Category Archives: wisdom

(book review) The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life by Mark Manson

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TL:DR: Giving so many f*cks about so many things–especially about things that don’t matter–will drive us crazy and make us unhappy. This book is not only incredibly dense with wisdom but also incredibly well written and edited. It really feels like every word was chosen and place carefully, so as to make the precise point intended. I highly recommend the book, and think you will find value paying attention to each and every word.

We live in a world that is constantly berating us to do more, eat more, make more, sleep more, exercise more, buy more, own more, etc. Here in the United States, the world seems to want us to give too many fucks about too many things. As Mr. Manson suggests, this is probably because the U.S. is a capitalist society and this is good for business.

Don’t let the title fool you. The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life by Mark Manson is a book full of deep insights and smart wisdom that can help you live a better life. Mark does an amazing job of examining behavior that hurts us, so that we can stop repeating our mistakes. There are so many lessons but some of my favorite are:

Life is about choosing which pain you want to endure. One of the biggest takeaways for me was that life is about choosing which pain you want to endure. There is no one choice that is pain free. There are always pros and cons to each choice. You just have to pick the choice for which the cons are something you are willing or enjoy enduring.

Our plentiful society is anxiety inducing. Much of the angst we feel is a result of the vast range and number of opportunities we have in our society. The more we have opportunities we have, the more things we have to measure up to and feel worse about ourselves.

We have really become the victims of our own success. Stress related health issues, anxiety disorders and cases of depression have skyrocketed over the past 30 years. Despite the fact that everyone has a flatscreen tv and can have our groceries delivered.

We have so much f*cking stuff and so many opportunities, we don’t know what to give f*ck about anymore.

Our ability to think about our own thoughts makes things worse. Humans are the unique animal that can think about its own thoughts. Other animals just feel and react to that feeling. As humans, however, we worry about worrying, get more anxious about feeling anxious, get angry about getting angry, get more sad about feeling sad, etc. This ability to think about thoughts and feelings means that we compounding our negative feelings. This is why it is so important to not give a f*ck, because doing so means that you stop that recursive loop and stop hating yourself for your feelings. By not giving a f*ck we simply don’t care that we are sad, angry, anxious, etc. and we move on. “We should accept that the world is f*cked and move on, because it has always been that way and it always will be.” says Manson.

Wanting a positive experience is itself a negative experience, while accepting one’s negative experience is itself a positive experience.

When we give too many f*cks, we set ourselves up for perpetual and unnecessary disappointment. 

When you give a f*ck about everyone and everything, you will feel that you are perpetually entitled to feel comfortable and  happy at all times. that everything is supposed to be just the way you f*cking want it to be! This is a sickness, and it will eat you alive. You will feel that you have the right for have everything feel the way you want it to be!  You will see every adversity as an injustice… Every challenge as a failure…

Every inconvenience as personal slight…

Every disagreement as a betrayal.

 

There is a subtle art to not giving a f*ck; and it doesn’t mean being indifferent. “There’s a name for someone who finds no emotion or meaning in anything…a psychopath.”  Not giving a f*ck does not mean being indifferent. It means being comfortable with being different.  Since being indifferent requires figuring about what matters to you, being indifferent requires figuring out who you are and want to be. And since understanding oneself to this degree and what our guiding principles will be is difficult, Mr. Manson properly notes that:

Learning how to focus on what matters…what matters to you, is extremely hard to do; but it is the most worthwhile thing we can work on in our life.

People who act indifferent are probably the saddest form of a human being possible.

People who act indifferent are actually lying about their difference. They actually give too many f*cks about too many things and are too afraid to speak up and act on their own views. The bellow quote from the book’s preface best sums up the driving motivation of the book:

“There’s absolutely nothing admirable or confident about indifference. People who are indifferent are lame and scared. They’re couch potatoes and internet trolls. In fact, indifferent people often attempt to be indifferent because–in realit–they give way too many f*cks. They give a f*ck about what everyone thinks of their hair, so they never bother washing or combing it. They give a f*ck about what everyone thinks about their ideas, so they hide behind sarcasm and self-righteous snark. They’re afraid to let anyone get close to them so they imagine themselves as some special unique snowflake who has problems that nobody else would ever understand.

 

Indifferent people are afraid of the world and the repercussions of their choices. That’s why they don’t make any meaningful choices.  They hide behind a gray, emotionless pit of their own making.  Self-absorbed and self-pittying.  Perpetually distracting themselves from this unfortunate thing demanding their time and energy called life.

