fragility.........................

 

. . . the dissociative or abstract quality of children's television in general these days—makes it an ideal vehicle for psychological adjustment; for constructing and managing the kind of selves that society requires, without meddling interference from the nature of things. . . . when dumb nature is understood to be threatening to our freedom as rational beings, it becomes attractive to construct a virtual reality that will be less so, . . .With this comes fragility—that of a self that can't tolerate conflict and frustration.  And this fragility, in turn, makes us more pliable to whoever can present the most enthralling representations that save us from direct contact with the world.

-Matthew B. Crawford,  The World Beyond Your Head: On Becoming An Individual In An Age Of Distraction

Talking about money............

 So the goal here is to have a healthy relationship with money. You don’t want the porridge to be too hot or too cold, but just right. How do you know when you have a healthy relationship with money? When you no longer stress about money. People who spend too much experience stress—they’re always worried about how to make the next credit card payment. People who spend too little experience stress—they’re agonizing over every penny. The goal is not only not to experience stress about money, but to not even think about it at all. I have an assignment for you: try to go a week without even thinking about money. I bet you can’t do it. It’s a lot harder than you think. Everywhere we go we are bombarded by financial decisions. Shit, the price of gas is high these days. Shit, Chipotle is $20 nowadays. Shit, my HOA dues went up this month. Do any of these things cause you stress? If so, that provides an insight into your psychology.

-Jared Dillian, from this post

Highly recommended...................

 Save.  Just save.  You don't need a specific reason to save.  It's great to save for a car, or a down payment, or a medical emergency.  But saving for things that are impossible to predict or define is one of the best reasons to save.  Everyone's life is a continuous chain of surprises.  Savings that aren't earmarked for anything in particular is a hedge against life's inevitable ability to surprise the hell out of you at the worst possible moment.

Be nicer and less flashy.  No one is impressed with your possessions as much as you are.  You might think that you want a fancy car or a nice watch.  But what you probably want is respect and admiration.  And you're more likely to gain those things through kindness and humility than horsepower and chrome.

Define the game you're playing, and make sure your actions are not being influenced by people playing a different game.

Respect the mess.  Smart, informed, and reasonable people can disagree in finance, because people have vastly different goals and desires.  There is no single right answer, just the answer that works for you.

Cycling...................

 The way I see it there are really only two constants in the markets: risk and cycles.

Risk has to exist because without it there would be no reward.

And nothing is more dependable than cycles because market psychology, fundamentals, risk appetite and investor emotions are constantly changing. Strategies, asset classes and securities go in and out of style in part because the pendulum always swings back and forth between fear and greed but also because the future is unknowable.

-Ben Carlson, from here

Perspective matters.....................

      If you view "do what you love" as a guide to a happier life, it sounds like empty fortune cookie advice.  If you view it as the thing providing the endurance necessary to put the quantifiable odds of success in your favor, you realize it should be the most important part of any financial strategy.

-Morgan Housel, as culled from The Psychology of Money

Compounding....................

More than 2,000 books are dedicated to how Warren Buffett built his fortune.  Many of them are wonderful.  But few pay enough attention to the simplest fact: Buffett's fortune isn't due to just being a good investor, but being a good investor since he was literally a child.

     As I write this Warren Buffett's net worth is $84.5 billion.  Of that, $84.2 billion was accumulated after his 50th birthday.  $81.5 billion came after he qualified for Social Security, in his mid-60s.

     Warren Buffett is a phenomenal investor.  But you miss a key point if you attach all his success to investing acumen.   The real key to his success is that he's been a phenomenal investor for three quarters of a century.

-Morgan Housel, from his book, The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness 

True this...............................

 If there is one thing we learned from social science over the last century is that we may produce unintended consequences, even the opposite effect of what we desire, if we react simplistically to situations and don’t consider human psychology.

-Steven Novella, as cut-and-pasted from here

One trait Reagan and Trump..................

.................................shared:  they understood the power of positive psychology and unleashed it.

