The Ticking Trust Bomb

By | Economics, Psychology

Of all the principle forces that hold our world together the one that acts as the glue of society is called trust. Trust is what keeps relationships in tact by allowing people to live together, work together, feel safe and belong to a group. Trust in our leaders allows organizations and communities to flourish, while the absence of trust can cause fragmentation, conflict and war.

Confidence is the feeling or belief that one can have trust in or rely on someone or something. When trust deteriorates so does confidence, and it is more prevalent in our functioning society than people realise.

Think about the simple act of driving a car. The reason why we even get in one at all is because we have a high level of confidence that the car driving towards us on the same road, at 100km an hour, will not suddenly cross over into our lane and cause a deadly head on collision. 

Think of airplane travel. Everytime we decide to fly we have confidence in the ability of the pilot to get us from point A to point B safetly. Yet on 24 March 2015 the passengers of a Germanwings aircraft were deceived. The Airbus A320-211, crashed 100 km (62 mi; 54 nmi) north-west of Nice in the French Alps. All 144 passengers and six crew members were killed. It was Germanwings’ first fatal crash in the 18-year history of the company. The investigation determined that the crash was caused deliberately by the co-pilot, Andreas Lubitz, who had previously been treated for suicidal tendencies and declared “unfit to work” by his doctor. Lubitz kept this information from his employer and instead reported for duty. Shortly after reaching cruise altitude and while the captain was out of the cockpit, he locked the cockpit door and initiated a controlled descent that continued until the aircraft impacted a mountainside.

Following the incident, Lufthansa and Germanwings said that the crash has not had an impact on booking numbers and many analysts expected only a brief short-term hit and then demand to recover quickly. 

So as catastrophic as this event was, it did not deter millions of passengers from taking a flight that same day or any other following day. So this prompts the question, “How much deception and mistrust does a person have to endure before they lose confidence in that something or someone?” 

We find ourselves in a situation where trust seems to be deteriorating on a number of levels. There is lack of trust in the government, news organizations, international organizations, science, banks, business leaders, health organizations and the list goes on. In fact, seeding distrust among the masses has proven to be an effective weapon against others. But we can’t identify the tipping point.

The financial crisis of 2008 battered the level of trust of the population in their financial system. That loss of confidence created a run on many banks and spawned “Occupy Wall Street.” Eventually the leaders managed to regain a certain amount of trust for the financial system to start working again. The anger dissipated and the Occupy Wall Street movement disappeared. However, confidence in the system was weakened and that distrust and skepticism in our leaders to do what is in the best interest of the population still remains today. 

Seeing bankrupt company leaders receive enormous bonuses, or watch the Federal Reserve state how strong the economy is while justifying printing trillions of dollars to support it are contradictions that are not going unnoticed. In fact, it just slowly adds to the current level of distrust in these institutions.

According to Edelman’s Trust Barometer, 66% of those surveyed do not have confidence that, “Our current leaders will be able to successfully address our country’s challenges.” 

The Hutch ReportWe began by saying that trust and confidence are essentially what keeps our society glued together. What we don’t know is how much confidence and trust has to be lost before society becomes unglued. That lack of information makes the potential for disaster that much greater. 

I was speaking with a fund manager recently about the current actions of the Federal Reserve, bankers and our leaders in general.  I asked him what worried him most. He told me his biggest fear was the next potential crisis which promises to be the greatest crisis of all…..a crisis of confidence. 

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The Game of Financial Market Predictions

By | Finance, Psychology

As humans have evolved, the ability to predict events days, months or years into the future has never been relevant to survival. Rather, our DNA has been equipped with the fight or flight response. It is our quick ability to react to the event once it has happened that keeps us safe. 

Speaking on a panel at the 2018 NeuroLeadership Summit, social cognitive neuroscientist Kevin Ochsner said, “Our brains evolved to manage the needs of the now and of the not-too-distant future—your immediate environment, and short-term goals for food, water, shelter, and child-rearing.”

Although the world has evolved, humans still carry the same neural architecture as our early ancestors, which means that our brains are still inept at predicting future events. The closest we get is our ability at using sensory data to foresee events in the immediate future, as in microseconds. This enables us to predict the trajectory of a fast-moving baseball which enables us to catch it. 

In his fascinating documentary series, “The Brain”, Stanford Neuroscientist Dr. David Eagleman explains how in practice predictability is impossible. He demonstrates this by dropping a single ping pong ball into a container of one hundred and fifty ping pong balls. It is possible to correctly identify where the ball will land but as it sets off a chain reaction of movement with the other balls the situation becomes more complex. He states, “Any error in the initial prediction, no matter how small, becomes magnified as balls collide and bounce off the sides and trigger other balls. Soon it becomes completely impossible to make any kind of prediction about how the balls will end up. The balls have no choice in the direction they move. They have no freedom to do it differently, and yet the system is completely impossible to predict.”

