Behavioral Finance 101

Quick Note: This thread is not for Pros, but for new investors trying to figure out the stock markets.

Quick Note 2: There is a existing thread on similar lines but it sounds garbled to me. We need a simple English solution to discuss this subject.

Admin Note 3: Behavioral Finance involves using words that are blunt. Those exposed to Charlie Munger will be able to easily tell you he does not mince words. So if I am to continue this project, I will not be able to mince words. There will be brutal words. - Fair Disclosure.

For those interested, Prof Sanjay Bakshi runs a Behavioral Finance Class at MDI Gurgaon. But for new investors, there should be a launch pad, so I am hoping to start a small effort here.

I am not qualified, but my teacher Charlie Munger is rock solid. I am hoping to slowly share what I learnt by listening to, and from reading his books.

I feel on VP while we have a lot of discussions on stocks (and it’s a wonderful thing), but, investing is in some people’s opinion (myself included) is 50% Excels and 50% Behavior. So by not paying attention to behavioral finance to quote my teacher Charlie Munger “Is like being a one legged man in an ass kicking contest”

First; what is Behavioral Finance.

So as is clear there have to be two aspects to it;
a. Behavior - You. Your mind. Your rationality.
b. Finance - Reasonable number skills. But I assure you, being an excel ninja is not needed to be reasonably successful in stock markets :slight_smile:

So here on this thread I will stick to behavior. The errors if any will be mine, of knowledge, of limited English writing skills, and so on, so please pardon me for not being perfect in this concept, but I do think even if I get across 10% right it will expose you to the wonderful world of behavioral finance.

And I assure you, Behavioral Finance is real. Just as real as economics or finance. But this works more like a tandem jump or mash of stoicism, self awareness and rationality.

So, imagine a finance post and the below poems are the first learnings to deeply understand Behavioral Finance (it’s ok to laugh at this); they are so far away from balance sheets; I will close this post at the end with some poems, and continue further with as much time I can commit, it will be slow though, if some people here would like to explore this subject.

My most favorite poems on behavior, which I think need to be read 100 times in 100 days to fully grasp (1 reading is reading, 10 readings and the words start to make sense) and the rest of our life to try and to as much as possible, implement.

A.E. Houseman–

"The thoughts of others
Were light and fleeting,
Of lovers’ meeting
Or luck or fame…
Mine were of trouble,
And mine were steady;
So I was ready
When trouble came.”

and

Rudyard Kipling

If—

If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:

If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;

If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools:

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: ‘Hold on!’

If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!

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So I will start with our own selves. Us. Who we are (most of us) and a little of what we need to know.

We all go to school and most of us go to college. Some study even further. We are given knowledge of the past.

We are not given wisdom of the past.

Today a person who is on VP, would they not have appreciated if in school they were taught about investing and about what is money?***

Would many not have appreciated if at home at 15 or 18 they were introduced to Index Funds, or to Nestle as a stock? But you could do it for your children. So you should. That is part of the wisdom we need to live on the planet. At least the Money wisdom part.

***How many even now here on VP really understand what is money? Anyways, going forward;

Do you know that there are 14 dead people for every person alive on the planet. Which means for the 7 billion plus who inhabit the planet today, there are 98 billion dead people. We can surely benefit from their lives and their learnings. Although, most just live and die but learning nothing, only knowing what they knew for sure. They had no doubt about anything, but they could not even repair a toaster, forget being able to make one, and totally forget them being able to invent it. But they were confident of their illusory skills. Maybe an illusory life is a better life, because in the mirror is a rock star, there is a fancy iPhone, there is a car they can ill afford, but they can look posh when they get out of it, so maybe rationality is painful and truthful, so maybe better to not face the truth for most. Because most cannot face the truth. Thus, maybe it is not worth learning from all the dead, but surely we can learn from as Mr. Munger says “the eminent dead”. They have more to teach about life and a successful life than the TV in front of us.