 If you thought that the economic news was crazy during the first half of 2022, just wait until we get to the second half.  So many of the problems that we are experiencing now are going to continue to intensify, and Americans are becoming more pessimistic about economic conditions with each passing day.  In fact, as you will see below, a whopping 85 percent of us believe that it is “very likely” or “somewhat likely” that the economy will go through a recession at some point during the next year.  Of course the truth is that if all we have to suffer through is a “recession”, we would be extremely fortunate.  Our leaders have lost control of the economy, and many of us are extremely concerned about what is coming next. 

-from this Zero Hedge post

Remember: Just because you're paranoid.....

.............doesn't mean they're not out to get you.

Bacon brilliantly prefigured, by more than three centuries, modern behavioral psychology's notion that humans have a proclivity to "suppose the existence of more order and regularity in the world than it finds."  Man is little more than a pattern-seeking primate, with an unerring ability to see connections and suspect conspiracies where none exist.

-William J. Berstein, The Birth of Plenty:  How the Prosperity of the Modern World Was Created

Perspectives...........................

       Psychologists have a name for our tendency to confuse our own perspective with something more universal:  it's called 'naive realism', the sense that we are seeing reality as it truly is, without filters or errors.  Naive realism can lead us badly astray when we confuse our personal perspective on the world with some universal truth.  We are surprised when an election goes against us: everyone in our social circle agreed with us, so why did the nation vote otherwise?  Opinion polls don't always get it right, but I can assure you they have a better track record of predicting elections than simply talking to your friends.

-Tim Harford, How to Make the World Add Up:  Ten Rules for Thinking Differently About Numbers

The need to be "maladjusted".....................

       Modern psychology has a word that is probably used more than any other word.  It is the word "maladjusted."  Now we all should seek to live a well adjusted life in order to avoid neurotic and schizophrenic personalities.  But there are some things within our social order to which I am proud to be maladjusted and to which I call you to be maladjusted.   I never intend to adjust myself to segregation and discrimination.  I never intend to adjust myself to mob rule.  I never intend to adjust myself to the tragic effects of the methods of physical violence and to tragic militarism.  I call upon you to be maladjusted to such things.  I call upon you to be as maladjusted as Amos who in the midst of the injustices of his day cried out in words that echo across the generation, "Let judgment run down like waters and righteousness like a mighty stream."  As maladjusted as Abraham Lincoln who had the vision to see that this nation could not exist half slave and half free.  As maladjusted as Jefferson, who in the midst of an age amazingly adjusted to slavery could cry out, "All men are created equal and are endowed by their Creator with certain inalienable rights and among these are life, liberty, and the pursuit of happiness."  As maladjusted as Jesus of Nazareth who dreamed a dream of the fatherhood of God and the brotherhood of man.  God grant that we will be so maladjusted that we will be able to go out and change our world and our civilization.  And then we will be able to move from the bleak and desolate midnight of man's inhumanity to man to the bright and glittering daybreak of freedom and justice.

-Martin Luther King, Jr., as he concluded a June 7, 1957 speech.  From A Testament Of Hope

A few morsels.................................

"The idea is that you have to take risk to get ahead, but no risk that can wipe you out is ever worth taking."

"You can plan for every risk except the things that are too crazy to cross your mind."

"A good rule of thumb for a lot of things in life is that everything that can break will eventually break."

"In fact, the most important part of every plan is planning on your plan not going according to plan."

-Morgan Housel, from the chapter Room for Error in his The Psychology of Money:  Timeless Lessons On Wealth, Greed, and Happiness

The impact of attitude..................

..................................and psychology on the economy has always seemed vastly underrated.

     Observing the tariff bill's emergence from across the Atlantic, the London Standard's editor concluded that the legislation's "ultra-protectionism" would guarantee Britain's continued supremacy in the overseas carrying trade.  He foresaw for America political and economic havoc in the form of "further deficits, gold shipments, a fatiguing succession of strikes and panics and fanatics as political saviors."  It didn't turn out that way.  The country's devastating deflationary spiral that had begun in 1891 had turned around, with raw-material prices reaching their lowest point in 1896 and manufacturing goods beginning a steady rise in value about a year later.  This turnaround unleashed a spurt of economic activity, with mining, manufacturing, and farming all contributing potent spurts of productivity and growth.  Not even high tariffs could dampen this surge of economic activity.  "Wealth of all descriptions began to increase in an unheard of way," wrote Tarbell.   Commercial interests quickly credited the president with these favorable portents, and McKinley naturally took pride in what he viewed as the vindication of his decades-long protectionist embrace, though the evidence was scant that the new tariffs actually had any impact on the economic rebound. The "business men of both parties not only express satisfaction with the situation," New York's John McCook wrote to the president, "but rightly attribute the results accomplished, to the manner in which you have been able to . . . carry through what was practically an adverse Senate, the tariff legislation."

