We all like to think that we carefully gather and evaluate facts and data before coming to our conclusions. But we don’t. As I have pointed out previously, we want to think that we’re like judges, impartially and painstakingly examining the evidence before making the best, most rational determination possible. But we aren’t. We’re much more like attorneys looking for any scrap of evidence or argument that we might use to help to support our preconceived notions, truth be damned.
Indeed, we all tend to suffer from confirmation bias and thus reach our conclusions first. Only thereafter do we gather facts, but even so it’s only to support our prior commitments. We then take our selected “facts” and cram them into our desired narratives, because narratives are crucial to how we make sense of reality. They help us to explain, understand and interpret the world around us. They also give us a frame of reference we can use to remember the concepts we take them to represent. Perhaps most significantly, we inherently prefer narrative to data — often to the detriment of our understanding. Keeping one’s analysis and interpretation of the facts reasonably objective – since analysis and interpretation are required for data to be actionable – is really, really hard even in the best of circumstances (the crucial point of Daniel Kahneman’s outstanding Thinking Fast and Slow).
I offer this introduction because college basketball season is upon us again and it provides a helpful predicate to a perfectly obvious conclusion: fans (including your humble author) are inherently irrational. If we are exceedingly prone to various mental biases in life generally, when we’re in fan mode we can readily go off the rails entirely. And when we’re in fan/rivalry mode, almost anything is possible.
I watched last week’s Duke v. Kentucky game in a bar in Minnesota (where I was on business). I cheered, cried, cursed the evil John Calipari and his minions, and hated on the referees. It took every bit of effort I could muster to avoid being a total jerk, especially when it became clear that UK was going down.
I’m not sure I succeeded.
Even so, no matter how much I love sticking it to Kentucky, it’s nothing like what a Duke v. Carolina game does to me. With more than three decades of perspective from my school days, I can now see what a great coach and a great man legendary UNC-CH Coach Dean Smith was. The objective facts demand as much. He won a then-record number of games and did it “the right way.” More importantly, he was instrumental in the fight for racial justice and equality even at a time when he didn’t have all that much clout.
But to me as a student in Cameron Indoor Stadium on game day wearing the correct hue of blue, he was an arrogant blow-hard who sanctimoniously talked down to opponents, intimidated officials and got all the calls. Of course, now that Coach K has passed him on the all-time wins list, I’m a bit more willing to be gracious. Even so, I’m still perfectly willing to argue that Dean — while terrific at recruiting and preparation — was overrated as a game coach.
It shouldn’t have been surprising, then, that when Duke’s Mike Krzyzewski and Pat Summitt were named Sports Illustrated magazine’s Sportsman and Sportswoman of the year, that announcement was met with more than a bit of skepticism and consternation by many UNC-CH fans. After the news broke, I couldn’t help but take a peek at Inside Carolina‘s message boards for a bit of fan reaction, since internet message boards tend to take typical fan insanity and ratchet up the level of loony more than a few notches: confirmation bias illustrated.
I was not disappointed.
Some representative comments follow.
- “CongRATulations to coach summit.”
- “To be fair, that Sweet 16 finish with the pre-season #1 last year was a pretty solid accomplishment.”
- “Really.. Amazing!! I guess it is sportsman-like to curse like a sailor at officials. I guess it is sportsman-like to teach players to flop to fool referees. I need a new definition.”
- “Coach Rat would’ve been my 1,875,643,325,875,432…th choice.”
- “Leave it to the rat to turn The SI Sportsman of the Year Award, a previously prestigious award, into just another cheesey award.”
- “Does dSPN own SI too?”
- “Sports Illustrated has hated us for years.”
Here’s my favorite:
I guess it makes sense, if the definition of sportsman is ‘a d-bag who denigrates referees’. K is like the WWF (the environmental group): both make more money than they deserve, both are rotten to the core, but somehow both are believed to be saints.
Of course, a silly Duke fan had to make a trollish appearance in the thread to tweak the faithful. He noted that “I love any and everything that may ruffle the feathers of the Carowhina cheese and wine fans. Especially anything that pertains to Duke.” That bit of delightful wit (Noel Coward’s legacy is not in danger) got him summarily banned from the site.
As fans, the more reasoned among us often try to “put some lipstick on the pig” and gussy-up our insanity with perfectly rational-sounding reasons why we are better than them, even though we have long-since decided that it is so, facts notwithstanding. Indeed, some might argue that one of my favorite websites, the Duke Basketball Report, exists for precisely this reason (and I love it nonetheless). It’s the bias blind-spot on full display.
As a Duke alum and fan, I’m resigned to the reality that lots of people (and especially those wearing the wrong shade of blue) are going to think that Coach K is evil, that Duke gets all the calls and that the Cameron Crazies are a bunch of over-privileged poseurs no matter what a truly objective analysis of the facts might show. It’s both human and all but inevitable.
I’ll even go so far as to say that it’s perfectly okay to be utterly irrational about your favorite team. We’re fans — as in fanatics — after all.
This is all well and good — true even. But what do silly fans and our obsessions have to do with investing? A lot, as it turns out. You see, we’re not just talking about a fan thing. It’s a human thing.
As investors — as people — we are prone to the same types of foibles, obsessions and foolishness as lunatic sports fans (isn’t that phrase redundant?). As noted off the top, we reach our conclusions first and then run around trying to support them. We talk our books the way fans talk up their teams. We’re wildly overconfident about our books and ourselves.
Worst of all, even when we recognize our inherent weaknesses, we think they only apply to others. With respect to the things we focus a lot of time and attention on — like our work — we tend to see “our side” as not just true, but obviously true. It’s a by-product of the bias blind spot. Therefore, our strongly held positions aren’t really debatable — they’re objectively and obviously true. After all, if we didn’t think our positions were true, we wouldn’t hold them. And (our thinking goes) since they are objectively true, anyone who makes the effort to try should be able to ascertain that truth. Our opponents are thus utterly without excuse.
We’re fans of our books, of our investment approaches, philosophies, and of our styles no less than Carolina’s nonsensical and inherently crazy supporters are fans of their team. Try desperately to bear it in mind (and deal with the reality accordingly) — as fans and as investors, we’re just as nuts as they are. Terrifying, isn’t it?