Brain Food #795: Against the obvious
Some questions to ask oneself when the world is driven by fear and greed
Thoughts of the day
During times of volatility, economist John Maynard Keynes said that humans are driven by their ‘animal spirits.’ Two of those are greed and fear. In the realm of investing, Warren Buffett said, “Be fearful when others are greedy, and greedy when others are fearful.” CNN even quantified this through its fear and greed index, to pinpoint what emotion is driving the market.
Recently, I wrote about the perils of taking the truth for granted, and our inability to predict the future. A related thought that has been circling my mind is about how mass mentality, or groupthink, can be a self-fulfilling prophecy, and what it means to go against the current.
Ultimately, we are emotional creatures, fascinatingly similar in the way we are driven by how we feel, whether that is our desire to be liked, not to be wrong, or not to lose. This is an unchangeable part of human nature. But by recognising when the animal spirits are active, we can learn to see opportunity where everyone sees danger, and to spot the dangers that exist in a ‘too good to be true’ scenario. To see through the fear, and through the greed, question them, and think for oneself.
Taking a contrarian view, against the obvious, can reveal opportunities where, at first glance, there seemingly are none.
What is everyone afraid of doing that you feel will be worthwhile to do? What is everyone doing too much of that you are also tempted to attempt? What are you doing too much of because a negative scenario seems too far removed? In the end, it is worth remembering that all good things contain bad things, and vice versa. Stepping outside of oneself to examine the motivations, or animal spirits, beneath our actions can be a helpful and revealing exercise.
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