The Bubbles We Live In
To be honest, like most people, I’ve lived in a bubble. When working on Wall Street, I became pragmatic about this and I knew what I lacked and used it to my advantage. With limited knowledge of the things I traded, I accessed outside sources of information for help. I did things other traders would not do and, precisely because I acknowledged my limitations, I was successful.
The fact is we all live in our own little bubbles and subcultures. In my lifetime I have lived in lots of bubbles: high school, college, the Marines, Merrill Lynch. Right now the bubble I live in is in Lakeway, Texas and, for the most part, the only thing I can opine on with certainty is this little subculture in which my family and I now live.
I think instinctively we all know that we live in bubbles because, from time to time, those bubble get pierced and when they do it causes us to reexamine our lives.
For example, when I worked on Wall Street, I used to sell bonds from GM. I did so because I knew they paid well and were a rock solid creditor. I would read the analysts reports and felt confident that the reports were truthful. In addition I would always verify the analyst’s claims by looking at the rating agencies reports which were always consistent. That is until one day I purchased a report by an outside analyst claiming just the opposite- that GM was going bankrupt and that all of the analysts on Wall Street knew it. When I looked at the report and the clarity of his writing, I knew he was right. From that day forward I never sold one more GM bond. The big mistake I made was believing the reports from Merrill Lynch. I should have known that the greed governing the business of GM was the same at Merrill as was at every other Wall Street firm
Just a few years later, G.M. did go bankrupt devastating millions of bond holders. The outside analyst’s prediction was correct. Once I allowed myself to see the truth about G.M., I changed my behavior.
The fact is that we are all biased and jaded and have a certain world views that governs our actions. What makes it worse is that the media distorts everything. They will lie with impunity if they know they can drive traffic and revenue to their platforms. The business of the media is getting eyeballs on their screen, tablet or website. Nothing else.
In Ryan Holliday’s book “Trust me I’m Lying”, Holliday explores how the media works in today’s age. How the media twists words and hypes titles just to make us engage with their sites. His conclusion; be very careful of what you read because it probably is not true.
We are even manipulated by the information we get from our government reports. In the 1980’s, Ronald Reagan poured billions into the armed services relying on the CIA’s statistics about the strength of the Soviet economy. In the end the reports were proved to be worthless. The Soviet Union collapsed and the U.S wasted billions of dollars on an enemy that turned out to be a paper tiger.
Just this week, take a look at the Kavanaugh confirmation hearing. You either believe the accusations or don’t depending on what political side of the aisle you are on….or bubble that you are in. These are our biases at play and most people can’t even see it. Most people’s identity and belief system is fixed on their political party.
We can’t even find the truth anymore.
Even when talking with another person, are you sure you really understand them? We all have filters from our own psychology and upbringing. Beyond that smiling face, underneath that social veneer, what’s the real story that drives an individual?
I still use my grounding in finance to look at the world at large. Real estate has always given me some perspective of what is happening in the world at large. I tend to look at how many houses or buildings are being constructed and where the value is in real estate to gauge the economy. I also used to pay attention to the malls; but, it seems nobody goes to shopping centers anymore. So even those data points are lost and I struggle to see what is happening.
The point is I don’t kid myself, I know mostly everything I see is just smoke and mirrors.
I think the brilliant physicist Richard Feynman had it right when he said, “I think it’s much more interesting to live not knowing than to have answers which might be wrong. I have approximate answers and possible beliefs and different degrees of uncertainty about different things, but I am not absolutely sure of anything and there are many things I don’t know anything about. ”
Amen.
Steve
Originally published at abovethefraypodcast.com on September 30, 2018.
