Seeking Wisdom

by Peter Bevelin

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  "/ never forget a face. "

  Australian psychologist Donald Thomson appeared on a live TV debate about the unreliability of eyewitness testimony. He was later picked up by the police, placed in a lineup, and identified by a victim as the man who had raped her. But Thomson has an airtight alibi. The rape had occurred while he was on TY. It later turned out that the rapist had attacked the woman as she was watching the very show on which Thomson had appeared.

  Studies show that we remember a face but wrongly remember the time and place we saw it. Leading and suggestive questions can cause misidentification, and influence by information obtained after the event. Studies show that it is easy get a witness to believe they saw something when they didn't. Merely let some time pass between their observation and the questioning. Then give them false or emotional information about the event. Psychology Professor Elisabeth Loftus' work has shown that people can be led to remember rather familiar and common experiences, even when they had not happened. For example, her studies show that people can believe that a childhood experience had happened when it never happened.

  Studies show that jurors believe witnesses even when they are later shown to have made an incorrect identification. Eyewitnesses can be highly inaccurate but appear confident. The more confident people are when they appear as witnesses, the more believable the jurors will find them. The more detailed their memory of a situation is, the more the jurors trust them. Testimonial evidence is vivid and therefore more believable.

  Is a child witness always to be trusted in a courtroom?

  Can a psychologist who interviews a troubled child falsely implant the idea that a bad event happened to them?

  Childhood memories are unreliable and influenced by fantasies and suggestions. Experiments have shown how normal children behave in response to suggestions. Implanted false stories can have a huge impact. Children can actually believe an event that never happened or produce false narratives for the event. Over time, their stories may become elaborate and filled with vivid details, making them more believable.

  Keep in mind

  Keep records of important events.

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  Do-SOMETHING SYNDROME

  I have often said that the sole cause of man's unhappiness is that he does not know how to sit quietly in his room.

  Blaise Pascal

  When John asked why the company continued making acquisitions when so many of them turned sour, the CEO replied: "All my colleagues do deals like this. Plus how can I keep my job and all my perks if I don't keep busy?"

  Blaise Pascal said: "Man finds nothing so intolerable as to be in a state of complete rest, without passions, without occupation, without diversion, without effort." We sometimes act because we can't sit still. We feel bored, impatient, threatened or pressured or we simply desire excitement and stimulation. We act without a sensible reason. It seems easier to explain doing something than actively doing nothing.

  Warren Buffett tells why CEOs like acquisitions:

  The sad fact is that most major acquisitions display an egregious imbalance: They are a bonanza for the shareholders of the acquiree; they increase the income and status of the acquirer's management; and they are a honey pot for the investment bankers and other professionals on both sides... often the CEO asks a strategic planning staff, consultants or investment bankers whether an acquisition or two might make sense. That's like asking your interior decorator whether you need a $50,000 rug.

  The acquisition problem is often compounded by a biological bias: Many CEO's attain their positions in part because they possess an abundance of animal spirits and ego. If an executive is heavily endowed with these qualities - which, it should be acknowledged, sometimes have their advantages - they won't disappear when he reaches the top. When such a CEO is encouraged by his advisors to make deals, he responds much as would a teenage boy who is encouraged by his father to have a normal sex life. It's not a push he needs.

  Warren Buffett also provides an example from the insurance world on why it is more important to do what is right than to simply do something:

  We hear a great many insurance managers talk about being willing to reduce volume in order to underwrite profitably, but we find that very few actually do so. Phil Liesche [manager National Indemnity Company's insurance operation] is an exception: if business makes sense, he writes it; if it doesn't, he rejects it. It is our policy not to lay off people because of the large fluctuations in work load produced by such voluntary volume changes. We would rather have some slack in the organization from time to

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  time than keep everyone terribly busy writing business on which we are going to lose money.‌

  Continuous reorganization may be dangerous. The Roman satirist Petronius Arbiter said in the 1st Century: "We trained hard, but it seemed that every time we were beginning to form into teams we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing, and what a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization."

  Keep in mind

  The 19th Century American writer Henry David Thoreau said: "It is not enough to be busy; so are the ants. The question is: What are we busy about?" Don't confuse activity with results. There is no reason to do a good job with something you shouldn't do in the first place.

  Charles Munger says, "We've got great flexibility and a certain discipline in terms of not doing some foolish thing just to be active - discipline in avoiding just doing any damn thing just because you can't stand inactivity."

  What do you want to accomplish? As Warren Buffett says, "There's no use running if you're on the wrong road."

