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My mother used to read bedtime stories to me when I was young. While she read the usual children’s books of the day, she also sprinkled in a good dose of folklore, fairy tales, and mythology. I was particularly fascinated by Greek mythology and have kept that interest up over the years. Recently, I reread the story of the god Apollo who was so infatuated by the priestess Cassandra that he gave her the ability to see the future to gain favor with her. However, when she didn’t return that favor, he could not revoke the gift of foresight, but he could nullify it by cursing her so that no one would believe her.

You might think it would be difficult to manipulate people so that they don’t believe someone who is consistently right, but it actually isn’t all that hard. All you have to do is change the perceived credibility of a person by making them unlikable.

Research by Pilditch, Madsen, and Custer (published in the National Library of Medicine) explained, there are “…two main routes to determine veracity; the perceived credibility of the source, and direct evaluation via first-hand evidence, i.e. testing the advice against observation.” Their overwhelming conclusion was that the veracity of information is “…interpreted in light of the perceived credibility of the source, such that beliefs from high trust sources are taken up, whilst beliefs from low trust sources are treated with suspicion and potentially rejected…” And once a source is perceived as credible (or not credible) it is difficult to change that perception. As the researchers discovered, “…sources accompanied by a high trust cue not only get away with communicating falsehoods, but see their perceived credibility increase, whilst sources accompanied by low trust cues not only have truthful communications rejected, but have their low trust penalized even further.”

The reason for this odd outcome is because we perceive credibility emotionally, instead of factually. According to Professor Isabelle Jia of Claremont Colleges, there are “…two main components [of credibility]: 1) expertise and 2) trustworthiness.” However, there is a third factor “…related to credibility, likability…” And while it “…is not considered to be a component of credibility…” likability is a factor that significantly influences our perception of a person’s credibility. As a matter of fact, Robert V. Levine in Persuasion: So Easily Fooled emphasizes that “More than any single quality, we trust people we like.”

I first became aware of the power of likability from “Thinking, Fast and Slow.” Daniel Kahneman writes that “…when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.” So, when an executive was asked the difficult question (should I invest in Ford stock?), “…the answer to an easier and related question (do I like Ford cars?) came readily to his mind and determined his choice.” Similarly, when evaluating the ability of experts, we subconsciously substitute likeability for credibility, because it is so much easier than finding answers to questions about expertise and trustworthiness. What’s even more alarming, says Philip Tetlock (an expert on experts), is we “…don’t demand evidence of accuracy [from trusted experts] …Accuracy is seldom determined after the fact and is almost never done with sufficient regularity and rigor that conclusions can be drawn.”

Politicians know what Apollo knew, we don’t believe people we don’t like, which is why negative campaigning is so pervasive. Conversely, advertisers are aware that we trust people we do like. In other words, we judge the messenger instead of the message and we judge the messenger on the wrong criteria. As a fiduciary (or other times good judgment is needed), I can’t substitute likes for observable evidence. I need to diligently evaluate the veracity of information I use and the credibility of experts I trust, instead of accepting or rejecting messages and messengers based on likes and dislikes. By the way, the likeability bias is a curse we all share. It’s not avoidable, but it is manageable if we’re aware of it.

I was having a conversation with my wife about the explosion of knowledge, when I heard
myself say -- “Just because we are more knowledgeable doesn’t mean we are less ignorant.”
While it isn’t unusual for me to express thoughts out loud, this one caught my attention
because I deal with knowledgeable experts all the time and I am supposed to be one myself.

To connect the dots, I looked to Daniel Kahneman’s new book (Noise: A Flaw in Human
Judgment), in which he explains that objective ignorance stems from “…intractable uncertainty
(what cannot possibly be known) and imperfect information (what could be known but isn’t).
And as theoretical physicist John Wheeler counterintuitively informs us, ignorance is growing
because “We live on an island surrounded by a sea of ignorance. As our island of knowledge
grows, so does the shore of our ignorance.” However, Kahneman says the real problem isn’t
ignorance, it is that experts “…underestimate their objective ignorance.” They are strikingly
oblivious to their limitations, which affects not only their “…ability to predict events but even
their ability to understand them.” So, when it comes to political or financial events, where we
really need to know what to do, the answers from the “…experts are stunningly unimpressive.”

My qualifier about “political and financial events” is important here because objective
ignorance has qualifiers. The reliability of expert judgment has everything to do with the
environment in which an expert is operating. In what Kahneman calls high validity
environments there is regularity, so cues and patterns can be learned. He gives examples of
physicians, nurses, athletes, and firefighters as experts in “…complex but fundamentally orderly
(high validity) situations.” On the other, he notes that political and financial environments have
such low validity that he refers to them as “wicked” – noisy environments with lots of random
variables. In such environments the limits on expert judgment “…is set not by the cognitive
limitation of forecasters but by their intractable objective ignorance of the future.”