A human’s thoughts, feelings and decisions emerge from the innumerable interactions in the brain. In comparison to the activity of one hundred and fifty ping pong balls, the brain has billions of times more interaction every second and never stops during a lifetime. In addition, each individual’s brain is embedded in a world of other people’s brains. Dr. Eagleman goes on to say, “the neurons of every human on the planet fire, interact and influence each other creating a system of unimaginable complexity. This means that even though brains follow predictable rules, in practice, it will always be impossible to know exactly where any of us are going.”

Nassim Taleb developed a line of argument throughout his previous books, Fooled by Randomness, The Black Swan and Antifragile,  that the defining characteristic of future change is that it is impossible, and pointless, to try to predict it. Instead,  he argues, it is essential to make peace with uncertainty, randomness and volatility. Those who do not — who insist not only on trying to predict the future, but also on somehow trying to manage it — he disparagingly calls “fragilistas.”  

So if predictions are impossible, what makes such a large number of financial professionals believe they have the ability to identify, as in Dr. Eagleman’s demonstration, the correct outcome of the millions of interactions that are set off from the chain reaction of one event? 

The human brain values certainty in a very similar manner to how it values food, sex, and social connection. Certainty offers a perceived control over the environment that is in itself inherently rewarding, the brain treats uncertainty, and the inability to predict the future, as a source of deep discomfort.

This is essentially why viewers continue to tune into their favorite financial tv personalities, in the hopes that they will describe the future and give them a greater sense of certainty. The main certainty on behalf of the financial tv personalities is that regardless of their faulty predictions, they are protected by a number of disclaimers at the end of the show that viewers tend to disregard.

The Financial Times looked at the number of countries that the IMF expected to be in recession for every year since 1991 and compared it with the number of economies that turned out to have actually contracted. Over the last 27 years, the IMF predicted every October that an average of five economies will contract the following year. In practice, an average of 26 have contracted. The difficulty in getting forecasts right is not unique to the IMF. “All macroeconomic forecasters are poor at predicting downturns,” David Turner, head of the economics department at the OECD told the Financial Times.

The past is littered with a multitude of failed predictions over the years made by economists, financial analysts, TV financial personalities, or the Federal Reserve. 

Who can forget on March 11, 2008, Mad Money host Jim Cramer told a viewer who wrote into his show, “Bear Stearns was fine!” right before the stock absolutely collapsed. The stock was trading at $62 per share. Just 5 days later, the firm was picked up by JPMorgan Chase for $2 per share. Yet, Jim Cramer is still on CNBC shelling out predictions daily to a mass of viewers eager for some kind of certainty.  

In the past, there have been correct predictions. Although with no real timing accuracy, they can be considered a lucky guess, since none have been able to replicate the predictions that made them famous.

Elaine Garzarelli became a start with her prediction of the 1987 crash. Since then, her record was mixed. For instance, on July 23, 1996, she told clients that US stocks could fall 15% to 20% from peaks reached earlier that summer. The Dow Jones industrial average closed that day at 5,346.55, and had risen 45% by Nov 1997.

Elaine Garzarelli

Meredith Whitney catapulted to fame after her prescient October 2007 report on Citigroup Inc. and put this previously unknown analyst on the cover of Fortune magazine. Following shortly after her ascent to prediction stardom, she predicted an “as yet unrealised” meltdown in municipal bonds in a 2010 interview on “60 Minutes.” A short-lived hedge fund followed, but the fund lost money and closed in 2015 amid a legal dispute with its anchor investor.

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Meredith Whitney

Paul Tudor Jones also called the 1987 crash, yet last year predicted that the US 10-year Treasury yield would rise to a “conservative” 3.75 percent by the end of 2018. The result? It closed the year at 2.43 percent and has since dropped to 1.73 percent. However, the ability to make predictions should not be confused with one’s ability to react and trade off of events. It is the trading ability of PTJ, his ability to react to situations, and trade accordingly that has made him wealthy.

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Paul Tudor Jones 1987

Bob Johansen, author of Leaders Make the Future: Ten New Leadership Skills for an Uncertain World, states that the first step is to strive not for certainty, but for clarity. Given that the future is inherently unpredictable, we can never be certain about what the future will bring. 

If we really had the ability to forecast future events, there would be no such thing as an unforeseen crisis!

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Focus on the Positive or Negative?

By | Psychology

Telling someone to focus on the negative may sound strange and counter to what we are used to hearing, particularly from a positive mindset self help industry that generates revenues of $10 Billion a year.  However, the statement does have some merit. The main distinction to make is the difference between focusing on the negative and “dwelling” on the negative. 

Our minds produce negative thoughts for good reason and are often necessary for our well-being and mental health. Negative thoughts are meant to alert us to the things that need attention. Focusing on these negative thoughts centers our attention on things that we need to adjust or change. 