  SAY-SOMETHING SYNDROME

  Wise men talk because they have something to say; fools, because they have to say something.

  Plato

  '1 am a big shot; people expect me to comment on all kind of things."

  People tend to speak even if they have nothing to contribute. Mark Twain wrote:

  "If you have nothing to say, say nothing."

  Why do we always need to give an answer? Isn't it better to say, "I don't know?" Greek philosopher Socrates said that awareness of ignorance is the beginning of wisdom.

  Keep in mind

  Wisdom is a two-headed beast. Roman dramatist Publilius Syrus wrote in 1st Century BC: "I have often regretted my speech, never my silence."

  Benjamin Franklin said: "He that would live in peace and at ease, must not speak all he knows, nor judge all he sees."

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  25. EMOTIONS

  The heart has its reasons of which reason itself knows nothing.

  - Blaise Pascal

  '1 got married in the heat of passion. Sorry dad,"John's daughter said

  Francis Bacon said: "The guilt of Senses is of two sorts, either it destitutes us, or else deceives us." Emotions come before reason. Often when we make a decision our feelings take over. We hear bad news first. Under the influence of intense emotions we sometimes make hasty judgments and choices we would normally never do. For example, we buy things we can't afford, we have unprotected sex, we overeat, and use drugs. Studies also show that when we are in a state of more rational calm, we underestimate how we will feel and act when we experience intense emotions.

  '1 had a really bad day today,"said Mary, "So Tm going shopping now. "

  One study tried to find out how disgust and sadness influenced economic decisions. All participants in the study watched a movie immediately before conducting financial transactions. Some watched a sad movie. Others a disgusting movie and a third group an emotionally neutral movie. Participants insisted that their feelings didn't affect what they were willing to pay for something or what price they were willing to accept. The study showed otherwise. Disgust reduced their selling and buying prices. Sadness cut their selling prices but raised their buying prices.

  We saw under loss aversion and deprival that we put a higher value o
n things we already own than on the same things if we don't own them. Sadness reverses this effect, making us willing to accept less money to sell something that we would pay for the same thing.

  This means, that when we feel sad, which often reflects helplessness and loss, we may want to change our circumstances so we feel better. This may cause us to overpay for something or buy things we don't need. That is why Mary went on a shopping spree. She needed some retail therapy. When we feel disgust we may be reluctant to buy anything new unless we find it is a real bargain. When we feel sadness or disgust we may want to get rid of things we have and sell them for less than what they are worth.

  '1t doesn't matter how large the problem is. It doesn't feel good "

  Risk is a feeling. We automatically judge how good or bad a stimulus is based on how we feel about it. When something produces strong emotions, we overweigh

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  its consequences and underweigh its chance of happening. We associate gains with great feelings. For example, studies show that our feelings toward winning the lottery are the same whether the chance of winning is one in 10 million or one in 10,000.

  John is buying a new sports car. He is all excited. But how will he feel one year from now?

  We expect that if good or bad things happen to us in the future, they will make us feel better or worse much longer and more intensively than they actually turn out to be. So John's new car will probably be less exciting than John expects. Neither will it excite John as long as he expected. Why? Because we tend to adapt to most good and bad things and circumstances and make them ordinary (adaptation is not inevitable - individual differences and conditions matter and some major life events produce long lasting or enduring changes in life satisfaction). Our feelings are also influenced by so many other things and people than the specific future event itself. Furthermore, the comparisons we make when we think about our future feelings are often not the comparisons we make when we experience the event.

  What about if we instead use our past good experiences to decide what we want? Can we trust our memories to guide us? Memories can be deceptive. We also underestimate how our tastes and preferences will change. The Roman poet Titus Lucretius Cams said: "As long as we do not have it, the object of our desire seems greater than anything else; as soon as we enjoy it, we long for something different with an equal craving."

  What could we do instead? When we make big decisions, we could compare our expected feelings with those of people who have similar experiences today. In that sense, we are not as unique as we think we are.

  Keep in mind

  • Understand your emotions and their influence on your behavior. Ask: Is there a rational reason behind my action?

  • Remember the proverb: ''A wise man controls his temper. He knows that anger causes mistakes."

  • When we have just gone through an emotional experience, we should hold off on important decisions.

  • The benefits of cooling-off periods force us to think things through.

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  26.STRESS

  You can't change the cards life has dealt you, but you can determine the way you'll play them.