Coming back to the alive and dead, All these 7 billion alive and the 98 billion dead had dreams, desires, wants and needs. See I carefully kept needs at the end because there is only one thing we need fulfilled; our needs. Rest is all stuff we stack up. Do you think if one were in a war zone, hungry for 15 days and thirsty for the last 3, they would choose bread and water and peace or a Ferrari? We need water, we need bread. We don’t need an iPhone. But what do we spend our day thinking about; women, hot women (desires), millions and billions of money, winning a lottery (dreams). But does one think about Water? Egg? Vegetables? Peace?. Which are our real needs. So in life to start distinguishing between needs and wants and desires and dreams is critical to figure out the first steps to a more rational mind.

Also, it is important to understand, we are not unique. Everyone who is alive currently and the dead all wanted the same things. They had lust for money, for power, greed, envy, jealousy etc…

We have to attempt to banish them from our thoughts. Then our needs are little and simple. We can start thinking more clearly when we think with a cleaner soul and not with a mind buzzed with electricity of so many wants and desires.

—End for today.

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“Acquire worldly wisdom and adjust your behavior accordingly. If your new behavior gives you a little temporary unpopularity with your peer group…then to hell with them.” Charles T. Munger

Charlie is a big fan of, and also introduced me to, Cicero (Marcus Tullus Cicero). One of “the eminent dead”.

There is much to learn from Cicero but I will leave you with few nuggets here and the rest for you to dig.

Cicero said, “Taking pride in a job well done is vastly constructive”. To which Munger added “As you pat yourself on the back for behaving well, you will improve your future conduct”

Also, Cicero the learned man that he was, believed in self improvement so as long breath lasts. I too believe in something similar. I have for long believed a soldier dies on the battlefield; so I do not wish to retire from work or in life, I wish to work as long as I am alive.

For the young, from Cicero, if you live right, the inferior part of life is the early part. Also, the best a young person can hope for is to get old before he dies, and it is not fitting to complain about getting the best outcome you could have reasonably wanted.

Moving on after giving you a glimpse of Cicero and back to Munger.

Although most have heard this overused word Lollapalooza now, but it was invented by Charlie.

Lollapalooza: The critical mass obtained via a combination of concentration, curiosity, perseverance, and self-criticism, applied through a prism of multidisciplinary mental models. In plain English - When you have done a lot of a little bit or a little bit of a lot, sometime and somewhere, things start clicking and and that starts the Lollapalooza in your life.

I think one of the best contributions of Charlie is his latticework of mental models.

But for us to proceed to understand mental models, the below is first important; he explained, you have to have;

“An acceptance of reality.
I’m afraid that’s the way it is. If there are twenty factors and they interact some, you’ll just have to learn to handle it-because that’s the way the world is. But you won’t find it hard if you go at it Darwin-like, step by step with curious persistence. You’ll be amazed at how good you can get

We are going to in further posts go through the many mental models, one by one, one day at a time. For today we are building the base for those mental models.

“Take a simple idea and take it seriously”.

Charlie has said, I’ve long believed that a certain system–which almost any intelligent person can learn–works way better than the systems that most people use. What you need is a latticework of mental models in your head. And, with that system, things gradually get to fit together in a way that enhances cognition. However, my particular approach seldom seems to get through, even to people of immense ability. Things usually die after going in the “Too-Hard” Pile.

Basically, he is saying even people generally considered smart are quite stupid and unable to work on improving themselves as they find it too hard. Frankly, my personal experience has been more of the same. I see seemingly smart people do stupid things every day, because they have no system or rules for managing their affairs outside their knowledge or skill set of work, which provides them with food shelter and comfort. They don’t want to find out more about themselves or improve themselves after that.

So, is this going in your “Too-Hard” Pile or are you ready for the mental models? Coming soon on this thread on VP near you!

–End for today

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This presentation fully fits the theme of this thread.

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Mental Model 1

Man with a Hammer Syndrome

To a man with a hammer, every problem looks like a nail.

Now, Although Mr. Munger is very self explanatory, let’s explore a couple of real world examples. With the first one from him itself.

“What made these economists love the efficient market theory is the math was so elegant. And after all, math was what they’d learned to do. To the man with a hammer, every problem tends to look pretty much like a nail. The alternative truth was a little messy, and they’d forgotten the great economist Keynes, whom I think said, ‘Better to be roughly right than precisely wrong.” –Charlie Munger

On our own VP and in fund managers, we have professional math and DCF specialists. Then because they are extremely good at math, sometimes I see they don’t pay heed to the fact that markets are not efficient. I have heard things like, you never know when it rains; don’t time the market; I know my numbers, math is what I will go with, and so on and so forth, endlessly. I mean, come on, we know you guys you know your math, but then what the are all the others talking about. Look around and see behavior and use other mental models as well. This is why only a few people survived happily the bloodbath from early 2018. DCF specialists saw a problem, they had a hammer (math), they thought it is a nail, then sorry to say it but… their portfolio’s got a little nailed.