Admitting that the future is unpredictable, Kahneman asserts, “…might seem to be stating the
obvious… However, the obviousness of this fact is matched only by the regularity with which it
is ignored…” The reason for the blindness is that experts (as do the rest of us) trust their
intuition, when “…the facts deny them the sense of understanding they crave.” Interestingly,
the experts with the clearest theories of “…how the world works were the most confident and
the least accurate.” So, it appears that the cautionary advice of poet Alexander Pope is as
pertinent today as it was 300 years ago – “Be sure yourself and your own reach to know, How
far your genius, taste, and learning go; Launch not beyond your depth, but be discreet, And
mark that point where sense and dullness meet.” Ruminating on this, I realized that knowledge
without humility leads to overconfidence, increasing ignorance instead of decreasing it.

In the “wicked” world of finance, where a noisy environment conspires with confidence to
make even the best experts ignorant of their ignorance, it is important to be humble and admit
mistakes. As scholar C. S. Lewis advises, “If you’re on the wrong road, progress means doing an
about-turn and walking back to the right road.” And that is why when I know I am on the right
road, I consider I could be wrong because confidence is a feeling that stems from both
knowledge and ignorance, but you never know the point where one ends and the other begins.

Recently I gave two different women diamond engagement rings. I even got them together in the same
room, so they could compare rings. Not only was there no jealousy, but they were also both absolutely
thrilled for each other. Since I’m neither the world’s biggest jerk (debatable) nor the greatest lover
(laughable), what gives?

What gives is one ring is a memory and the other is a promise. The first ring belonged to my wife,
Barbara. It was a symbol of our love and lifelong commitment to each other. When I put it on her finger
45 years ago, I promised to take her as my wife “…to have and to hold from this day forward, for better
or worse, for richer or poorer, in sickness and health, to love and to cherish, until death do us part.” The
chorus to a White Lion song says, “All through your life, I’ll be by your side, till death do us part.” And
that was where I was, by her side, when death parted us two and a half years ago.

That ring is now a family heirloom that will be passed down for generations to come. It is a reminder, to
paraphrase Proverbs 13:22, that through a life well lived, Barbara left an inheritance for her children and
for a thousand generations to come. My oldest granddaughter is now the keeper of Barbara’s ring.

The second engagement ring is on the finger of my wife, Jill. It is a promise to love her and a
commitment to stand by her. On the Handmade Engagement Rings website, it is noted that “in antiquity
it was believed that the ring finger had a direct connection to the heart and so the partner put the ring
on the left hand of his fiancée - the side of the heart – as a sign of infinite love and eternal connection.”

Love may be infinite and eternal, but Ecclesiastes reminds us that life isn’t. It is short, fleeting, and
meaningless. As the Message version so graphically describes, “…there’s neither work to do nor
thoughts to think in the company of the dead, where you’re most certainly headed.” While this might
not be encouraging, it is realistic. I know full well after watching a spouse die and then three weeks later
being diagnosed with kidney cancer that death is an impossibility that suddenly becomes a reality.

However, accepting this reality is not morbid or depressing. In a strange way, it is quite freeing because
you start thinking about how to live. In Living Life Backwards, David Gibson mentions that “We tend to
live as if the one thing that is certain will never come… [but] my death is certain… it is the timing… that is
uncertain… So, what should life in the meantime look like?” His answer, which he gleaned from
Ecclesiastes, is to “enjoy the gifts God has given you, the simple things that give you pleasure.”

Gibson says that “Gift, not gain, is your new motto. Life is not about the meaning that you can create for
your own life, or… that you can find in… your work and ambitions. You do not find meaning in life simply
by finding a partner or having kids or being rich. You find meaning when you realize that God has given
you life in his world and any one of those things as a gift to enjoy.”

That’s why Ecclesiastes directs us to “Enjoy life with the woman you love. Cherish every moment of the
fleeting life which God has given you under the sun. For this is your lot in life, your great reward for all of
your hard work under the sun.” And that’s why Gibson urges us to “…cherish and protect the person
God has given you… If you are too busy to enjoy the life you have together, then you are too busy.”

I gave two rings. One reminded me life is short and the other that a spouse is a precious gift. Based on
that reality, I changed the way I live. I see my life, wife, family, and friends as gifts to be enjoyed for as
long as I have left. This Christmas, if you love someone, I encourage you to -- in the words of Cody
Johnson -- “Hold 'em as long and as strong and as close as you can, 'til you can't.” Merry Christmas

When I get wound up about some political issue, my wife leaves the room. It is a trick she learned from my secretary, who does the same thing when my obsessive compulsiveness kicks in over an inconsequential event. It’s also a trick that we should all learn about consuming news, writes Mark Manson in his blog “Why You Should Quit the News.”

