe. It's infuriating, but the research shows us time and time
again that most people simply choose the position they perceive to be most
popular.

It is, incidentally, why the internet is so dangerous. It is easier now, more
than ever, to surround yourself with people who confirm your beliefs ALL OF
THE TIME. If we're going to make decisions socially, that's a pretty worrying
state of affairs.

It is also why most meaningful change happens in generational cycles. At least
that is how it seems to me.

~~~
bambax
_It is also why most meaningful change happens in generational cycles_

"People don't change their minds. They die, and are replaced by people with
different opinions"

\-- Arturo Albergati, via Paul Graham
([http://www.paulgraham.com/quo.html](http://www.paulgraham.com/quo.html))

(Strangely, when one searches for that quote, the first hit is Paul Graham's
page; I'd like to know where exactly this was said, but couldn't find it after
a quick investigation).

~~~
VintageCool
That sounds similar to the Max Planck quote that "science progresses one
funeral at a time".

Actually, that might be paraphrased, the quote which seems more authentic
according to Google is this:

"A new scientific truth does not triumph by convincing its opponents and
making them see the light, but rather because its opponents eventually die,
and a new generation grows up that is familiar with it"

------
j2kun
> I've learned that there's a strong correlation between knowledge and
> humility. People who spend 10 minutes on Google studying monetary policy
> think they have it all figured out, while people with Ph.D.s and decades of
> experience throw up their hands in frustration. The more you study
> economics, the more you realize how little we know about it.

This is the problem with Congress making decisions about science, the
internet, and the economy.

~~~
autokad
what decisions about science would you be referring to?

~~~
pcrh
A lot of legislation cannot be approach scientifically, e.g. the right taxes
rates, etc. Other legislation can be very scientific, e.g. is marijuana
dangerous?

~~~
im3w1l
We may not be able to decide the right tax rate scientifically. But what we
can do is determine very accurately the consequences of the choice. If we
increase the tax rate x%, innovation will suffer y% but n less people will
have to starve in the streets.

~~~
jessaustin
Even this is grossly overestimating the powers of current economic analysis.
Many economists will give you this sort of ridiculous precision in advance,
but in retrospect all they'll say is "we can't run a controlled experiment so
you have to believe me that if we had done _more_ of what I recommended, the
results I promised would have occurred."

~~~
im3w1l
Fair enough. I should have said "what we could theorethically do" rather than
"what we can do".

------
nlh
> _I 've learned that how you reacted to past bubbles is a good indication of
> how you'll act to future ones. The same people buying dot-com stocks in 1999
> were buying Miami condos in 2006 and gold in 2011._

There was a saying that emerged in the first .com boom -- "You know we're in
trouble when the UPS guy is giving you Internet stock tips." Maybe we should
ask the UPS guy every few months what he's excited about investing in? Canary
in the coal mine, as it were...

~~~
FigBug
And now they are buying bitcoin.

~~~
NhanH
Without commenting on the success rate of bitcoin itself, the money being put
in bitcoin is still an order of magnitude smaller than the bubbles mentioned
in GP. The USP guy, more likely than not still doesn't know about bitcoin.

~~~
bushido
_> an order of magnitude smaller than the bubbles mentioned_

The thing about money and markets is it all _relative_ (%).

Whenever talking on these topics people revert to absolute($) comparisons,
this is where most analysis breaks.

I am not arguing or commenting on bitcoin success, just that your mention of
"order of magnitude" sounds like an absolute value.

~~~
NhanH
I agree with your remark about the relative and absolute comparisons.

However, in this case, the discussion were about the "popularity", or the
"reach" of bitcoin. The underlying assumption (by me) is that absolute value
would strongly correlate with the number of people knowing about bitcoin,
hence the absolute number remark.

------
11thEarlOfMar
Sadly, none of this would make any sense if I had not already learned it the
hard way.

~~~
arthurjj
I enjoyed the article but that is a good, if unintentional, criticism of the
article.

------
bushido
This is extremely insightful and applies to a lot of industries:

 _I 've learned that we can't tell the difference between luck and skill. Out
of millions of investors, a few will be phenomenally successful due to luck
alone, yet no one is willing to admit they are one of the lucky ones._

I recall reading this statement written in different words in a few articles
and essays from PG and others.

~~~
WalterBright
One reasonable test is if a person consistently is "lucky", then it is more
likely to be skill.

Steve Jobs, for example, made three fortunes. I suspect it is skill.

~~~
gaius
But had he not had the incredible good luck to meet Woz when he did, he would
have died penniless and alone.

