Skip to main content

Beware of Neat Stories

We are suckers for stories.

Once in a while, a set of facts challenge our worldview. But our brain really tries to fit into the neat story that we tell ourselves. The world is messy, and sometimes stochasticity thwarts even the best laid plans.

It's extremely hard to do — but I believe people who excel in developing new ideas actively seek out information that clashes with their mental models. If you can't perceive change, you can't adapt.

Skepticism of neat stories is a great shield against herd behavior. And we all know herd behavior is responsible for the success of all scams.

Labels:

Comments

Post a Comment

Popular posts from this blog

Against Perfection

Showing up matters. Often the hardest thing to do is to put in effort when we lack motivation. Everyone has off days. In those days, doing our best counts for a lot. If we want to do something everyday, say read, write, meditate, or exercise, doing less that we do usually can still be valuable. Keep the streak going. It doesn't have to be all or nothing. "Do what you can, with what you have, where you are.”— Theodore Roosevelt “The best is the enemy of the good.”— Voltaire “Quantity has a quality all its own.” — Thomas A. Callaghan Jr.
Post a Comment
Read more

Quotes from "The Social Leap"

These are the lines from William von Hippel in his book “The Social Leap” that I found to be incisive and insightful. “The ability to kill at a distance is the single most important invention in the history of warfare, because weaker individuals can attack stronger individuals from a position of superior numbers and relative safety.” “As if division of labor were not enough, Homo erectus then sealed the deal with the single most important innovation in human history: the control of fire.” “Long before the invention of writing (which is only about five thousand years old), human culture had become cumulative by virtue of our oral storytelling traditions .” “When we weigh up the costs and benefits, we see that farming afforded our ancestors some assurances against starvation, but at the cost of various new illnesses, reduced stature and longevity, excruciating halitosis, and often a far longer working day. The end result was that early farmers worked harder to achieve a worse life than ...
Post a Comment
Read more

Fragility of Self-fulfilling Prophecies

We learn by copying. A baby learns to talk by listening to their parents and trying to emulate their tone and the sounds they make. Even in our adulthood, we often judge our success by comparing ourselves to our peers. What we watch, what we read, what we listen to, all depend to some extent on our family members or our friends. It's no wonder that's hows bubbles form in markets. People buy certain stocks, gold, or houses, not only due to their value, but also due to simple herd behavior. And it works, some of the time. That's how asset values sometimes balloon out of proportions. But these inflations are very sensitive to outside shocks. Once the spell is broken, everyone joins a mad stampede to get out and the prices of the assets drop like a rock. This happened to the price of houses in 2008 (in the US) and the price to gold in 2011. The implication for us is to lead our lives according to predetermined principles, and minimize following our peers all the time. Otherwise...
Post a Comment
Read more