 

Because here’s a sneaky truth about life. There’s no such thing as not giving a f*ck. You must give a f*ck about something. It’s part of our biology to always care about something and therefore to always give a f*ck. The question then is: What do we give a f*ck about?  What are we choosing to give a f*ck about?  and How can we choose not to give a f*ck about what ultimately does not matter?

 

 

(book review) A Curious Mind by Brian Grazer

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TL;DR Summary:  I can’t say enough about this book. The content is rich, tangible, accessible, actionable, and as life-changing as anything I’ve ever read. Anyone who reads this book and makes curiosity a driving force behind their behavior, will be the better for it. Also, movie making might be the perfect career.

 

This week, I was fortunate enough to discover and read two books that have helped me better understand the world, life, and myself. Few books have been so meaningful and helpful to me personally as these two books, which were both shoe-ins for my “Favorite Reads” list.

The first book was The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life by Mark Manson.

a-curious-mind-9781476730752_hrThis post is a review of the second and equally impactful book: A Curious Mind: The Secret to a Bigger Life by Brian Grazer. I am sharing this book because it has helped me understand myself in a very core way and because it provides so many good ideas/ways for how to get the most out of life going forward. It really is a powerfully down-to-earth and joyful book that I think pretty much anyone can benefit from reading.

How to get the most out of life going forward.

Better relationships.

One thing I was probably most surprised to learn from the book was how curiosity can be a driving force behind good, healthy inter-personal relationships. For me, it’s more obvious how curiosity can make us all more thorough and more innovative professionals, but what is less obvious is how curiosity can make me a better people manager, spouse, brother, parent, friend, colleague, etc.

As a self-described servant leader, as a fiancee to my future wife with whom I want to build a long and fruitful relationship that doesn’t end in divorce, and as a brother and son to struggling relatives, the stories Mr. Krazer tells about how curiosity drives constant question asking and how this makes people more responsive to him, were priceless.

Better citizen.

No man is an island. We are all members of at least one society and organization, and so perhaps curiosity can be a driving force to our asking questions of our government organizations and elected officials. If we never ask why and seek to understand how things are done, things would never get done better.  Perhaps this topic can be an opportunity for a revised edition.

Proper questioning.

One thing I think worth highlighting is the difference between “questioning” and “asking questions”.  It is a subtle difference but also at the core of how curiosity can be very a powerful force for good; or an insulting and ineffective force that distances you from people and whatever thing you need to understand.

Curiosity can and should lead to you becoming inquisitive and asking a lot of questions in search of understanding. “Questioning”, however, implies critique, which puts people on the defensive. When people feel defensive, they will not share openly with us; and we won’t learn the truth from them. The whole purpose of being curious is to learn the truth. Instead of “questioning”, our aim is to inquire, discover, understand, and discuss ideas.

“Anti-curiosity”

Mr. Grazer makes it clear that he a proponent for using curiosity to achieve desired results. It is a tool and culture. He is not suggesting we be curious for the sake of being curious. I love the practicality of this.

Ever the proponent of curiosity but of also achieving desired results and being a leader, Krazer does something really smart towards the end of the book, and describes this idea of “anti-curiosity”.  He points out that we must also learn when to stop asking questions; otherwise, we increase the likelihood of being convinced by respondents to not move forward with an idea that we believe worth pursuing.

Better understanding myself.

Curiosity is a good thing…a very good thing.

As anyone with ADHD will tell you, we are constantly distracted by things. We are–by definition–wired to notice. Before reading A Curious Mind, I understood my distractibility primarily in terms of an ADHD mind. Since my curiosity inherently makes me even more vulnerable to distraction, and I’ve always thought of distraction as a bad thing, I saw my curiosity as a bad thing. In fear of “not getting anything done”, I’ve spent more time telling myself to ignore my curiosities than to follow them. Not anymore. In A Curious Mind, Brian illustrates–with many tangible examples–that being curious is not only a unique personality trait but an extremely good way to live one’s life.

It is tough to put into words–especially without becoming a bit emotional–how good it feels to have struggled so much with one’s own mind and then come to realize that you’re mind isn’t “broken”. As they say here in Silicon Valley, my unfocused range of curiosities is not a bug; it’s a feature. And this feels so good.

Making movies might be what I should do with my life.