The survival value of negative thoughts and emotions help explain why suppressing them is so fruitless and in fact can produce adverse effects. The act of suppressing thoughts and feelings can be bad for our physical health and cause stress. According to psychotherapist Tori Rodriguez, suppressing thoughts means we cannot accurately evaluate life’s experiences. If we don’t allow ourselves the lows, then the satisfaction from the highs becomes lessened and “attempting to suppress thoughts can backfire and even diminish our sense of contentment”.

So does this mean stop focusing so much on the positive? Not at all. We need to focus on the positives when it is the most useful thing to do, as we need to place our focus on the negative when necessary. Negative thinking isn’t superior to positive thinking, but neither is positive thinking the panacea for all your ills. Sometimes what’s required is a dose of reality. And it’s the negative thinkers, the ones who are perceived as meddlesome and troublesome and annoying, that often provide the cure. 

Negative thoughts are often a means of protection, reflection and learning. Julie Norem wrote in “The Power of Negative Thinking” that negative thinking has the ability to transform anxiety into action.” By imagining the worst-case scenario, defensive pessimists motivate themselves to prepare more and try harder.”

It is therefore very useful for us to focus on negative information you would never be able to learn from your mistakes. Concentrating on the process and not the outcome is one way to focus on the negative while avoiding dwelling on it. Remember that failure is necessary. Embrace the idea of failure as a learning barometer, focus on the negatives, make adjustments and you can move on.  

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By | Education, Psychology

We seem to have an ever increasing amount of experts online which begs the question, “What classifies a person as an expert?” The Oxford Dictionary defines expert as “A person who is very knowledgeable about or skilful in a particular area.” However, the big challenge with this definition is quantifying “very knowledgable”. According to Psychology Today, “it turns out surprisingly difficult to provide a formal definition that everybody can agree with.  There are in fact many definitions, but most are unsatisfactory.” The lack of a reliable measure of expertise has enabled a large number of people to consider themselves experts in their chosen field. We call them “self-proclaimed” experts. 

In today’s digital economy there are literally hundreds of thousands of pieces of user-generated content published every minute. It is inexpensive and quick to create a video, write an article or produce a podcast. With the evolution of social media that number continues to grow exponentially. It is believed that 90% of the worlds data has been created in just the past 2 years.

With so much content and less time to filter through it all, people are overwhelmingly seeking out “experts” and high impact content to help them make purchase decisions, investment decisions, career choices, travel choices or even relationship decisions. The label of “expert” is powerful and weilds influence. In an  article in Forbes Magazine a study performed by Nielsen showed that expert content was 88% more effective in creating brand lift than a brands’ own content. It was also learned that expert content was the most influential at every point in the new buyer’s journey. However, more often than not, people are ignoring the fact that not everyone that writes articles, makes videos or produces podcasts is an expert.

The average content consumer has the challenge of determining what is real from fake, correct from false or simply what content can be trusted. They need to determine for themselves who is an expert versus who is just an online user creating content. But does that get determined at the site level or is there some sort of advanced criteria that you can run someone against to determine whether or not they are really credible in a particular area and moreover if they are an expert?

Financial television personalities such as Mad Money’s Jim Cramer provide investment advice on a daily basis. The efforts previously made to actually quantify the performance of his picks, here, and here, found that the results have been less than flattering. It is for this reason that most of these financial programs will flash a disclaimer at the end, which essentially removes them from liabilites that may arise from investors losing money following his expert recommendations.

“All opinions expressed by Jim Cramer on this website and on the show are solely Cramer’s opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL or their parent company or affiliates, and may have been previously disseminated by Cramer on television, radio, internet or another medium. You should not treat any opinion expressed by Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer’s opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Cramer, CNBC, its affiliates and/or subsidiaries are not under any obligation to update or correct any information provided on this website. Cramer’s statements and opinions are subject to change without notice. No part of Cramer’s compensation from CNBC is related to the specific opinions he expresses.”

One explanation of our will to follow these experts is the Authority bias. Authority bias is the tendency to attribute greater accuracy to the opinion of an authority figure (unrelated to its content) and be more influenced by that opinion. This concept is considered one of the so-called social cognitive biases or collective cognitive biases. 

Our digitally driven world has led us to become less patient and lazy. Therefore the deference to authority can occur in an unconscious fashion as a kind of decision-making short cut. This is not to say don’t follow experts, just don’t be teased by the term expert. There are obvious domains where experts are not just the product of a society exercise in labeling (just try conducting a brain operation, teaching a class in Physics or compete in the Olympics). 

While there is no 100% foolproof way to tell between an expert and their “self-proclaimed” counterparts, there are some simple things readers can do if they are seeking to assure that their expert content really comes from an expert. Consider the source, check the facts,  and research the author.

