Why we should always stick to the choices we make.
It’s all about consistency. Even in situations with odds no better than even. If you don’t do the same thing over and over again, you risk losing more than half the time. This is probably the biggest mistake a lot of investors make, sometimes calling it black and otherwise red, means the statistics just don’t work in our favour. Therein endeth the lesson, as Sean Connery would say in a heavy Scottish accent, in the highly overrated Untouchables (1987).
Think of it this way. Our bodies are marvellous things but depending on what we do with them and what we eat, makes a big difference in life expectancy. If you feed your body good things on a regular basis, it can better manage our deployment of energy and resources. In layman’s terms, this means we eat vegetables, enough protein, not too many sugary things and everything is great. However, if you start mixing up the intake, it’s like drinking alcohol for breakfast.
The amazing thing is, that even if we do bad things on a consistent basis, it becomes part of our routine. We get used to things and function as proficiently as possible given the circumstances. Rather surprisingly, take away some of the things we have come to expect and it can cause serious upheaval in the short term. There is a reason they call it withdrawal for those of us who suffer from affliction, but that is a totally different discussion.
The mind is something else. Here we think that we think we can think, and it can make everything very complicated. Apart from a systematic weighing of the available options, we have instincts, we have feelings and apparently, we can learn from past behaviour. That’s a lot to sort out, some of it entirely irrelevant and most otherwise completely different given circumstance. Not surprisingly, decision making is one of our least favourite things to do. We prefer to be led by our superiors who do these things for us, but that again, is a totally different discussion.
Where does this all leave us? Simple. If you are going to invest, always set yourself the same stop loss no matter what you do. If you want to live a long life, get into a good habit, and stick to it no matter the temptation. Other than that, always bet on red, Tottenham will never win the League, nobody cares about the next World Cup, and there is no way Erling Haaland and Kevin de Bruyne should be allowed to play on the same team.