In short, he says you should quit the news because “…the vast majority of news is… of little relevance and utility, promoting skewed and inaccurate perceptions of the world, of other people, and of ourselves. It generates stress and anxiety, causes greater distrust in others, and can actually make us less informed about the world…”

The problem isn’t that information is bad, it is that the goal of the news media is not to inform, but to get your attention. What they are doing, Manson explains, is taking advantage of cognitive biases “…that we all fall victim to, and [using] them to keep us engaged and wanting more.” It is no different than what video gaming companies do to keep their users addicted.

The result, according to Manson, is that the “…news media optimizes information that feels important with little regard to its actual importance.” Such information is “immediate, fast-moving, narrative-driven and highly visible… The problem is that the most important information is usually long-term, slow-
moving, impersonal, abstract and invisible, and not necessarily negative.”

The financial news media is no different notes Jeff Sommers in When You Think About Investing, Don’t Think About the News. To prove his point, he quotes Nobel laureate Richard Thaler: “Sometimes you’ve got to just turn off the news. Don’t pay any attention to it.” His reasoning is the same as Manson’s, in that the focus is on short-term emotions instead of long-term thinking. “This is concerning,” say the authors of Noise: A Flaw in Human Judgment, “because judgment has an emotional component. The psychologist Paul Slovic terms this the affect heuristic; people determine what they think by consulting their feelings.”
Consequently, our judgment is impaired by watching alarming newscasts about stock markets. We think we are being rational when we are in reality panicking because we “come up with plausible rationalizations for our judgments and… actually think that they are the cause of our beliefs.”

At times like this, when markets are uncertain and the news is scary, it is more important than ever to “…stick to your plan,” says Thaler. “Don’t think you are a genius and you can beat the market. Because you probably can’t… My thing is, that we know that any sudden moves by individual investors… if anything, they’re more likely to be wrong than right because our instinct is to sell when markets go down and to buy when they go up — and buying high and selling low is just not a good strategy.”

After hearing Thaler’s comments about sticking to a plan, Sommers asked him the logical question: “So what constitutes a good plan?” He said it starts with an emergency fund of a few months of income in a bank account. Next, you diversify with low-cost U.S. and international index funds as your core holdings. If you are healthy, it is usually best to defer taking Social Security for as long as possible. And finally determine an appropriate balance between stocks and bonds, based on your needs and risk tolerance.

If I am talking politics, you should leave the room. I would suggest doing the same thing if you are in a room with the TV tuned to financial news. You want information that is important and not information that feels important. As Manson warns, “Paradoxically, in its effort to inform… news media positions itself to misinform…” So, when making investment decisions - think about the plan, not about the news.

“Regrets, I’ve had a few. But then again, too few to mention…” might be the lyrics of a good Frank Sinatra song but it is bad “psychology, neuroscience, and when you get down to it, history,” writes David McRaney in his review of The Power of Regrets.” The author, Daniel H. Pink, says a “no regrets” mindset is “…not a blueprint for a life well lived. [It is] …forgive the terminology – bullshit.”

Regret is a negative emotion, but it is not unhealthy or abnormal. Pink explains “It is …universal, an integral part of being human. …It clarifies. It instructs. Done right, it needn’t drag us down; it can lift us up.” It balances positive emotions and helps stimulate learning and growth. It helps us survive. Like everything in life, in excess it is a problem. But too little is also an issue.

Pink sorts regrets into four categories and “Connection Regrets” are by far the most common. We “…have a massive amount of regret about fractured or unrealized relationships,” explains Paula Davis in Psychology Today. And those regrets are either “open door” or “closed door,” depending on the possibility to change them.

In my case, it was my wife dying of cancer that simultaneously opened my eyes to my negligence as a husband and slowly closed the door to my chances to do any more about it. Most of our marriage, I treated her how I would want to be treated instead of how she needed to be treated. On our premarital counseling personality test, she scored 100% on “feelings” and I got 0%. I was a bull, and she was a China shop. It was a match made in heaven, but the journey took some detours down roads paved with my good intentions. I tried to be sensitive, and she tried to be understanding, but we still ended up with a lot of broken glass. The good thing was that we always cleaned up the mess together.

Barbara and I finished well because she was good, and I got better at learning from my regrets. As Pink explains, “All regrets aggravate,” but they can be productive instead of destructive if they motivate you to positive actions. So, instead of ignoring or despairing you can use the negative feelings as instructions
for “…making better decisions, …improving your performance, …deepening your sense of meaning.”