  - Ty Boyd (American motivational speaker)

  Too much information, lack of predictability or control, too many choices, lack of sleep, social isolation, job status, crisis, catastrophes, fear, etc. cause stress. The less control we perceive we have over our lives, the easier we fall victim to stress. The more stress we experience, the more we tend to make decisions that are short term.

  Everything our brain interprets as a threat influences our biology. Our ancestors didn't suffer less stress than we did. But their stress was different. They met dangers that demanded fast physical reactions. Our stress is more social and psychological in nature.

  The fear of losing both her job and social position caused Mary to suffer constant headaches.

  Stress affects concentration and memory. Long-term stress exposure upsets the brain's chemical balance. Stress may cause high blood pressure, heart disease, diabetes, back and stomach problems, headache, and depression. Studies show that when we feel stress the concentration of cortisol rises in the bloodstream. One effect of cortisol is to suppress the workings of our immune system. This makes us more vulnerable to diseases. Stress also counteracts the production of insulin (the hormone that processes blood sugar), causing the process of repair to slow down. Studies show that emotional stress creates longer recovery times in our bodies and may be more harmful to our health than non-emotional stress events like physical exercise.

  What happens when people are exposed to physical and mental exhaustion, confasion, physical pain, emotional tension or fear?

  Stress increases our suggestibility. Ivan Pavlov showed that animal behavior could be established or erased by exposing the animal to stress. For example, he could make a dog react aggressively to a caretaker with whom the dog was once very loyal. The same can happen to people. All people have a certain level of tolerance to stress. Once it is passed, people begin to break down and what they earlier believed and liked are easily changed. This can happen to prisoners of war. It has also been used to make religious and political conversions, and by police forces to elicit confessions.

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  '1 have lost control over the situation. "

  The more we believe we are in control, the less vulnerable we are to the negative effects of stress. Studies show that people who perceive themselves to be in control over a stressful situation experience less stress on their hearts and circulatory system.

  The status of our job matters. The Whitehall II study involving 17,000 civil servants showed that people with low perceived control over the work environment or people low in the organizational structure have an increased risk of cardiovascular disease. Our cortisol levels rise in response to the degree other people order us about. As we climb the social hierarchy health status improves. In Genome, science writer Dr. Matt Ridley comments on the Whitehall study: "Somebody in a low-grade job, such as a janitor, was nearly four times as likely to have a heart attack as a permanent secretary at the top of the heap."

  In another study researchers tried to find out the differences between business executives who became sick from exposure to high stress and those who didn't. They found that executives who stayed healthy had a sense of commitment to work and families, felt in control, and had a positive attitude toward challenges. They saw challenges as part oflife and an opportunity for growth rather than as a threat.

  Warren Buffett says, "I have no stress whatsoever - zero. I get to do what I love to do every day. I'm surrounded by people that are terrific." He continues, ''All the businesses I run don't take 5% of my time. We don't have regular staff meetings and the like. If you've got good businesses and the right managers, you don't need that sort of thing- and if you don't, they don't help."

  Keep in mind

  • Stress is neither good nor bad in itself. It depends on the situation and our interpretation. Stress can be controlled by our attitudes. The Austrian physician Dr. Hans Selye says in Stress without Distress that it is not stress that harms us but distress. We need challenges. He continues, "Without stress, there would no life... Complete freedom from stress is death."

  • The 1st Century philosopher Epictetus said: "Happiness and freedom begin with a clear understanding of one principle: Some things are within our control, and some things are not. It is only after you have faced up to this fundamental rule and learned to distinguish between what you can and can't control that inner tranquility and outer effectiveness become possible."

  If a problem can be solved, there is no need to worry. The thing to do is to correct it. If a situation can't be solved, we shouldn't worry about that either. We can't do anything about it. Mark Twain says: "I've suffered a great many

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  catastrophes in my life. Most of them never happened." Sometimes keeping ourselves busy with something else may cause us to stop worrying.‌

  PAIN, CHEMICA
LS AND DISEASES

  Pain upsets and destroys the nature of the person who feels it.

  -Aristotle

  '1can't think clearly because I am drunk. I don't care about the consequences if I act violent."

  We become confused when we are in pain, under the influence of chemicals or have a physical or mental illness. Physical and mental pain may cause fear, anger and stress. Chemical changes magnify the pain and can cause depression.

  Drugs, stimulants (like nicotine, alcohol or coffee), and depressants distort our senses.

  MULTIPLE TENDENCIES

  When you get two or three of these psychological principles operating together, then you really get irrationality on a tremendous scale.

  - Charles Munger

  Charles Munger gives an illuminating example on the issue of stealing: