an Uncertainty circuit
With apologies for being out of touch, I would like to make a couple of notes on psych cap. First, and I have said this before in different way, it really does appear that our brains have special “curcuits” for detecting imprecision or uncertainty. In other words, that feeling that someone or something is there – even if you can’t see or hear anyone? (which would have come in handy while searching for food in the woods) most likely has its own chip.
And this chip works.
Ever wonder why you review your plan and within minutes do exactly the opposite? It is because your brain detects that the plan doesn’t perfectly fit the circumstances and it goes into “ambiguity” mode. In ambiguity mode it relies on gut-feel more than anything. …. yet who among us has really been taught to systematically use gut-feel?
In that mode most of us are lost. We can’t tell the difference between a tickle that the market is going to turn on us and residual fear left over the last time the market burned us.
Now this game ain’t easy – and to make it harder is this conflict between planning for markets in estimated probabilities while fighting our brains which are using the uncertainty circuit. There is only one solution to this – get better at differentiating amongst our feelings. Don’t blame the messenger but the data lies there.
Tags: knightian uncertainty, Uncertainty