Decisions, decisions

We use our brains to think.

Everyone understands that, there’s nothing new or ground-breaking in the above statement. Except it seems evolution hard-wired our brains to do anything and everything we possibly could do instead of thinking. The brain is less of a thinking machine – more a thinking avoidance machine. How so?

Our brain requires oodles of energy to function. Our grey matter uses 20-25% of our total calories burnt every day. So in our former hunter-gather times, when Homo Sapiens went days and days without food, our brains were trained to run in eco-mode. Less decision time = more down time = less calorific requirement. Less thinking, more thinking avoidance.

These days, understanding how our brain works has become increasingly important when it comes to many challenges including investing. We process so much information in a day that our brains cannot think about it all. It goes caveman more often than we realise

How does our brain do this? The brain creates short-cuts. Instead of considering the problem and burning more precious calories, it efficiently creates an answer based on our memory of past experiences. Before it ponders the new problem it simply jumps to an answer it previously had. It has efficiently therefore avoided thinking.

Heuristics

It’s almost Christmas. Time for the Christmas re-run of “Only fools and horses”. No doubt we all remember the Trotters, Delboy and Rodney. Names to all except to Trigger, who always addressed Rodney as “Dave”. It was a brilliant series-long, standing joke and a great example of the brain’s avoidance of thinking. In Trigger’s memory, Rodney’s name was mis-filed originally as Dave. Thereafter without thinking always retrieved as Dave. No thought was required on subsequent meetings, which seemed useful for Trigger’s dim character. The audience grew to expect him to always address Rodney as Dave. We still laughed. Thinking about it, I’m smiling now. Both the joke and remembering it was funny are examples of Heuristics – the name for our brain’s shortcuts. Trigger repeated the incorrect Dave shortcut, we laughed. The series creator, John Sullivan repeated the joke, we laughed over and over, without thinking. Kind of heuristics laughing at heuristics.

We are all like Trigger

I’m not suggesting any individual is dim. We are all dim in certain complex areas. Our brains internal wiring efficiency has prevented us all from forming fresh opinions every time we encounter a new nugget of information. We seldom question how we arrived at the answer we just came up with. We seldom ask ourselves; Did I research what I just said? Could my previous answer or opinion be wrong? Questioning ourselves would just take more precious energy.

Can we change for the better?

I believe we can if we consider where our answers came from. However, even if we can quote peer reviewed papers as our proof source it is important we didn’t just read the executive summary, trotted out by much of the mainstream media. It has been demonstrated that;

• In order to be published in the first place your paper has to follow the prevailing consensus.
• Even in prestigious publications such as The Lancet, perhaps as much as 40% of the research data has not stood up to detailed scrutiny.
• Investment theories remain just that. Theories built in a perfect rational world which doesn’t exist.
  
  Sometimes we need to research for ourselves, but in many cases we don’t have time to conduct the research necessary to form our individual opinion

Five types of non-thinkers – Are you one of these?

The agreeable type

This heuristic shortcut is used by those who just want to follow what the herd thinks. Disparagingly known as “sheeple” by disagreeable types(see below), because these individuals trust and believe everything government and the media tell them. Even the “facts” quoted on social media. For those of you who have never heard of sheeple, the word is a portmanteau of the words sheep and people. (I just wanted to use the word portmanteau).

The disagreeable type

The individual who believes the opposite of the status quo . They normally transition from sheeple to this non-thinker type, where they disagree with everything they are told by government and media. They believe they are not gullible like the sheeple, they are the stand out black sheep. But once again our complex brain has fooled them. It requires as much brain power to disagree as it does to agree. Absolutely none. Did they consider any facts before they leapt to their contrary perspective? No. Experience has taught them that it is all lies so stick with that assumption.

The Disciple

I’m on dangerous ground here with the atrocities which continue currently. But briefly, it is easy to see that belief in an ideology commands compliance without thought. Religious genocide continues unabated. Individuals are told what they must do, they carry out their actions without thinking. In many cases outside of the free world they have no choice.

The Supporter

I’m not a true supporter of Manchester United anymore as I gave up my season ticket 5 years ago. Perhaps I’m still a fan? Perhaps not. A true fan agrees with everything his fellow supporters agree on. A true fan hates everything his fellow supporters hate. They cannot admit any other team is better than United or City or Liverpool. Ever. Belonging to a tribe or support group is comfortable. It’s easy, and again requires no personal thought whatsoever. What do I think? I don’t know, what do my fellow supporters think?

The Averager

Here it looks like our brain has considered both sides of the evidence to form an opinion, but it didn’t, it split the difference and directly sat on the fence. Again not one calorie expended.

As you can see there has been absolutely no thought required for any of the tricks our mind has played on us in the above groups.

Uncle Albert

To return to “Only Fools and Horses” once again, Uncle Albert’s catchphrase was “When I was in the war…..” Many of my opening sentences these day seem to start with “ When I was at university….”.

Although I left in 1983, perhaps because I left university 40 years ago, I was taught to be critical. Not cynical nor just a compliant believer of facts. I was taught to question the facts, to root out the proof before I presented any work. It seems the scientific process is becoming increasingly rare these days. That process has stuck with me. I could go on to say “The young ones today….”, but I’m not that old yet. Suffice to say I believe “groupthink” is far more prevalent today with younger generations than it was in the past. Perhaps universities are to blame?

Merry Christmas!

Howard, Lesley, Charlotte and Melissa all hope you all enjoy this festive period. If at any point you wish to impress someone, you could always use the word “Portmanteau”.