I still remember the first great movie I saw: American Beauty. I was 18 years old. For me, that movie was far more than an entertaining two-hour escape from reality. Somehow, it was a believable story into which I could escape and at the same time continue thinking about the world but in a new light. It was a magnificent experience,  ingeniously written and executed.

The lessons the movie taught me have stuck with me to do this day, almost 17 years later. Lessons like how people can put up facades and hide who they truly are on the inside. How the people society may judge was “weirdos” or “losers” might be the sanest of us all. It put so much of our society in front of us to rethink and question ourselves, making the movie far more than a great story. Immediately after finishing the movie, I knew right away that this was my kind of movie. These movies that cause us to think about things differently. These are the movies that responsibly take most advantage of this most powerful medium.

I’m fortunate to have attended three great institutions of higher learning, all of which I took very seriously, worked hard at, and learned a tremendous amount from; but movies have been my other educational institution.

As I take a step back and consider my vast range of curiosities, my unique ability to engage with people with different backgrounds, my business and intellectual property backgrounds, and my passion for influential movies, what could be a better job for me than producing movies?

 

 

McKinsey Quarterly interview with Pixar award-winning Director, Brad Bird

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In the McKinsey Quarterly interview of Brad Bird, the award-winning Pixar film Director shared very interesting insights relevant to anyone leading highly-creative innovation work.   Below are some quotes from the interview and takeaways that are worth sharing.

Before I got the chance to make films myself, I worked on a number of badly run productions and learned how not to make a film. I saw directors systematically restricting people’s input and ignoring any effort to bring up problems. As a result, people didn’t feel invested in their work, and their productivity went down. As their productivity fell, the number of hours of overtime would increase, and the film became a money pit.

In my experience, the thing that has the most significant impact on a movie’s budget—but never shows up in a budget—is morale. If you have low morale, for every $1 you spend, you get about 25 cents of value. If you have high morale, for every $1 you spend, you get about $3 of value. Companies should pay much more attention to morale.

Takeaway:  It is how people feel that determines their productivity!

Our goal is different because if you say you’re making a movie for “them,” that automatically puts you on an unsteady footing. The implication is, you’re making it for a group that you are not a member of—and there is something very insincere in that.  If you’re dealing with a storytelling medium, which is a mechanized means of producing and presenting a dream that you’re inviting people to share, you’d better believe your dream or else it’s going to come off as patronizing.

So my goal is to make a movie I want to see. If I do it sincerely enough and well enough—if I’m hard on myself and not completely off base, not completely different from the rest of humanity—other people will also get engaged and find the film entertaining.

Takeaway:  It is critical to believe in what you are trying to create.  It therefore makes a lot of sense to make something that you yourself find valuable, and then trust your own judgment to represent preferences of a larger group.

[At Pixar] Steve [Jobs] put the mailboxes, the meetings rooms, the cafeteria, and, most insidiously and brilliantly, the bathrooms in the center—which initially drove us crazy—so that you run into everybody during the course of a day. He realized that when people run into each other, when they make eye contact, things happen.  So he made it impossible for you not to run into the rest of the company.

Takeaway:  In this information age, with more sophisticated new ideas and technologies swarming around us than ever before, small simple things are still elemental to success.  People making eye contact for example is necessary above and beyond simply being physically near one another.  Communication, engagement, sharing of information, and connecting with colleagues are fundamental elements that lead to effective collaboration and timely execution.

I don’t want him to tell me, “Whatever you want, Brad,” and then we run out of resources. I want him to tell me, “If you do X, we’re not going to be able to do Y.” I’ll fight, but I’ll have to make the choice. I love working with John because he’ll give me the bad news straight to my face. Ultimately, we both win. If you ask within Pixar, we are known as being efficient. Our movies aren’t cheap, but the money gets on the screen because we’re open in our conflict.  Nothing is hidden.

Takeaway:  Don’t waste time with interpersonal conflict.  Seek to identify points of conflict within the team and discuss it right away.   It sounds like, at Pixar, they don’t waste a lot of time and resources building movie parts that don’t ever make it onscreen; rather a large proportion of the work produced ends up in the final product; and this is because the team addresses conflict immediately, without letting it live subsurface, which is distracting and energy-consuming.

Do people have children as means for dealing with our own mortality?

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Do people have children as means for dealing with our own mortality?  Not that this would be a bad thing at all, but does it possibly explain our decision to have children and other deep motivations behind human behavior.

