“Once a stand is taken, there is a natural tendency to behave in ways that are stubbornly consistent with the stand.” – Robert Cialdini
“To make a mistake is only human; to persist in a mistake is idiotic.” – Cicero
‘While you’re saving your face, you’re losing your ass.’ – Lyndon B. Johnson
Every day we are presented with a choice, either to continue on with a given long held belief or change our minds.
New evidence presents itself, or different ways of thinking become available. Do we amend what we’ve already thought and said? Or do we persist on the road we’ve already been headed down, stubbornly?
Sounds obvious and simple, but in practice it’s not.
Reversing a strong opinion already expressed makes us uncomfortable. It is a tacit acknowledgement that we were previously wrong about something. The more vociferous we are at expressing a belief, the harder it becomes to back off of it. Something extreme has to happen, most of the time, in order to do a 180 publicly.
Sometimes an idea or investment will go against you. Were you wrong? Just early? Is the market wrong? Did something unexpected ruin your thesis? Can you back off?
.....know your limits and not take on more than you're capable of!
However you can you change your mind. Saying it out loud is hard to do. The impulse toward saving face is too powerful. Plus, it’s a slippery slope – if you were wrong about this very big thing, how many other things are you wrong about?
The subconscious process looks something like this:
- I believed very strongly about this specific thing
- I am very smart
- Therefore, this specific thing I believed in has to be true
There is a way out and an investor calls it a stop loss. Maybe it may be termed an off-ramp. Set it up in advance. “I believe that I am right, but I will admit I’m wrong if the following happens…” Say an investing idea drops by 20% or more, contrary to the direction you thought it would go? Simply cut it...that works.
You have to have an out. Human beings and investments aren’t gods or principles of science and physics. They don’t deserve your undying faith or unquestioning loyalty. They will let you down. The story will change. Their negatives will eventually outweigh their positives. Their true motivations or weaknesses will become evident in time. You don’t have to drink the kool-aid or go down with the ship.
Fill in the dots, it's not that hard. “I’ve changed my mind because _____ and _____, which I hadn’t considered before.” This will save your skin to be there another day.
The bottom line - Most us have to put our hand on the hot stove to learn not to do it again....we are human after all.