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The Top 10

By | Psychology

If you are like most people these days then you probably have lost your sense of discovery and prefer to rely on the opinions of others as you roam the endless roads of social media. That is why Top 10 lists of everything from chocolates to music attract so many readers. It is essentially because they feel that somehow these cyber strangers are more qualified to provide opinions than they are.

The previous statement is of course false.  The truth is everybody has an opinion about what they like and what they prefer. The great jazz pianist Bill Evans, when speaking about jazz as an art form, disagreed with the premise that the neophytes opinion was less valid than the jazz musician who knew all the ins and outs of the art form. He believed that one could even say that the neophyte’s opinion was even more valid because he was listening to the music without being weighed down by all the other analytical additional knowledge flowing around the musician’s head. 

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You can argue the point that the more you experience something the higher your point of reference becomes, which would make you more critical of something, but you can’t tell somebody that their particular opinion of a piece of music is wrong when they are speaking from their personal point of reference. 

This is the issue about creating Top 10 or Top 100 lists about things that are subjective to the individual. Even if you have 99 people all preferring one piece of music to another, but one person in the bunch does not like it for whatever reason, it can’t be quantified. Compare this example with comparing the strength of different pieces of material. You can state the Top 5 strongest materials on earth because their strengths can be quantified. This objectivity makes for a valid comparison between them. 

So why do people feel the need to latch on to somebody else’s list of the greatest Rock Groups or greatest whatever? Often the answer is certainty. Rather than have to listen to 100 albums and make the distinction themselves, they take the list and discover the best in hopes of saving time or having to slave through something painful. They become more comfortable in the fact that they will be listening to what they would have chosen anyway. 

In addition to wanting to feel certain about something, there are those that exhibit different cognitive biases that affect their opinions. An example of this is the courtesy bias – the tendency to give an opinion that is more socially correct than one’s true opinion, so as to avoid offending anyone. Therefore, you can imagine how many of these Top 5, 10 or 50 lists are based on nothing more than wanting to appease the reader. Pick out the most widely held views about something in order not to offend anybody or look bad themselves. 

There is also the authority bias – the tendency to weigh the opinion of an authority figure more heavily. A good example of authority bias is the recent explosion of bloggers writing about their world travels. They present themselves as the best source of information about what to see or where to visit. I happened to come across an article by one of these well known bloggers that described why he would never visit Vietnam again. He proceeded to express his distain for the people he met and how he was ripped off etc. Anybody following his advice would have sabotaged an opportunity to experience it for themselves. I did have the opportunity to experience a visit to Vietnam not too long after I came across that article. My experience was vastly different. It was one of the most fascinating countries I have visited. 

Not everybody is comfortable giving their true opinion of something, so they prefer to accept the opinion of others. This is called the “Bandwagon effect” – The chance of people adopting certain ideas or making decisions increases when more other people have made these same adaptations or choices. Underlying mechanisms of this cognitive bias are people’s need to conform to a group norm, and the use of other people’s choices as information for making your own choices.

Subjectivity refers to personal perspectives, feelings, or opinions entering the decision making process. Objectivity refers to the elimination of subjective perspectives and a process that is purely based on hard facts.

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Next time you take a look at a Top 10 list, pay attention to how it is worded. Is it “The Top 10 Places to Visit on Earth,” or is it “My Top 10 list of places,” or something similar. Because there are so many of these lists now produced and many of them have caused disagreements and agressive feedback, as you would expect them to. This is what happens when dealing with subjectivity. You are probably more likely to see the addition of the phrase, “as selected by our readers,” or based on votes from “critics” or “industry experts” which falls into the authority bias category. 

We previously wrote about how our sense of discovery has been lost. Too many people are now relying on a social media stranger’s opinion, or even Google’s opinion. Do yourself a favour and just enjoy the process of discovery. At the least, create your own Top 10 things to eat, to visit, to do, to listen to. After all, your opinion is the one that matters most. As you expand your horizons and make new discoveries you will most likely find that all those list slowly change over the years to reflect your most recent experiences. 

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Energy – Social media’s missing link

By | Psychology, Technology

Have you ever walked into a room of a small group of people and felt a blast of negative energy?  Everything looks normal enough but you have an uneasy feeling. Later you find that a couple among the group have been arguing. You were not aware of the reason at the time you entered but you felt the presence of negative energy well before you even knew what was happening.

Equally, you may have met somebody who affects you in a positive way. They are fun to be around. They tend to make anybody that comes in contact with them feel good. They have a way of emitting positive energy. We have seen that by adapting a lifestyle that leads to emotional and physiological balance you may have a positive influence on all others around you. If not, the opposite becomes true.

So how does this apply to a world where people have become accustomed to communicating with each other by distance, through smartphones and texting? If we can no longer sense the presence of the person we are speaking with, are we truly connected? Mark Zuckerberg wrote in 2017 for the first Facebook Community Summit, “For the past 10 years, our mission has been to make the world more open and connected. We will always work to give people a voice and help us stay connected, but now we will do even more. Today, we’re expanding our mission to set our course for the next 10 years. The idea for our new mission is: Bring the world closer together.”