For a while now, I have been curious to understand why some people want to have children and raise a family, and why others do not.   We don’t really live in an age where we need children to do manual labor on the farm anymore so why do some people want something even when it–in many ways–it makes no rational sense.   For parents, children, after all, mean: more responsibility, less  freedom, emotional vulnerability and suffering caused by the relationship with them and their eventual extended family members, etc.

So why, amidst all these reasons to not have children, do people want them?  Since I believe we are rational creatures, we must be having childrent because we essentially feel that doing so will bring us more pleasure than pain.

Then I watched an interview with futurist Jason Silva, and he said some things about human behavior and psychology that I think make a lot of sense and that I had been wondering about for some time.

I think one of the ways children generate pleasure for parents is by helping parents deal with something every human undeniably struggles with: our own mortality.  We know we will die some day, but we do not like this; and so we do things to try and deal with this uncomfortable truth.   One way to deal with it is to rebel, and to try controlling it.    We can try to freeze ourselves in sub-zero ice chambers (Walt Disney) or we can get lost in an experiences that provides an escape or distraction from thinking about the fact that we only have so much time (movies and stories), or we can try and do things that make us feel like we can escape death (daredevils), or, I argue, we can try and create things that will live on after we die.   And I think having children–at some level–serves this selfish need inside us.   In addition, I think this need to create something that will live on beyond us, partially explains the attraction people have to:

  • writing books or blogs (putting their thoughts/voice into a medium that will live forever on Google’s servers somewhere)
  • create organizations or trusts that, legally, can have an infinite life
  • volunteer as mentors to younger people or children
  • join political movements that leave lasting change on something that will exist after we die (environmental movements)

Ultimately, I agree with Jason Silva.  I think all humans want to leave our mark in this world.  We want to feel like we matter; that we have a purpose.  I also  think our struggle of dealing with our humanity and mortality is so core and fundamental to who we all are that it is worth exploring and understanding further no matter who we are; and then make the world a more enjoyable place for us all.   As business person, for example, I wonder how I can create and manage a business in a way that makes people feel like they matter?   Can I listen to employees and customers better?  Can I involve them in the decision making processes such as product development, which results in tangible market offerings that people can point to and know they were a part of?   Indeed, I think we are now seeing modern management practices doing just this, and as a result, seeing improved productivity with employees and greater satisfaction and brand equity with customers; all because they are serving our fundamental human need to feel like we made a lasting difference on our world, and that we are not just some kind of puppet being controlled by some mystical god.

How do you deal with your own mortality?  Do you embrace it?  Do you ever think about it?  I realize it’s probably not healthy to be thinking constantly about our eventual death, but we should probably not pretend like it is not going to happen.  What do you think?   Leave a comment on this post.

the pivot: another entreprenuership lesson that’s relevant for business strategists and managers

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The articulate and insightful Eric Ries, coined the term “pivot”.   In the entreprenuership community, we hear this term a lot.  The definition and examples he provides in a SXSW interview  are just very well explained and insightful.    He says “A pivot is a change in strategy without a change in vision.”

I highly recommend the other videos in the PIVOT Series as well.

A most inspiring story and definition of “design”

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In his TedTalk, John Hockenberry, helps me understand why I so love design, feel passionately about it’s importance, and why I am so attracted to people–especially women–who have style…it is all about our intent.

Quotes from John’s Ted Talk:

“You’re right between horse and squirrel, John.”

“Design is, supplying intent.”

“Reality itself needed a designer.”

 

 

Paradoux of Choice

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In our quest to maximize freedom, we maximize choice, but is this maximization of choice leading to maximization of happiness?

In his TedTalk, Psychologist Barry Swartz helps me understand why I hate large restaurant menus.  He articulates nicely, ideas that strongly suggest maximizing choice does not maximize our happiness; rather it is in fact reducing our happiness!   I don’t think there is anything more important to ponder than things that directly affect our collective (he mentions the possibility of Pareto Inefficient economies) and individual  happiness, and I highly recommend watching the entire 19 minute TedTalk (below); but some of the major takeaways are below.

The cost of choices includes:

  • paralysis, the resulting procrastination, and the resulting consequences of not taking action create huge costs for individuals
  • the opportunity costs of not choosing another available choice, subtracts from the satisfaction of making the choice that I made
  • with so many choices, we expect one of those choices to be a perfect fit; and high expectations that prevent us from being presently surprised and “The key to happiness is low expectations!”

