Originally Posted by
Keyser Soze
I find the psychology of board mood quite fascinating, and I am not being facetious when I say this. But board psychology mirrors human psychology in general. You can draw parallells from all walks of life as a reference point for comparison,
In the financial trading world, we have what are called Pollyannas and Cassandras. Or Perma-Bulls and Perma-Bears. In that order, it means permanently optimisitc or permanently pessimistic. The best traders are those with mental flexibility to smell the change of the wind, and switch their positions to take advantage of it. The pessimists don’t take enough risk and live in fear. Fear of letting go. Fear of being wrong. Often referenced by childhood, poor work experience, self-doubt, imposter syndrome or sometimes just a mental block due to stress. The over-optimists have a good run for a while then blow out as they believe good times last forever. This is all about people’s decision-making systems in general. It applies to people’s work, life decisions, investments and even forecasts for their football team. You see the same here.
Often civil servants make the worst traders or forecasters. Because their training and work experience tells them to avoid risk, tick every box, all historic quantitative data must be perfect, their arse must be covered so they don’t put their neck out with a big call, afraid to go against consensus, everything must be lined up, and checks and balances all perfect. They cannot deal with uncertainty, or take risk based decisions, or risk-reward decisions which have gaps and require thoughts around probability rather than perfection. All the quantitative data (high volume data sets such as seasonal, but backward looking) must be lined up to confirm the decision, but qualitative / Bayesian (low volume of data points, but often more recent and more reliable leading indicators) will be dismissed as “not enough evidence”. Lawyers suffer from the same problem.
It is no surprise that when people retire and go on trading / invesmtent courses to learn to trade or
invest their own money, it is ex-civil servants, ex-lawyers and mathematicians (that will surprise people!) that are the worst performers. They neef everything to be perfect and obvious before they can make the call, or take a big decision. Former business people, engineers, or people who have worked in various sectors often perform the best and make the transition to trading.
Here on this board, you can see the same behaviours and same methods, from similar characters. It is former or existing civil servants that remain in their trenches. There is a lack of mental flexibility. So negative, they dig a trench in case their main trench fails as a defensive retreat! That is Ok. This is their natural character so they shouldn’t be mocked, but it should be observed. Like perma-bear or perma-bull traders, until they are willing to open up, seek therapy or psychological coaching it is too entrenched to change. It is a fixed mindset.
It is not a criticism of them as they are wired a set way and a product of their upbringing or work environments, where their behaviours are re-inforced by their peers or work culture. But they will only believe we can make top six once we are in the top six. “Ooh look, the data tells me that we could finish in the top six” isn’t very usefup nor revealing if you are already there. The real skill was predicting it before you got there, not confirming what has already happened, and being expected to be celebrated like Mystic Meg.
These days I coach graduates on decision-making systems and it is satisfying to see them get there, as it helps them make better decisions in life. But the messageboard is beautiful in the sense that it mirrors people’s decision making systems in everyday life. It’s a fascinating thing to observe.