------
Blahah
Mostly insightful, but this bit:

 _Those who criticize the behavior of "greedy Wall Street bankers"
underestimate their tendency to do the same thing if offered an eight-figure
salary._

You have to be greedy to go into Wall Street banking in the first place. Most
of us deliberately didn't become bankers because we aren't motivated by greed.
This makes bankers fair game for criticism.

~~~
njharman
"Most of us ... because we aren't motivated by greed"

History would indicate otherwise. Maybe most of us aren't dominated by our
greed to the exclusion of all else / to sociopathic levels. But, most of us
certainly are greedy. I suspect it's in our genes. Greed/hoarding (to a
degree) being evolutionary strengths.

~~~
Exenith
Some rudimentary consideration of what life is like in a tribe would suggest
that greediness and hoarding are evolutionary weaknesses. If you take too much
for yourself, others in the tribe get pissed off and get rid of you. If you
have a tendency to hoard things, you're going to have a hard time managing a
nomadic lifestyle that necessitates light enough loads to carry. Not to
mention -- things rot, things break, things get lost, and if you've just used
up all the natural resources around you, you're screwing yourself quite hard.

------
larrys
"Most of what people worried about over the last five years -- inflation,
rising interest rates, a double-dip recession, stagnant markets, Greece
leaving the euro, a government default -- never occurred."

Why? Because the reason most people are worried is based on something that
they've read which is often because of this:

"I've learned that journalists' need to write far exceeds the number of things
that need to be written."

The root of all opinion is generally what people are exposed to and what is
written by a third party (not even an expert) as opposed to what they have
actually figured out independently on their own or heard from multiple experts
(who may have differing opinions). In other words their bias doesn't come from
experience or informed opinion but merely what they are read that others have
written.

That's why polls are not as important as they look. Even if accurate they
merely measure what people read in the paper, online, or see on the nightly
news.

------
greenyoda
_" I've learned that journalists' need to write far exceeds the number of
things that need to be written. No writer can say to their boss, 'There's
nothing important to write about today,' although it is the truth most days."_

These words should be inscribed at the top of HN's "submit" page.

~~~
arbuge
This is perhaps doubly true for financial news and CNBC.

...make that most news now that I think about it. I can't remember the last
time I saw an article on CNN that was actionable in my life in any way. Not
sure why I bother to read the news most days, although it still feels like a
useful thing to do.

~~~
PhantomGremlin
I watch or read the news for "gestalt". Most individual articles are not
"actionable", but the aggregate over weeks or months probably is.

Unfortunately, the article's first lesson is that you probably _won 't_ change
your mind quickly enough to profit from anything you see on either CNBC or
CNN.

------
Nevermark
Humans became a technological species immediately at the critical point where
a few percent of us could be rational and original a small percent of the
time.

That was enough for knowledge to start snowballing.

In historical terms, that happened a few moments ago and we are still at the
mostly-stupid stage. Before we have a chance to evolve to be smarter,
technology itself will have left us in the intelligence rear view mirror.

No species lasts forever but we should feel successful for being the origin of
not just the next species, but the next order of life on Earth after DNA.
Self-designed life will be as profoundly smarter than we are, as multi-
cellular life became more interesting than the first microbes.

This is very inspiring to me. But if for some reason, you find it depressing
that our technological "children" will soon look nothing like us, there is
still time to find a way to transition your own mind into that next
generation. Just be prepared to change anything about your own biology that
holds you back, just like to learn you need to sacrifice any beliefs that hold
you back. Prepare yourself mentally now to sacrifice your biological substrate
and neural continuity for your new uber intelligence in a few decades.

------
cwisecarver
Thanks for the front-page love HN. I work at the Fool as a web developer.
Morgan has just been sent the link to this thread. Maybe he'll chime in if
there are questions.

------
Confusion

      I've learned that we can't tell the difference between luck 
      and skill. Out of millions of investors, a few will be 
      phenomenally successful due to luck alone, yet no one is 
      willing to admit they are one of the lucky ones.
    

and the same goes for CEO's.

~~~
lurkinggrue
Survivor bias is a bitch.

------
pessimizer
>I've learned that strong political beliefs in either direction limit your
ability to make rational decisions more than almost anything else.

Strong political beliefs in _any_ direction, not _either_ direction. This
complaint also relies on the fictional 'rational decision about a political
issue' vs. 'political decision' distinction, where your opponent is always
"playing politics", but you're always simply being empirical and pragmatic.

>I've learned that people's expectations grow faster than their wealth. The
country is richer than it's ever been. I don't think it's as happy as it's
ever been.

Not in the median it isn't. The fact that the nation's total wealth has
increased while median individual wealth has decreased is a lesson about
something, but not about the bulk of people's expectations rapidly growing.
What a lot of people want is what most people in the US actually had before
the 80s.

~~~
tokenadult
_> I've learned that people's expectations grow faster than their wealth. The
country is richer than it's ever been. I don't think it's as happy as it's
ever been.

Not in the median it isn't._

Your claim is that median wealth has in some meaningful sense decreased in the
United States during my lifetime of just more than half a century. Because of
various family circumstances and my own career choices, I have generally been
below the United States median in income much of my working life, and have
always been below the United States median in financial assets or possession
of land and real property. And yet I have every reason to believe the author's
claim that "The country is richer than it's ever been," and not just for the
fat cats, but for me too.

For one thing, we have this newfangled Internet technology that allows you and
me to have a thoughtful discussion while shattering barriers of distance.
Having once lived overseas when my only affordable means of communication with
my homeland was postal aerograms, I count this as a HUGE increase in wealth,
which is certainly enjoyed by most at-or-just-below median people in most
developed countries. (I communicate with friends and relatives from a variety
of countries online every day.)

So I call baloney on your assertion. But perhaps you have evidence that will
convince to change my opinion. Discussing this issue thoughtfully will also
make both of us richer than we used to be, so I am all ears.

AFTER EDIT: You do make a good point that political opinions can (and do)
differ along more than one dimension. There are many, many different kinds of
political opinions, including many that are inconsistent with other opinions
held by the same person.

------
kqr2
For those interested in a good book about human biases and thinking, check out
_Seeking Wisdom From Darwin to Munger_.

[http://www.poorcharliesalmanack.com/seeking_wisdom.php](http://www.poorcharliesalmanack.com/seeking_wisdom.php)

[http://www.amazon.com/Seeking-Wisdom-Darwin-
Munger-3rd/dp/15...](http://www.amazon.com/Seeking-Wisdom-Darwin-
Munger-3rd/dp/1578644283/)

------
sutterbomb
> I've learned that people are twice as biased as they think they are, which
> is precisely why biases are dangerous.

This is a bit backwards. It's more like an inverse relationship - if you don't
think you have any biases you are likely to be the most biased. It's probably
a factor of 2 for those who admit a level of bias, and a much greater factor
for those who don't admit bias.

~~~
thewopr
Well technically, there would be no multiplicative factor for those who don't
admit bias, because zero times anything would be zero. Your point is
nonetheless a good one.

------
jeremysalwen
I don't think it's true that "The country is richer than it's ever been."
According to this graph, that would be in 1999, not now.
[http://upload.wikimedia.org/wikipedia/commons/3/37/Median_US...](http://upload.wikimedia.org/wikipedia/commons/3/37/Median_US_household_income.png)

~~~
rwl
I think the author is probably talking about total wealth, not median income;
by that metric, we're richer than in 1999 (though it is less equally
distributed), according to this graph:
[https://upload.wikimedia.org/wikipedia/en/a/a3/Graphic.png](https://upload.wikimedia.org/wikipedia/en/a/a3/Graphic.png)

But whether we go with total wealth or median income, really the point here is
the following sentence in the article: _I don 't think it's as happy as it's
ever been._

I think the author is taking the long view here, not comparing the present to
1999 or 2009. The claim is that despite having more wealth (by either measure)
in the last, say, 20 years than at any other period in our history, we aren't
happier because of it. I'm inclined to agree.

------
roymurdock
I disagree with this one: _I 've learned that Winston Churchill was right when
he said, "You can always count on Americans to do the right thing -- after
they've tried everything else." Congress is a basket case 99% of the time, but
when things are truly at the precipice it gets things done._

The "right" thing is pretty subjective, and I would argue that if we were
doing the "right" things, we could have avoided a partial government shutdown
last year as Congress struggled through the debt issue. Speaks to the author's
comment about short-term thinking:

 _I 've learned that short-term thinking is at the root of most of our
problems, whether it's in business, politics, investing, or work._

It's not a good sign that we are allowing ourselves to reach moments of crisis
in which we are forced to make the "right" decision. What if that decision
comes down to defaulting on our debt and wronging the rest of the world?

~~~
d0mine
> I've learned that short-term thinking is at the root of most of our problems

Greedy (aka "short-term thinking") algorithms provide optimal solutions for
many (but not all (obviously)) problems.

~~~
pbhjpbhj
It sounds like you've missed the point - yes the optimal solution short term
might be one action, but sometimes _losing_ in the short term is more optimal
in the long term. Like say, a vote for socialism reduces a companies profits
but retains the humanity of government in the long term (made up example
obv.).