This prompts the question, “Does a world connected by smartphones, web interfaces, false personas and anonymity constitute a world that is more open?”

Zuckerberg continues, “I always believed people are basically good. As I’ve traveled around, I’ve met all kinds of people from regular folks to heads of state, and I’ve found they almost all genuinely care about helping people.” Ironically, Zuckerberg opted to travel and meet these “regular folk” in person, when he could have quite easily struck up a conversation with them via their facebook page.

He goes on to say, “We all get meaning from our communities. Whether they’re churches, sports teams, or neighborhood groups, they give us the strength to expand our horizons and care about broader issues. Studies have proven the more connected we are, the happier we feel and the healthier we are. People who go to church are more likely to volunteer and give to charity — not just because they’re religious, but because they are part of a community.”

The groups and communities he is describing are those that meet up personally to share thoughts and ideas. Meetings where they share the experiences together in the same location as opposed to sharing it through a text message. They are sharing each other’s company. They generate energy and nurture others as others generate energy and nurture them.

Ironically, what some may see as a connected world, others see as a world of human’s becoming more distant and isolated. Communicating with others via technology removes that energy that we all share when we speak with someone face to face. You do not get a sense of a person’s energy through a text message or tweet. You are not able to read the body language. As human’s, we communicate with the tone of our voice, our body language, our eyes etc. We communicate on many different levels.

Some call this intuition yet others believe that we, as humans, create energy and have the ability to transmit that energy, be it negative or positive. Any thought, intention or action triggers an emotion which gives rise to this energy. Our thoughts and memories are essentially energy.

Energy released by an angry individual is shared with all people including plants, animals, and objects that he or she comes in contact with. This is how the negative or positive energy gets passed on from one person to another. You can feel that loss of energy yourself when you fall ill. Negative energy robs you from your vitality and wellbeing, while positive energy rejuvenates, and keeps you in a state of joy, happiness and good health.

Social media claims to be connecting people but to what extent? Isn’t it a purely superficial connection void of any real feeling? Social media has its place but nothing is a replacement for human contact. Human contact and energy seems to be the missing link in our newly “connected world.”

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Learning from Google’s Mistakes

By | Education, Psychology

Everybody uses Google’s search engine daily, however, in addition to using their tools people should be learning from what Google does as a company, especially when it comes to failure.

When kids are learning to speak, walk, or do most of the actions we take for granted as adults, they are never impeded by the fact that they have previously failed their attempts. They just keep modifying their actions until they succeed.  So why and when does this change?  At what age do we suddenly have the realization that if we don’t do things perfect, we are less of a person?

You never hear a parent say to a baby as it is learning to walk, “You fell again, what’s the problem with you?” Unfortunately, at some moment this behaviour changes. You can see it on thousands of baseball little league fields, hockey rinks, basketball courts, singing contest, dancing contests, etc. A boy drops the ball and suddenly hears it from his coach, his teammates or some stranger in the stand yelling, “Bench that kid!” This instills the thought that we are not allowed to make a mistake.  That is a lot of pressure to put on anyone.

We don’t consider this kind of behaviour as the norm because we know that there is a large amount of support from parents and educators. There are a number of companies and researchers looking to improve and discover new approaches to learning and teaching. However, the desire to win at all cost does often override the desire to accept one’s mistakes, embrace them and learn from them.

The problem is not failure in itself; it is how people perceive failure. It is how we are conditioned to deal with failure.  Just the sound of the word seems to evoke the connotation of something less than whole, something weak or bad. Of course it doesn’t feel great to be performing in front of someone and make a mistake.  Somehow it makes us feel inferior or less than perfect. But therein lies the negative perception. Quite often that fear of failure works negatively on our nervous system, which in turn decreases our chances of performing at a peak level.

If one can change their perception of failure or their definition of what it means to fail then there is probably a greater chance that they improve more rapidly and their chance of success in whatever endeavour they choose. In addition, they enjoy the process.

The classic example of someone’s positive perception of failure is that of Thomas Edison. When asked how he dealt with so many failures in trying to find the right filament for the light bulb, he said, “I have not failed. I’ve just found 10,000 ways that won’t work.”

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UNITED STATES – CIRCA 1911: Inventor and physicist Thomas Alva Edison (1847 – 1931) looking at a lightbulb (Photo by Nathan Lazarnick/George Eastman House/Getty Images)

Interestingly enough, the people who can embrace failure and take risks invent things; dare to do what others don’t because they are focused on the road to success in front of them. They don’t concern themselves with the failures they have left behind because in their minds it is just a part of the learning process. These failures don’t represent them.  Instead they are further clues on the road to getting to where they want.