So to math specialists, they must use their math mental model, but maybe they could also learn the other mental models, their lack of knowledge of them, or refusing to accept their very existence, is not going to make the other models disappear, and it is not going to make markets efficient if they could just keep their eyes closed for a long enough time. Markets are in-efficient.

I have also mentioned this elsewhere, the graves of value investors are dug on pristine balance sheets; be careful with them. Pristine balance sheets exist in Wonderland but in stock markets they are usually Kryptonite. Likewise, same for price to book investors, their bodies are riddled with enough bullets filled with “book value gun-powder”. Same for low PE investors and so on. Build multiple mental models.

Apologies in advance to DCF specialists - But you guys really needed to smell this coffee so you can do better :). Now, I will also add, I have invested all my money via MF’s. So I solidly believe in, and I give my money to invest only to people who understand the math part of stock investing very well, so I personally don’t take their skill lightly, I only don’t take their skill very seriously either. It is not the only skill. You cannot take one single skill and tackle a complex organism like the stock market or most other organisms of commerce.

The above few examples relate to investing. For a deep dive into the pitfalls that people have faced because of Man with a Hammer Syndrome, please google it, you will laugh your guts out, and also learn about various applications of this syndrome, how widespread it is across all industries, and also in personal lives.

Now I hope we understand this syndrome better, it applies in investing, in life as well, and awareness of it will help us avoid many biases, and the next time while we still use what we already know, maybe we also build and use a repository of multiple models, and then attack the real problem. It may after all not be a nail".

–End for today

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Good initiative.

I would recommend three more poems on top of the two by A.E. Houseman and Rudyard Kipling.

All the best!

Sanjay Bakshi

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Oh my god. I am dead. Someone pinch me.

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Third poem is so profound. Thank you @Sanjay_Bakshi for contributing to this forum. I was a silent reader of @valuestudent. Hope to hear from you refining thoughts on behavioural finance. I am a struggling novice.

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There is nothing esoteric about the subject. It’s just elementary common sense. But the world has gone crazy in making the subject so complex. There is a cottage industry in identifying new biases there now!

Apart from poetry, I would also recommend material on spirituality. Spiritual gurus got there well before behavioral economists. Take the example of “equanimity” an idea about maintaining a balanced mind, that’s at least as old as Buddha and probably much older.

The term “Upekkha” From Dhammapada means equanimity - or a balanced mind. To have a balanced mind requires overcoming loss aversion (Kahneman), and treating the losses and gains just the same (as Kipling advises in his “If” poem). It means the quality of being emotionally calm, balanced and even (or especially) when confronted with difficult situations.

Similarly, if you want to learn about “impermanence” read up on Buddhism.

If you want to learn about multiple points of view (the “outside view” idea of Kahneman looks at just one additional viewpoint) read up on Jainism and you will encounter “anekantvada,” a doctrine of uncertainty which entertains plurality and multiplicity of viewpoints. You will learn about “saptabhangi” which establishes that knowledge of reality is relative. The seven possibilities that the saptabhangi doctrine outlines are: maybe, it is; maybe, it is not; maybe, it is and is not; maybe, it is inexpressible; maybe, it is and is inexpressible; maybe, it is not and is inexpressible; maybe it is and is not and is inexpressible.

You read Seneca and the other stoics, and you will encounter ideas that are old and wise and have stood the test of time.

The more you will read on spirituality, the more you’ll come to the conclusion that behavioral finance is nothing but an old wine in a new bottle.

Sanjay Bakshi

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Hi. Thank you for starting this thread. I have been a silent reader and learner all this while on this wonderful forum since last year but this thread on such a topic which is perceived to be complex and the pearls of wisdom shared by you have kind of forced me to pen down my thoughts and show you gratitude.

The knowledge being shared here is of immense help and is paving a way for novice investors like me to learn the nuances of investing and help build mental models.