Moreover, long term solutions encompass the solution space of short term ones
- so if short term thinking is required then you can choose the short-term
thinking solution that optimises for the long view outcome.

~~~
d0mine
Perhaps the reference to computer science was not very clear in my previous
comment [1]. "Optimal solution" means the best possible (globally) over all
possible dimensions including time.

[1]:
[http://en.wikipedia.org/wiki/Greedy_algorithm](http://en.wikipedia.org/wiki/Greedy_algorithm)

The point being is that even a short-term thinking may yield long-term
benefits sometimes.

------
adventured
"I've learned that people's expectations grow faster than their wealth. The
country is richer than it's ever been. I don't think it's as happy as it's
ever been."

Greater than half the country did not participate in the supposed recovery.
Check out the plunge over five years in the labor force, the unemployment rate
among teenagers, blacks, hispanics, the use of food stamps, the use of ss
disability, etc. Real wages haven't moved in 40 years. It's little wonder it's
not an overly happy country, most people have not participated in the Fed's
asset inflation party. The rich are richer than they've ever been, the poor
are the poorest they've arguably been since the great depression. Not arguing
the why's mind you, but there is a very good reason the country doesn't seem
very happy.

------
ahoge
> _I 've learned that there's a strong correlation between knowledge and
> humility._

It's the Dunning–Kruger effect:

[http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect](http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect)

~~~
enraged_camel
No, I disagree. There's a big difference between humility and lack of self-
confidence.

~~~
ahoge
That's just the most extreme form. As with most things, it's a gradient.

If you know that there are things you don't know, you'll probably be more
humble. If you feel overwhelmed, because there doesn't seem to be an end in
sight, it might affect your confidence.

------
opendais
Tbh, "I've learned that changing your mind is one of the most difficult things
we do. It is far easier to fool yourself into believing a falsehood than admit
a mistake."

That is probably the one from which many other's stem. If you only make the
same mistake a couple of times before changing your mind, you are far, far
better off than everyone else because I've seen people repeat the _exact same
mistake_ dozens of times.

Tbh, I have too...which is probably why I generally assume I've made a mistake
until someone tells me otherwise alot of the time. Well, except for a few
things I feel strongly about that aren't simple binaries where everyone might
have radically different end goals.

------
bsirkia
I've always been a big fan of Motley Fool, particularly their podcasts, and I
think it's for the same reason I like this article: their contributors seem to
value honesty, to point of self-deprecation, over the desire to appear
superior.

------
blahber
/insightful

Not said often, but thanks for taking the time to submit.

> I've learned that there's a strong correlation between knowledge and
> humility.

Although I think, arrogance is sometimes required to make people understand
that it's the Right Thing.

------
tthomas48
Actually one of the things that gives me the most hope is the fact that
Godwin's law is so much less frequently invoked. I think after a couple
decades of being able to vomit up the first thing on our minds, many people
are learning to take a more measured approach online.

------
31reasons
I've learned that there is no reason to take everything you read as gospel.

------
PeterWhittaker
Great lessons, for investors, business folk, developers, and actors.

~~~
stinos
Or rather, for everyone, at least those that are not economics related. My
favourite one:

"I've learned that strong political beliefs in either direction limit your
ability to make rational decisions more than almost anything else."

Actually you can just leave the 'political' away and it only becomes more
general truth.

~~~
enraged_camel
Yeah, pg wrote an essay about this and it's one of my favorites.

[http://www.paulgraham.com/identity.html](http://www.paulgraham.com/identity.html)

------
jwheeler79
i was not at all enlightened by this article and took most of the points as
basic common sense everyone should have (but unfortunately everyone does not).
the fact that the author had to come to these conclusions 'over time' means
he's susceptible to being just another damn fool in the first place.

------
fleshweasel
"There's nothing important to write about today." Are you shitting me?

------
neotoy
"excessive pessimism" stopped reading right there. All credibility lost.

------
wwwwwwwwww
If you enjoy reading and absorbing this kind of knowledge, I suggest reading
Meditations by Marcus Aurelius. It's a book of personal
thoughts/writings/observations that Aurelius wrote while he was emperor of
Rome. It's absolutely stunning how much knowledge from back then is still
applicable in the modern world.

[http://en.wikipedia.org/wiki/Meditations](http://en.wikipedia.org/wiki/Meditations)

~~~
stinos
+1 for bringing this up. Might have been on HN before, but it cannot be
stressed enough what a great mind he was. Especially his striving for 'good'
in his writings is leaves a bitter taste in my mouth everytime I read it
because I _know_ I'm still far from being good. Well, something that can make
you think like that is superb.