Failure does not mean taking blind risks.  Failure is the result of taking a calculated risk.  It is that percentage of risk that results in a potential failure.  You analyze that result, make some changes and reduce your risk.  You do it again until your risk is eliminated and you succeed. The great Canadian Hockey player, Wayne Gretzky once said, “You miss 100% of the shots you never take”. If you take yourself out of the game, you will never have a chance at winning.

In business the word failure has become synonymous with Silicon Valley, mainly because of the startup and risk taking culture it has developed. However, this is looking at failure on a larger scale. It happens on a much smaller scale daily.  It could be screwing up a dinner, getting a crossword puzzle wrong.  Giving the wrong answer to a question at a dinner party (maybe even the same one where the dinner was screwed up). People are bothered by these failures because it seems to be a reminder that they are somehow not perfect.

Perfection is a figment of the imagination (see our post).  Believing that perfection exists means believing that once achieved you cease to grow or learn.  Our lives are a journey of constant discovery and improvement. To set yourself the illusive goal of perfection, you set yourself up for a string of never ending disappointments.

There have been many strong statements regarding failure made by well-known personalities over the years. They should be used as a great source of motivation towards changing our own perceptions on failure.

“The only real mistake is the one from which we learn nothing.” – Henry Ford

“Success is stumbling from failure to failure with no loss of enthusiasm.” – Winston Churchill

“Every adversity, every failure, every heartache carries with it the seed of an equal or greater benefit.” – Napoleon Hill

“You build on failure. You use it as a stepping-stone. Close the door on the past. You don’t try to forget the mistakes, but you don’t dwell on it. You don’t let it have any of your energy, or any of your time, or any of your space.” – Johnny Cash

“Failure is so important. We speak about success all the time. It is the ability to resist failure or use failure that often leads to greater success. I’ve met people who don’t want to try for fear of failing.” – J. K.  Rowling

“It’s fine to celebrate success but it is more important to heed the lessons of failure.”-Bill Gates

“Mistakes are the portals of discovery.”-James Joyce

The Hutch ReportSo what does all this have to do with Google? Google has to be considered an incredible success on so many levels however they have not achieved it by accident.  Google is one of the few companies that actually see making mistakes as a portal to learning and discovery. They have gone so far as to create a process, which they call a “Postmortem.” A postmortem is the process their team undertakes to reflect on what they learned from their most significant undesirable events. Incidents may happen, but not all require a postmortem. Therefore, the first important step is to 1. Identify the most important problems.

Once they have identified the problem their next step is 2. Work together to create a written record for what happened, why, its impact, how the issue was mitigated or resolved, and what to do to prevent the incident from recurring. They ask themselves questions such as; what went well, what didn’t go well, where did we get lucky, and what can we do differently next time?

Lastly, Google has understood that being blamed for an incident will only promote self-pity and become very unproductive. So they made a conscious decision to apply step 3. Promote growth, not blame. By removing blame from a postmortem, team members feel a greater psychological sense of safety. This enables them to escalate issues without fear. By assuring team members that they will not be punished for the mistakes they made, a greater trust is built. These three steps reposition failure as an opportunity for growth and development rather than as a setback.

These are steps that anybody can apply to their own daily lives. Learn from Google’s mistakes and look at every failure as a chance to discover something new, learn something, or improve something and you will in turn make yourself much happier.

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The Russians Did It! (or did they)?

By | Politics, Psychology

The Russians completely destabilized the US political system and skewed the vote of the American public in favour of Donald Trump. They used platforms such as Facebook and Twitter, who were also implicated in this massive fraud. How could the US be intimidated and coerced so easily? Actually the question should be how much of this story is made up and how much is truthful? A question that, unfortunately, we are unlikely to find the answer to. 

The definition of the word propaganda is — information, especially of a biased or misleading nature, used to promote a political cause or point of view. Propaganda is a means of influencing people. Its principle goal is to persuade others to accept certain beliefs and ideas. Propaganda in modern times is now a more potent force than it has ever been. The dissemination of information via social media and the internet happens at warp speed and spreads like a virus. In addition to the methods of distribution, propaganda makes use of a number of tactics, many times used in tandem in order to gain the greatest impact. Here are a few examples:

Fear – A large number of psychological studies have found that humans will do more to avoid pain than they will to gain pleasure. We are hard wire with a fight or flight response which keeps us on our toes when fear is involved. It is therefore a potent propaganda technique. Just turn on the news and you will see the deliberate use of extreme ideas and symbols for the purpose of swaying opinion by causing deep, and at times irrational, fear.

Repetition – The classic brainwashing technique is to repeat an idea, word, or image over and over and over again until it becomes imprinted on the objects mind. When politicians focus on staying “on message,” meaning they repeat the same buzzwords and reinforce the same ideas in multiple public appearances and statements, they are using this technique. The media makes use of this technique. When Howard Dean was running for president he made a speech in Iowa where he yelled out “Yee Ha” to rally the crowd. This caused the death of his candidacy, as the media jumped on it and declared it unpresidential conduct. How did they persuade the public to accept this belief?  According to the Hotline, a Washington-based newsletter, cable and broadcast news networks aired Dean’s Iowa exclamation 633 times (and that doesn’t include local news or talk shows in the four days after it was made).

