Still a man hears what he wants to hear
And disregards the rest
— The Boxer, by Paul Simon
John Mauldin, who writes a free newsletter about investing, included the following in a recent letter.
I [recently] read a pre-publication manuscript of a book by my good friend James Montier, called The Little Book of Behavioral Investing. I was asked to write the preface. I have to say that this book will become one of those that I read at least once a year, as it just so pointedly reminds me of all the ways we make investment (and life!) mistakes because of the ways our brains are hard-wired.
One of the real problems is that we “hear what we want to hear.” Our beliefs or personal interests lead us to conclusions or actions that may or may not be helpful. Let’s take a page excerpt from James’ book:
Prisoners of Our Preconceptions
“For instance, a group of people were asked to read randomly selected studies on the deterrent efficacy of the death sentence (and criticisms of those studies). Subjects were also asked to rate the studies in terms of the impact they had had on their views on capital punishment and deterrence. Half of the people were pro-death penalty and half were anti-death penalty.
“Those who started with a pro-death sentence stance thought the studies that supported capital punishment were well argued, sound and important. They also thought that the studies that argued against the death penalty were all deeply flawed. Those who held the opposite point of view at the outset reached exactly the opposite conclusion.
“As the psychologists concluded: �Asked for their final attitudes relative to the experiment’s start, proponents reported they were more in favor of capital punishment, whereas opponents reported that they were less in favor of capital punishment.’ In effect each participant’s views polarized, becoming much more extreme than before the experiment.
“In another study of biased assimilation (accepting all evidence as supporting your case) participants were told a soldier at Abu Ghraib prison was charged with torturing prisoners. He wanted the right to subpoena senior administration officials. He claimed he’d been informed that the administration had suspended the Geneva Convention.
“The psychologists gave different people different amounts of evidence supporting the soldier’s claims. For some, the evidence was minimal; for others, it was overwhelming. Unfortunately the amount of evidence was essentially irrelevant in assessing people’s behavior. For 84% of the time, it was possible to predict whether people believed the evidence was sufficient to subpoena Donald Rumsfeld based on just three things:
1. The extent to which they liked Republicans
2. The extent to which they liked the US military
3. The extent to which they liked human rights groups like Amnesty International.
“Adding the evidence into the equation allowed the researchers to increase the prediction accuracy from 84% to 85%. Time and time again, psychologists have found that confidence and biased assimilation perform a strange tango. It appears the more sure people were that they have the correct view, the more they distorted new evidence to suit their existing preference, which in turns made them even more confident!”
“We’ll pluck significance from the least consequential happenstance if it suits us and happily ignore the most flagrantly obvious symmetry between separate aspects of our lives if it threatens some cherished prejudice or cozily comforting belief; we are blindest to precisely whatever might be most illuminating,” wrote Ian Banks, of the protagonist in the science fiction novel Transition I am currently reading.
His perspective, of course, was on how our own biases affect our own investment decisions. I want to put a different spin on it.
As atheists have stopped by to tall me how wrong I am to believe in God, I have repeatedly tried to make the point that the reason they don’t believe God is that they don’t believe in God. In other words, there are no proofs that will ever be sufficient to them, because they already have their minds made up, and all new evidence is filtered through a circular logic system that allows them to see evidence that supports their viewpoint, and disregard the evidence that is counter to it.
Now, some of them are already planning a response that will say in effect, that those who believe IN God, do the same thing, just in reverse. Don’t bother. We do.
My point is that both positions can be defended to the death with logic and evidence, and that neither side will ever be convinced by the evidence. We hear what we want to hear, and disregard the rest.
Is there no getting past this myopia? I believe there is, but that it is not easy.
You’ll need to do some research. I recently heard Dr. Hugh Ross speak. He said that he was drawn into an investigation of all of the world’s great religions while he was still a teenager. He read the Hindu Vedas, The Koran and other “Holy Books”, with the idea of testing whether they comported with observable reality. He found that none of them came anywhere close, until he read the Christian Bible. He later went on the become an astrophysicist, but continued to study the bible, and came to rely on it as truly the revealed Word of God. Today he continues to discover new Reasons to Believe in his work as a scientist. He started with an intellectual curiosity, and what he found in Christianity continues to this day to stimulate that curiosity, not because answers are completely elusive, but because there are compelling evidences that God has done exceedingly abundantly more than we could ever ask or hope. But the first thing that is required is an open mind.
Before you begin, I suggest saying a little prayer. It doesn’t have to be much. You don’t even have to be convinced that God is real, just open to the possibility. It can even be a bit self-centered. Like one guy, known today as an excellent teacher and pastor of a large church, prayed something like this. ‘OK, God, if you’re real, I need to see some change. I will commit my life to you, but only for the next month. By then if I don’t see compelling proof that you are fixing me, then I’m going back to drugs.’ (That’s from memory, so not an exact quote.) But within a week, he removed all conditions and committed himself to God completely. He did it because he was absolutely convinced that God was real. So he went from being a drug addict and dealer and hippie, to a life of promise and fulfillment and joy. You can listen to his story by clicking here. It is worth an hour of your time. Trust me. For once in your life, consider the possibility that your view of reality may not be complete.