Please keep sharing. Thank you so much.

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Behavioural finance is the corner stone of the stock market. Human psychology + Applied economics = Behavioural finance.
I want to share one story on “Sapta-bhangi naya, i.e. seven perspectives or anekanta-vada” from Jainism - “The seven blind men and an elephant”. It is a story of a group of blind men, who have never come across an elephant before and who learn and conceptualize what the elephant is like by touching it. Each blind man feels a different part of the elephant’s body, but only one part, such as the side or the tusk. They then describe the elephant based on their limited experience and their descriptions of the elephant are different from each other. They come to suspect that the other person is dishonest and they come to blows. The moral of the parable is that humans have a tendency to claim absolute truth based on their limited, subjective experience as they ignore other people’s limited, subjective experiences which may be equally true.
The same applies to the stock market. The one who sees the whole elephant wins the game.

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That’s a wonderful parable. And proves the point that wisdom is actually quite ancient and modern economists have taken them, recycled them, turned them into theories full of mathematics and re-branded them into “behavioral finance.”

Look, I teach the subject, so perhaps I should not be saying this. But it’s the truth. The more ancient texts I read (and I only just started a few years ago) the more ancient wisdom I find there. Nassim Taleb’s idea of the Lindy effect is applicable here. To find wisdom, look for it in old texts that have been around for hundreds, if not thousands of years.

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You are right Sanjayji. When Mahatma Gandhi was asked by an American journalist, “What is your opinion on the work of Karl Marks?”, Gandhiji candidly replied, “This man seems to have learnt the art of making simple things complex.”
Same applies to the stock market. People often make investing very complex. Stock market is the function of economics and psychology. And psychology doesn’t fit in any formula such as DCF method, thus, making markets inefficient. And this is here comes the behavioural finance. Mr. Warren Buffett understands this very well, so we can learn a lot from him.

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What are the different biases and how can we overcome them to think level headed in the context of Indian market where value system is poor, corporate governance leaves a lot to be desired, among small caps and microcap many have Nexus between operators and promoters robbing small retail investor his money. So what way we can harness behavior finance to Wade through these and more such challenges.

Guys @kartiks & @jainmayank5. First thank you for the kind words.
I really appreciate them.

For further new investors who may come and read these posts, I am saying this now and one time.

Please do not express gratitude. I am not writing anything spectacular. I have read about all this, and somehow it gelled with me, that is all.

If there is someone to thank it is our tireless moderator @manish962 who when I was a total rookie did not ban me like a half a dozen times and kept giving me advise and opportunity to improve. If he would comment, he might come and say, stop overestimating yourself, I was close to banning you a full dozen times :slight_smile:

I have learnt most of what I know here.

You guys are so humble, you will figure this out in no time. As Prof Bakshi said, it is actually quite easy. So nothing spectacular in what I am writing. I did not invent it. I am simply a typist of the messages I have been provided in books. I am not the genius here.

So going forward, guys please no more thanks from anyone. A good thanks will be you taking initiatives for the newer investors who will come here seeking the same answers.

It is I who have to thank VP for allowing me on this journey to self improvement and now it is my privilege to share some small tidbits I learnt. So many here taught me with no expectation of return. They made me a better human being. But I am still a ruffian :stuck_out_tongue: so some more way to go to improve on that aspect too…

Do not for a moment think I am preaching gospel, I am a man of many faults.

For example I was a daily drunk until 2017. This forum reintroduced me to books and my quest for knowledge took me further.

I wanted to read every minute of the day I had time, so I stopped drinking daily to be sober to learn and read, and now only enjoy an occasional drink once or twice a month. The books and VP saved me. That is the real me. There is more gross stuff, but I am not telling you any more :slight_smile:.

I am just another ant on the planet. Albeit an ant who likes black label. Little soda and room temperature water :slight_smile: But now only 2 times a month.

Next mental model coming tomorrow morning :slight_smile:. I will be taking a flight after that early tomorrow for a short break, but will try to post as soon as I am able to.

