It isn’t “Weird Science” (Oingo Boingo)…
…or “Brain Damage” (Pink Floyd)…
…or even “Insane in the Brain” (Cypress Hill).
It’s utterly human (and I write about it often). We are all deeply flawed. We have inherent flaws and weaknesses that impede good judgment and good behavior. Behavioral finance has done a pretty good job outlining these foibles and music does a great job demonstrating them. So let’s get started with our Behavioral Finance Playlist. Continue reading
Confirmation bias is our tendency to notice and accept that which fits within our pre-existing commitments and beliefs. If you doubt its existence, power and importance, you might look at the tweets on college football from this fall that follow (I wrote about it in the college basketball context here). Even if you don’t doubt confirmation bias, looking at these tweets is still a lot of fun. Everyone tends to think that everyone else is out to get them and their team. As Paul Simon put it in The Boxer, “…still a man hears what he wants to hear and disregards the rest….“ By inference, at least everybody seems to agree that they hate ESPN!
Like the cat in the video, we tend to be so focused on what we’re focused on that we miss the obvious right under our noses.
Barry Ritholtz has an excellent post up this morning (as usual). In it, he outlines his simple, 3-step process to avoid big mistakes and to keep errors manageable.
- Rule #1: Expect to be wrong
- Rule #2: Admit Error
- Rule #3: Repair
Weather forecaster Lisa Hidalgo wonderfully illustrates our need to recognize when things go wrong and adjust accordingly in the video below (even though the original error doesn’t appear to have been her doing). You might also want to read Joe Posnanski’s fine article on Rick Ankiel swinging for the fences, a rare example of an athlete adjusting when things go wrong and re-inventing himself to save his career.
Enjoy this flash mob Christmas mash-up presented by DanceWorks Boston.