Today I want to talk indirectly about Bias. I have named this Blog “Beware of Opinion” and I have planned all along to write about the dangers of ‘Opinion’ but now I have actually started prodding the keyboard, I realise that I am really talking about Bias.
I am not sure where this is going to go. You might think I have a Structure to my Blogs and I guess I do to an extent. But I have been thinking this Blog over for several days and I sat in the Kitchen with a blank sheet of A4 a few minutes ago and I just scribbled down, in no particular order, the points I wanted to cover.
I guess this might be a weird way to write (do all Bloggers do it this way?) but I suppose it keeps me interested because I am intrigued to know where this is going to go. Apologies if it makes it miserable for you, my Dear Reader (note singular !!).
Anyway, that is just my Opinion……..or is it oSPINion?
The Key Point
I am now going to throw you even more. I am putting a Paragraph from the ‘Conclusion’ of this Blog right up front here - so it appears twice. This is because I think it is utterly critical and I want to make sure this really sinks in:
“The Key thing to remember is that EVERYTHING you read has Bias and is Opinion, but, at the End of the Day, it is ONLY YOUR OPINION THAT MATTERS. So don’t just accept the Opinions and Biases of others - apply your own thinking and come to your own decisions.”
Source: Wheelie, today, end of this text.
So, what’s the Problem?
Getting back to Stocks and Bias, the main thrust of my scribbling is to warn you that ALL writing, in whatever form, has Bias.
I may be stretching a point, but perhaps I would be justified in saying that writing connected to the subject of Stocks and Investing has more Bias than almost any other subject on the planet (ok, maybe Politics can trump this).
I suppose the nub of the issue is the difference between ‘Facts’ and ‘Opinion’ - it is vital for a Successful Investor to be able to differentiate between them - and even the Best Investors will misjudge this sometimes. In theory, Facts are Facts. They are objective, they are precise, they are verifiable, they are available, THEY ARE TRUE. In reality, I suspect we are rarely provided with information that satisfies these simple criteria (there are probably more criteria but I just bashed that list out in a 20 second brainstorm - no effort from WD as usual !!).
In the Real World (and don’t forget, that is where most of us are, although looking at some Bulletin Boards does make me wonder sometimes - and I am writing this on Black Friday, which is like an alternative riot where people go mental but pay instead of looting. Probably many of the same people who rioted a couple of years back), Facts are taken by Human Beings and transformed into Opinion. For a huge chunk of the time, this is a Deliberate distortion; other stuff is distorted unintentionally - in fact, it is Subconscious.
ALL INFORMATION HAS BIAS.
It may surprise you to read me saying this, but every piece of WheelieDealer text you read is biased. Yep, the whole shebang. All of it. Nothing but a load of distorted tripe. Not worth reading.
My Tweets, my Blogs, all the text on my Websites, everything, it is all distorted, biased, information.
WOAH !! Don’t turn off your Fone/Tablet/PC yet - I haven’t got to the point. Yes, Yes, I know I just told you it is all sh*te, but please hang on and read the next bit.
The Case for the Defence - Subconscious Bias
I know fully that WheelieDealer is utterly biased - BUT I DON’T MEAN IT TO BE. This is the point - even when the Author is being 100% Honest and trying to be Objective - they are not. It cannot be helped - it is a Subconscious Bias that seeps into everything. I try to never be deliberately biased and I see my own Personal Integrity as critical in everything I do - but nonetheless my Subconscious biases are plastered everywhere. With luck, as time goes on and you get used to my Output, you will be able to understand my Biases and you will make allowances for them - and in truth, you will apply your own Subconscious Bias to what I write !!
Confused? I am I tell you.
This is far worse - although it is probably easier to spot and the Source of a particular piece of Information can give you a good idea as to what kind of Bias it may contain - and to be on the lookout.
Let’s cover some examples:
This is not an exhaustive list, but it should have fired up your brain to start considering what Bias is around you and in the Information you read. There is also considerable Subconscious Bias with all of the above examples - this Subconscious Bias can sometimes arise from Psychological ‘Anchoring’ where writers get so entrenched in their own position, that they fail to see flaws and cling on to mistaken beliefs - especially the case on Bulletin Boards.
What can we do about it?
Well, I am sorry to say it, but it is probably very hard to counter these Biases - but at least if you can realise they exist then you have a chance of reducing their impact - but you will get caught out, especially by the more subtle, subconscious, Bias.
Here are some approaches that may help:
I think this whole area of Opinion and Bias is hugely misunderstood and under-appreciated. It is especially a problem for New Investors - I guess many Old Hands have learnt from experience how to avoid such Biases, and it is quite possible that they have never even considered it as a separate Subject - at least my Blog may highlight the issue.
The Key thing to remember is that EVERYTHING you read has Bias and is Opinion, but, at the End of the Day, it is ONLY YOUR OPINION THAT MATTERS. So don’t just accept the Opinions and Biases of others - apply your own thinking and come to your own decisions.
Other people’s opinions do not make you money - in fact, they probably lose you money. Only Your Opinion makes you money - be doggedly self centred in this regard - but generous in most other aspects of your life. Be nice to people, think of it as karma, feed the ‘Trading Gods’ and they will look after you.
I truly believe that you will not make money if you have a black heart.
The other day I was looking at a Twitter Feed from someone and it was full of spite, hate, bitterness and vitriol - what really amazed me was that they had 400 Followers - why on earth do people follow such childish and nasty behaviour? I really believe that stupid people like this will not make money - after all, if they were successful, surely they would be happy?
As the Red Hot Chilli Peppers sang, “give it away, give it away, give it away, give it away now…”
Finally, remember you too have Biases - but these are really the subject of a lot more Blogs on Psychology to come I guess…….
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