Some takeaways:

  • “Everything was better back when things were worse”
  • “…pretty confident we have long since passed the point [number of choices] where choices are adding to our welfare”

What can us business strategists learn from the recent implementation of radical data-driven defense strategies used by some very successful baseball managers.

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As baseball teams look for competitive advantage, they have come back to playing unconventional defenses as a means for attacking some players tendencies to hit the ball consistently to certain parts of the field.   Take for example, moving your 3rd baseman to shallow right field to take away line drives from a left-handed pull hitter (Devil Rays did this to NY Yankees hitter Mark Teshara).  This shift essentially created an extra outfielder and one less infielders.   The Toronto Blue Jays have started doing similar defensive maneuvers, but only after they saw Devil Rays manager, Joe Maddon, do it with such success.   As I think this MLB.com video correctly pointed out, a substantial amount of thought has to be invested in the design and implementation of this type of strategy, because the hitter’s tendency to hit balls to certain spots on the field is a function of where the pitcher locates his pitches.

Applications to the world of business strategy

But what has me thinking about all this is the possibility of parallels being from this story of baseball strategy to the world of business strategy.   How are businesses using data to exploit their customer preferences, or to better understand their competitor’s strategy; and ultimately creating competitive advantage through defensive strategy?

Then, my further question, is what is the answer to this data-driven and defensive approach to strategy design; and is the answer for business strategists similar to the answer for baseball strategists (i.e. baseball team managers and batters)?   That is, in baseball, the answer for the batter seems to be simply to focus only on what you can control and therefor focus on “going with” the pitch and hitting strikes as hard and as accurately as you can.   For the most part, a batter can’t directly control where the defense positions its defenders or where the pitcher will throw the ball, but he can control what pitches he swings at and how well he hits those pitches.   Does this idea extend to business?

In business, we generally think that good strategy takes into consideration what our competition can do, and if we tap into game theory, this expectation of what our competition will then do feeds the competition’s decision making process, and then this loops back to our decision, and the loop continues ad nauseam.    So here is my thought for us business strategists, should we–like the good  baseball batter–start thinking a little less about what our competition will do and instead focus more on what we can control?   For example, should we simply focus on: a) what are our visions for the future of our customer and distributor markets, and b) the unique capabilities we possess or will develop for executing on that vision.

This data-driven approach to managing a baseball team is an evolutionary change in baseball, perhaps due to the great accuracy and volume of data being collected today, as compared to earlier decades of the game.   Maddon and the Devil Ray’s are the vanguard of this data analysis movement in baseball, and I think it is worth studying him for how he crafts and implements his strategies, and also for the courage it takes to do something so radical.

Takeaways in business and innovation from an internet icon

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Marc Andreessen was recently recognized as a Wired Icon and pioneer of the internet.   Given his 20+ year history within the industry as an entrepreneur and now venture capitalist, his perspective has proven to be an insightful one; and so I read the transcript from his interview Chris Anderson.

At one point, Andreessen said something that I think is pretty powerful for innovators and business:

But making it [the internet] easier to use also made it more apparent how to use it, all the different things that people could do with it—which then made people want it more. And it’s also clear that we helped drive faster bandwidth: By creating the demand, we helped increase the supply.

This quote is dense.   It is a comment on multi-sided business models.   It is also a comment on the power of user-centered and service (since we cannot design experiences) design.

Another interesting strategic business lesson to learn came is Andreessen’s comment on why the LoudCloud business didn’t work:

Well, it worked beautifully right up to the point when all the startups went bankrupt, and then all our big clients decided they didn’t have to worry about competing with the startups anymore. After that, it went completely sideways.   ….

and the pivot:

So we just went back to basics and we said, OK, we couldn’t make it work as a service provider, but we think we can make it work as a software company, selling the back-end software to manage big networks of servers. We changed our name to Opsware. That ultimately worked, as a business.

On the importance of timing to market adoption and overall success of an innovative product/business:

Andreessen:  We see [social] playing out in retail, where ecommerce is becoming a group activity. Long before Ning, actually, in 1999, I invested in a company called Mobshop, which was Reed’s law applied to commerce, through group sales. It didn’t work back then. But 10 years later, I invested in Groupon, because I could see it was the same idea—finding, on the fly, a group of people who want the same product and using their massive numbers to command steep discounts. …

Anderson: What changed between 1999 and 2009 that made Groupon—and Facebook, and all these other profitable consumer Internet companies—possible?