-Robert W. Merry, President McKinley:  Architect of the American Century

Just go with the flow...............

     Surfing has superb experiential flow qualities.  You often surf better if you think less and let the surfing come, maybe coaching yourself with "Okay, don't get bogged down in technicalities; just go with the flow."  When things are really coming together in a session or over a week, the flow experience comes on in full force.  You surf your best without trying, doing fluid, radical turns, which start feeling automatic, as though you are watching them just happen.  Time seems to slow.  You feel open, connected, empathetic, and yet effectual, in riding along with the physical liquid flow that is a breaking wave.  Those times of peak attunement are also fleeting.  No less important are the ordinary days, in ordinary waves, with all the mellow and harmonious feelings, the sheer fun and beauty of the deed, the pleasantness of being immersed in salty air, a wispy breeze, and glassy, gently shifting,  luminously reflecting seas.  "It's good just to get wet" is what surfers say.  You need it, often if not daily, to feel sane and stay stoked.

-Aaron James,  Surfing With Sartre:  An Aquatic Inquiry Into A Life Of Meaning

In principle..........................

The study of the psychology of speculators is as valuable as it ever was. I think the clearest summing up of the whole thing was expressed by Thomas F. Woodlock when he declared: "The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past."

-Jesse Livermore

Conscious..............................

Spinoza offered an analysis of psychology according to which the most pleasurable emotional states are those that are least affected by external factors.  To let oneself be cast down by things that are outside one's control, or even to be elated by them, is to lead a most unrewarding sort of life.  We can, however, take command of our thoughts, emotions and desires to some extent by bringing them under the sway of reason.  The way to do this is to uncover their causes, for by being conscious of what determines us to act in the way we do, we can transform our mental states into active expressions of ourselves rather than mere effects of our environment.

-Anthony Gottlieb,  The Dream Of Enlightenment:  The Rise Of Modern Philosophy

Interesting sentences...................

"The logic of solidarity in marginality requires oppression, and solidarity in marginality is necessary in order to sustain liberal power."

-as culled from here

It is an abundant universe...............................

.............................we should act like it (and be grateful).


"The global oil market is no longer dominated by a psychology of scarcity, but rather one of abundance."

-as excerpted from this The American Interest blog post

On Kool-Aid drinking................

Mr. Bondi:   "...we're investigating the causes of the financial crisis.  And I would like to get your opinion as to whether credit rating agencies and their apparent failure to predict accurately...cause or contribute to the financial crisis?"

Mr. Buffett:   "It didn't cause it, but there were a vast number of things that contributed to it.  The basic cause, you know, embedded in psychology - partly in psychology and partly in reality in a growing and finally pervasive belief that house prices couldn't go down and everybody succumbed - virtually everybody succumbed to that.  But that's - the only way you get a bubble is when basically a very high percentage of the population buys into some originally sound premise and - it's quite interesting how that develops - originally sound premise that becomes distorted as time passes and people forget the original sound premise and start focusing solely on the price action.
      So every - the media, investors, the mortgage bankers, the American public, me, my neighbor, rating agencies, Congress - you name it - people overwhelmingly came to believe that house prices could not fall significantly.   And since it was the biggest asset class in the country and it was the easiest class to borrow against, it created probably the biggest bubble in our history.
      It will be a bubble that will be remembered along with the South Sea bubble and the tulip-bulb bubble."

-as excerpted from Warren Buffett's testimony in front of the Financial Crisis Inquiry Commission

More twitching.........................

"Unexpressed emotions will never die.  They are buried alive and will come forth later in uglier ways."

-attributed to Sigmund Freud