The Common Folk – With the recent rise of populism in the US and Europe, appealing to the common folk has become a propaganda technique. The goal is to make viewers feel that they directly connect and can relate to the message or meaning of the propaganda. Mark Zuckerberg went on a cross-country tour to meet blue-collar folks and soccer moms. This of course began to fuel rumours that he was considering an eventual run for president. It was noted that Obama said the word “folks” at least 348 times during presidential news conferences.

The Band Wagon – We previously wrote about this (here) in reference to the Bitcoin explosion. The interest in cryptocurrencies and Bitcoin has fuelled the use of propaganda from both directions, for and against its use. The idea here is that everybody is adopting it so you should too. Often the word “we” is used heavily to imply that everyone is in a situation or group together.

Demonizing – By characterizing an enemy or opponent as evil, vile, or dangerous, propaganda can appeal to visceral feelings of fear, disgust, and repulsion. Exaggeration is required, and this technique is particularly necessary for any political “smear campaign.” Donald Trump used this technique effectively in his presidential campaign. He implanted the idea of a dangerous, deep state and evil Hillary Clinton in the minds of many voters. How could you tell? It was so effective that Clinton became recognized as “Crooked Hillary” by his voting base. 

Paternalism – An individual’s need to feel protected and watched over is a perfect target for propaganda. For this reason, many governments will employ imagery and symbolism that evokes a sense of paternalism. The emphasis on a strong, fatherly authority is appealing to many consuming propaganda, making this technique extremely powerful in times of distress or crisis, such as in the use of Uncle Sam in military propaganda.

Victorious – Everyone wants to feel like a winner.  If a piece of propaganda can paint a candidate or group’s victory as certain and inevitable, then the viewer will want to join the group. This is why you will often hear a plea to “join us now,” before it’s too late. 

The Lie – This strategy requires an entire body of propaganda, usually across multiple mediums, and focuses on stirring up strong emotion by retelling or reorienting a major story or event to change people’s perception of the event. This technique ties together with other techniques like fear mongering, demonizing, and repetition. This is what we started the article with, “The Russian Conspiracy.” This story has been presented in loop from all angles, by a number of distribution methods for well over 18 months. Have you encountered it? Have you been influenced by the propaganda? Whether you accept it or not, you have certainly been coerced into forming an opinion based on information that may or may not be fact, without even being aware of doing it. Such is the power of propaganda.

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Discovery Lost – 4 Ways to Get It Back

By | Psychology, Technology

Have you lost your sense of discovery? The number of developments and innovations that have taken place in recent years have been no less than stunning. I don’t think even the true initial believers could have imagined how a platform such as the internet would come to engulf our lives and make us so dependent on the information that it encapsulates. It seems to be the answer we have to every question. It is the arbitrator for every dinner table disagreement. It is our idea generator for the meal we want to cook for our dinner party. It is the purveyor of books we should read, restaurants we should eat at and locations we should visit.

The development of smart phone technology has extended that convenience one step further. Now, instead of having to slip into a cyber café to use a computer or wait till we are home to check our own, we can now have access to all this information whenever and wherever we are. This provides added capabilities such as geolocation applications whereby we can check to see if there is something within 100 feet of where we are standing that merits our attention. Are the burgers good at that place on the corner? Do they serve a good espresso over there? I have an hour to burn, is there an interesting museum to visit nearby?

The speed of the dissemination of this information has also vastly increased, and only seems to be getting faster. This allows people to spread the word to their tribes in a matter of seconds. We saw recently one of the more negative aspects of this advancement where an alert went out in Hawaii about an incoming missile. Around 8:07 a.m. on January 13, 2018, an errant alert went out to scores of Hawaii residents and tourists on their cellphones: “BALLISTIC MISSILE THREAT INBOUND TO HAWAII. SEEK IMMEDIATE SHELTER. THIS IS NOT A DRILL.” The spread of the message was extremely quick and effective as it sent scores of residents and travellers into a panic. There was only one problem, the message was false.

The combination of a worldwide internet, geolocation tracking and the speed at which we can transmit information, has created an arena for just about anybody to voice their opinion, on just about anything to the world, wherever they happen to be located at that moment in time . This has now created tribes of self-declared independent restaurant connoisseurs, historians, travel experts and curators of lists. The 10 best cafés, The 10 best cities to visit, What to do when you are in Paris, The best hotels for couples under 40, and my personal favourite, 20 hidden beaches away from the tourist crowd!