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Mental Model 2

Tell me where I’m going to die, so I don’t go there

I don’t want to go back to Go. I’ve been to Go - Charlie Munger

Remember the game of snakes and ladders (saanp seedi)?. When you reached 99 there was a big long snake that would bring you back to 1. That is what in essence is the meaning of this sentence from Mr Munger. It means we need to realize we need to get rich only once. But there are multiple times one can lose their wealth, so it is very crucial to once at number 50 or 60 or 90 (not in age, but in financial assets needed in life) to take steps accordingly. We don’t want to ever go back to go!

I will share a personal story of a human being. I have seen this happen in front of me. There is a person who was one of the richest people of Scotland. Calum Melville. Worth at one time till 2016 more than 1 Billion USD.

He took some financial risks and bet on something his entire net worth. He was so sure of his bet. He lost the bet. He went bankrupt. A billionaire went bankrupt overnight, on a gamble he took. If you want a hint on his gamble, he was an oil baron.

Now being bankrupt, he reached a stage in Dubai where he could not even pay around 1500 USD (1 lac rupees) that he owed to someone, and the people he owed money to, sent people to hold him up in his office, not allow him to go out, while his family arranges the money to return to the owed 1500 USD. Anyhow, his family somehow provided the cash, and this guy was let off.

I was was wondering, how did this guy go "Back to GO!” from being worth 1 Billion USD? I mean what was he thinking? Whatever bet he took, why didn’t he bet 900 Million and keep 100 Million. Ok, He wanted to bet big. Why did he not keep 10 Million and bet 990 Million? At least he would have had 10 Million USD left over.

The answer after some time was clear. A person cannot manage their financial affairs after succeeding the same way as they did before succeeding when they took high risk.

A person has to get rich only once, this guy made it, but then he should have realized that now he is rich already, and he does not need to take those risks anymore, he is already where he wanted to be. Now he has more to lose than to gain.

There is a pre-money risk taking stage, and a post-money risk taking stage. Take decisions based on where you are now, not how you got here. Do not take any risk that can take you back to go!

Unfortunately, this is not the only such case I know. There as so many who have gone back to go! after having left from there long ago.

I will return to the mental model of “Tell me where I’m going to die, so I don’t go there” which is the same as the don’t go back to go. In different words.

Let me give you another example;

You know there is widespread Aids. Now, you are in Africa, which is the epicenter of Aids. And there you end up in a eh… a pickup joint and with no protection for you know what. And you decide to give in to your urges. So, you have made mistake 1; non protected, then mistake 2 in a red zone (Africa) where probability of this is higher, and then mistake 3 that it is the red spot (not an average person but a pick up for money) of the red zone. I mean if the average chance of Aids happening was 0.0003% one has taken it up to 50%. Basically a coin toss.

This is why Mr. Warren has said, even if a gun has a million chambers and only one bullet, we cannot take a Russian Roulette bet, where one is either dead or wins a 1 million USD.

Another example, I saw it recently in India. A guy came promising 3% per month returns to some people in South Mumbai. One old couple gave him a crore. He diligently came and gave them 3% interest per month for 3 months. So the elderly couple have a chat between themselves. They are like, we have another 6 crores lying in fixed deposits. Why don’t we give it all to him and this is a nice fellow, we will get 21 lacs per month, what are we getting in the bank FD anyway.

So they give him their entire balance life savings of 6 crores. He pays them for another few months and then comes back and says, sorry he had bought some futures or options or calls or puts or whatever (I don’t understand the names of these products exactly) and he has lost it all.

He lost an elderly couple their ENTIRE life savings. See, they got greedy, they were thinking about the 21 lacs every month and what they could do with it, and forgot to think about risk. It can happen even to the elderly who have seen, and experienced much over their lifetime.

Tell me where I’m going to die, so I don’t go there” is a very powerful mental model. One of the most powerful.

Whenever we get a proposal, we have to train ourselves to first see the downside (risk), and if the downside is unlivable with, even at one in a million odds (like Warren’s Russian roulette) we best walk away. We can only take risks which if they do not work out, do not lead to ruin.

This is a very big subject, so all I can do it touch on it a little bit, but I have found, as I go along in life, in many scenarios, from the time I understood this principle, I have automatically started using this model before I do something, so it is sort of a self evolving model once we are introduced to it, and a lot of fun!

This model is such a powerful and big concept, I can only share a little bit of ideas and a few stories to help explain. To really get this concept, there is an entire book devoted to it. It is called “All I Want To Know Is Where I’m Going To Die So I’ll Never Go There”. - by Peter Bevelin. If you wish to explore this even further.