Andreessen:A big part of it was broadband. Ironically, it was during the nuclear winter, from 2000 to 2005, that broadband happened. DSL got built out, cable modems got built out. So then you started to have 100, 200, 300 million people worldwide on broadband.

How society and culture changes influence success of innovations:

Andreessen: I often wonder if we should have built social into the browser from the start. The idea that you want to be connected with your friends, your social circle, the people you work with—we could have built that into Mosaic. But at the time, the culture on the Internet revolved around anonymity and pseudonyms.

On the power of optimism or the lack of cynicism, Andreessen comments that this is one of the reasons Zuckerberg and Andrew Mason were able to pursue their ideas (i.e. they weren’t burned by the previous dotcom bust).

On which industries are closest on the horizon to being improved by internet technologies:

Andreessen:  The next stops, I believe, are education, financial services, health care, and then ultimately government—the huge swaths of the economy that historically have not been addressable by technology, that haven’t been amenable to the entrance of Silicon Valley-style software companies. But increasingly I think they’re going to be.

On “software expressed as hardware”:

Andreessen:  … There’s a lot of hardware engineering that goes into it, but 90 percent of the intellectual property is software.  So we look at Lytro and we look at Jawbone and we see software expressed as hardware—highly specialized hardware that will be hard to clone.

“That feeling can create its own reality.”

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Two very curious psychological phenomena have been whirling around in my mind when I started to see how much of human behavior might be explained by them.     The first is the concept of “loss aversion”, which explains we often act in ways that minimize our expected losses rather than maximize our expected gains.   The second phenomena are self-fulfilling prophecies.  And interestingly, these may be related.

Loss aversion

Why is that one who loses $100 will lose more satisfaction than another person will gain satisfaction from a $100 windfall?   I might have some ideas that explain why we are this way, but simply being aware of this curious psychological phenomena is probably most important.  Look around and ask whether you think this phenomena can explain the human behavior, and I think you still start to see how well it explains a ton of behavior.   Loss aversion might explain why we do not ask for promotions if we fear that such being denied such a request might result in a damaged reputation within the firm.  Loss aversion might explain why we do not ask people on dates if our minds know subconsciously that we could end up feeling less confident about ourselves if the person says no; and this is even amidst the fact that our ego would probably grow by a far greater magnitude if  the person said yes.

Self-fulfilling prophecies

How often do we fear something happening, and then–out of this fear–act in such a way that then leads to that thing actually happening?!   Take for example, a person who fears that his/her lover is cheating on them.  This person then starts to act in a very insecure way.  The person starts to ask all kinds of weird questions, in weird ways, maybe starts acting weird too.  This then leads to the person’s lover becoming disenchanted by the person and then actually cheating or breaking off the relationship, which is what the person feared to begin with.  I find this incredibly ironic and, at first, very saddening.

Feelings and emotions make us humans interestingly complex, thinking creatures.  In a recent conversation/interview with Charlie Rose, Warren Buffet said:

That feeling can create its own reality.

The topic for Buffet and Rose’s conversation happened to be the U.S. consumer sentiment, and consumer’s faith and belief in the U.S. financial system.   Here the self-fulfilling prophecy to which Buffet was referring, would be the consumer’s fear that the banks were not trustworthy and that they would fail, which would cause many consumers to pull their money from the bank, which would then lead to the bank actually failing.   This is another example of how our feeling scared of something leads to behavior that ironically causes that thing to actually happen.    This realization had me pretty scared and saddened until I read an article that featured positive psychology ideas from Ryan Jacoby.   I then realized that self-fulfilling prophecies can work in the opposite manner as well. For example, if I believe that what I want to happen, will happen, I will behave and act according to this belief, thus leading to the desired thing actually happening.  Take the bank run story, for example.  If we believe that the banks will not fail, then we will leave our money in the bank, and we won’t cause a bank run, which would cause the banks to fail.  If we believe our lover is not cheating, we will act trusting, normal, and loving, and our lover will have no reason to seek companionship from someone else.

Can “loss aversion” explain economic recessions?

Citing the U.S.’s rapid recovery from 1930’s depression, Buffet says the American economic system works very well, but we will have have recessions (we have had ~15 of them since the Great Depression).  This got me thinking…Are our economic recessions also the result of human behavior and the psychological phenomenon whereby wealth is created and then because people fear the loss of this newly acquired wealth, they withdraw or reduce investments, which then slows down the economy because it inherently means taking money/capital out of the economic system?