The regret-fueled changes that I made helped Barbara and I cram a lifetime into 7 months. That’s because when facing death, you live in the moment and time stands still. However, when facing retirement, time marches on closing the door for compounding to grow wealth. This fact is often lost on the young because the perception of time is not constant. It speeds up with age, which is why a survey from Magnify Money “…found that the biggest [financial] regret among Americans is not investing sooner.”

If you have similar regrets, you are not alone. The survey finds that “Investing regrets are the norm… [and most people] …believe investing regrets are inevitable.” However, repeating the mistakes that led to regrets is not inevitable. You may be behind, but Pink reminds us that saving for retirement “…is like the
old proverb. The best time to plant a tree was 20 years ago, and the second-best time is today.”

Frank Sinatra’s daughter revealed that he grew to hate My Way. Contrary to what he sang, he had more than a few regrets. The ones he mentioned most were about ignoring his family. I regret that I wasn’t a better husband. But Pink tells us the purpose of regrets is to make us feel worse today “…to help us do better tomorrow.” I became a better husband and am now a better father and grandfather. Regrets have also made me a better advisor and can make you better at managing your finances. We can’t change the past. But we don’t have to repeat it. There might have been a better time to do something, but until the door closes, we always have the second-best time – today.

It is normal for me to start out a round of golf with bogies or double bogies on the first three or four holes. “This is a story I have heard so often,” muses teaching  pro Karl Moris, “that we could label this Poor Start Syndrome.” I label it something else, but since I only swear on the golf course, I won’t mention it here.  Whatever the name, I always attributed the slow starts to stiffness, but recently have come to realize that it has more to do with fear than flexibility.  

On the first tee I found myself worrying about all the things that could go wrong. “And for most of us [such thinking], creates an even bigger challenge in a game  that is already very difficult,” says mental golf coach David MacKenzie. Talking with my 11-year-old granddaughter, Sally, I discovered that she faces similar  issues riding horses. She said that horses can sense your mood and if you are fearful when approaching a jump, they will not go over it. To succeed she said, “You  have to push through the fear and be totally committed to the jump.” 

Just as Sally’s horse senses her emotions, my body senses my fear, releasing adrenaline, which tenses my muscles and over activates my brain. When that  happens, my body does what a horse does and won’t do what it is supposed to do. Sports psychologist, Jon Stabler warns that “…when extreme fear is happening, we may lose touch with ourselves… It may feel like... our bodies are doing whatever they want [and] we have no direct control.” To control the fear,  he explains that “your thoughts create the fear. Control your thoughts and you can stop the fear and resulting reactions and poor performance.” To accomplish  this, Ellen Rudolph, an expert on the mental side of golf, says you must “…believe in your strategy [and] stay committed to the shot you’ve planned…” 

Stepping onto the first tee or approaching a jump triggers reflexive fear. However, Jason Zweig in Your Money and Your Brain emphasizes that “Humans are reflexively afraid not just of physical dangers, but also of any social signal that transmits an alarm.” Stock market volatility and the resulting hysteria in the  financial media will definitely trigger such responses. And “…when a potential threat is financial instead of physical,” he warns, “reflexive fear will put you in  danger more often than it will get you out of it.” 

It will get you in trouble because the odds are against you. That’s why after reviewing the statistics, Ben Carlson stated in a 2020 Fortune article, “Selling out and  waiting for the dust to settle is… a horrible plan.” The statistics are not even close. According to Investopedia, “Nobel Laureate William Sharpe… concluded that  an investor employing a market timing strategy must be correct 74% of the time to beat the [buy-and-hold] benchmark portfolio.” 

However, even though the odds are against cutting your losses and running, I can’t help thinking of the lyrics to an Elvis song, “It feels so right… How can it be  wrong?” Its feels right even though it’s wrong, says neuroscientist Daniel Kahneman, because in the unpredictable world of investing, human judgment is unreliable. His solution to the problem is “…to replace human judgment with formal rules that use the data… to produce.... a decision.” And that data suggests  that prudent diversification and the discipline to stay the course is a better decision. In hindsight it may not turn out to be the best decision. But in an uncertain  world there is usually no other prudent choice.  

Fear creates an even bigger challenge for investors in an endeavor that is already very difficult. To rise to the challenge, you need to slow down your overactive  adrenaline-fueled thinking. You do that by knowing the statistics, believing in a rules-based strategy, and staying committed to it. As Sammy Davis, Jr. said about  dealing with fear, “You always have two choices: your commitment versus your fear.”