–End for today

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Absolutely !
Heard Vishal Khandelwal speak on this same issue.
Simplistically put, It is not the probability of the event coming true but the consequence of the event coming true that determines the risk.
so even a very low probability event with a very high degree or severe consequences actually scores HIGH RISK.

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Sir,
Could you please recommend some books on spirituality that you have read?




Guess this stock. Full points if you do before scrolling down.
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Mental Model 3

Bias from over-influence by social proof

Mental Model 4

Authority Bias

Now how many of you would have done much work to research a stock if the above were the comments. High five me if you would have done what I would have done. If the above were the comments, I would have 100% bought the stock without even downloading the screener excel :slight_smile:

Guys and Gals, The above was a work of fiction created by me using simple google chrome. But this is the power of over-influence by social proof. One will be given this proof on TV, on Social Media, one may even forget where they read about it, but it will stick in their mind and may make one take irrational decisions.

One may come under the influence by comments from Authoritative figures. Authority Bias.

Social Proof Bias and Authority Bias are interlinked but they also operate independent of each other.

A few examples with all respect to the people named… only for learning the lessons.

Porinju has bought stock X - Did it influence you?
Vijay Kedia has bought stock Y - Did it influence you?
Rakesh Jhunjhunwala has bought stock Z - Did it influence you?

First and foremost the buyer (yes, even a stock market guru) may be making a mistake. What happened to your researching the stock, and not getting influenced and using your own mind to decide.

Second someone may have bought 5% of the company in delivery and simultaneously shorted the stock. You don’t know about it.

Charlie Munger refers to the book “Influence” by Robert Cialdini quite a few times. This is a book recommendation. If you have not, it would be great if you found some time to read it. You will learn about the many ways a person can be influenced and how people and businesses use this system. A system to influence.

This trick is used by many mediums (blogs, plugs in newspapers, plugs in tv) and they make you believe that this is the golden key to success that you have been waiting for, and one forgets research and simply presses the buy button. The social proof is overwhelming.

As they say in Poker; If you’ve been in the game 30 minutes and you don’t know who the patsy is, you’re the patsy.

Caveat Emptor.

—End for today

PS: Still on vacation but “someone” ditched me today :wink:. So managed to squeeze in a post. Will try to do the next one as soon as I can.

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Mental Model 5

The Power of Incentives

Never, ever, think about something else when you should be thinking about the power of incentives.” - Charlie Munger. According to Charlie there are only a few forces more powerful than incentives

One of the most precious tricks of life is to learn, master and use Incentives as a technique. This technique can be very successfully used on humans, monkeys, dogs and probably even on trees :slight_smile:. It seems no one is immune to incentives.

So then, we humans are very gullible when this Incentive trick is used on us; and it is used on us everyday.

The best part of it is, when we fall for it, we brag about how we got a deal. That is what makes this work.

Some innocent examples;

“Buy 1 get one free” - Listen, no one gives you free stuff. Definitely not Colgate or D-mart. Get it :slight_smile:

“Stay for 3 nights and get 4th free” - Lol. Do I need explain :slight_smile: I think you all are now getting this game.

“Sales Incentives” - Bhaag Tiger Bhaag. Target kiya to paisa milega.

“If you finish your homework by 9, I will take you for an ice cream” - Wait, are you mistreating your children now and taking advantage of their innocence? How terrible of you :slight_smile:

Not so innocent examples

“Your potential financial advisor sends you a cake on your birthday”. For example, I get more than a dozen cakes, flowers and cards from financial advisors every year. They seem to love me more than my own friends :slight_smile:

“Your bank branch manager comes home. Says, you are more like a friend than a customer. You know specially for you I am recommending this FMP fund. I am investing in it myself. This one I am recommending only to a close knit group.” But you are friends now right? We gotta listen to our friends, no?

So are incentives bad? No.

You just hope that incentives are used for good. But for people who understand incentives, they can do much with them. It is a very powerful tool.

Now keep on the lookout for incentives being thrown at you and soon it will become part of your arsenal. It is so much fun when I see people trying to use it on me. I am smiling inside at the novices :stuck_out_tongue:

—End for today

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