The blogs curating this kind of content have flourished over the years and there is a principle reason for their success. People look for certainty in their lives. When they go to a restaurant they want to know that they are assured of receiving something of equal or better value compared to what they have to pay. They want the promise that they have tasted the best cappuccino that can be found in all of Italy. If they go to a hotel they want to know that others who have been there previously have enjoyed it. This provides them more confidence that they won’t expect any unfortunate surprises. If they have traveled a long way, they want the guarantee that they have experienced the best that the location has to offer. The best way people have found to gain this certainty is to follow in the footsteps of someone else’s experience. So they go online and a quick Google search provides them with no lack of self proclaimed experts on where to go, what to see and what to eat.

In addition to the endless number of self-proclaimed experts, there is artificial intelligence. These are the algorithms that analyze everything you search for on the internet — music, art, articles, travel locations, restaurants or cafés. If you like rock music, the algorithm will feed you back a bunch of rock music. If you have been looking for Indian food, the algorithm will propose even more Indian food. Basing recommendations on a set of personal preferences sets up an endless cycle loop that is not so easy to break free from, unless you change those preferences yourself, at which point there is no discovery.

This is the point where we find discovery is lost. Discovery used to be a serendipitous event. We may have been invited to a friend’s home while his parents were playing their favourite Bach concerto. Never having heard one before made you want to go out and discover more despite the fact that you never listened to classical music before. You may have been invited out to dinner to a Greek restaurant where you discovered Souvlaki. This experience made you want to look more into Greek cooking. These are personal discoveries that were not based on any previous bias. They were pure discovery, which made them all the more appealing and memorable.

Now we have so called travel bloggers that will go out and comb every inch of a city to put up on their blog. We are not even sure if they have been to the sites they recommend. We don’t know under what conditions. They may have spent only 10 minutes in the place, long enough to grab a coffee and take a few pictures. The drawback to following someone else’s opinion on a location is that it is their opinion and not yours. Their personality may have a lot to do with their choices. If they are extroverts and you are an introvert, their choices will most likely differ from yours.

There’ll always be serendipity involved in discovery – Jeff Bezos

As an example, I happened to read an article on Vietnam by one of the most widely followed and successful travel bloggers. It was one destination that he vowed never to return to. As he stated, “The simple answer is that no one ever wants to return to a place where they felt they were treated poorly. When I was in Vietnam, I was constantly hassled, overcharged, ripped off, and treated badly by the locals.” This was his experience and maybe his personality brought out the worst in people, we can’t be sure. There are millions of people in Vietnam and to judge them all because of a few bad apples is not a fair assessment of the country. I disregarded the blogger’s experience and advice not to go to Vietnam. My experience was quite the contrary. I met some amazing people, discovered some incredible culinary dishes, and saw some stunning scenery. The best part was just walking around the city, dropping in on a café here or there and speaking with the locals — who were incredibly hospitable. That was my experience.

To travel is to take a journey into yourself – Danny Kaye

Not every discovery works out for the best, but it is pure discovery. There is something special about walking down a little back street in Rome and stepping into a café filled with locals. You feel like it is a hidden gem that only you know about. Being excited about visiting Rome for the first time just adds to the emotion and adventure. Following in the footsteps of somebody else is just that. Living someone else’s experience. Doing this you rob yourself of pure discovery. You deprive yourself of a very personal experience.

“The real voyage of discovery consists not in seeking new landscapes but in having new eyes.” — French writer Marcel Proust

The Hutch ReportThe world changes. Cities change. The fantastic time you had at a little jazz club in Greenwich Village in New York is a memory you will have forever. What makes it all the more valuable is that the jazz club is not there anymore. Nobody else will ever experience what you did because it was unique. It was a discovery at the right time.

Recommendations are fine. We all ask for recommendations which can save us time.  We are not saying that all lists are bad. If you are visiting a city for a short duration and you want to know where some of the best museums are, a list can come in handy. So choose one, go and get lost and discover what they have to offer. See it through your eyes and not somebody else’s.

Here are a few “ideas” on how to get discovery back:

Embrace uncertainty

There is a comfort in always having the same thing. Woody Allen was known for going to the same restaurant in New York and ordering the exact same meal for years. If this is who you are then fine, but if you want to break free then embrace uncertainty. Try something different.

Put away the map for a while

Don’t always feel the need to follow the map when you are in a different city. I am not saying go and get lost, but just find a quarter and go discover it. See where your intuition takes you. Take the road less traveled. I was in Istanbul one time with a few friends and saw a man crossing the street with a tray and 4 small glasses of Turkish tea. He turned into a very narrow alley way. We were intrigued so we followed him to see where the tea room was located. It turned out that it was not a tea room per se but his little business which consisted of a small bench and a hole in the wall with his material to make the Turkish tea. He gave us a sign to come and he offered us a cup of tea. We had a good laugh speaking to him through a Turkish dictionary and his broken english. Somehow the experience made the tea taste that much better. It was pure serendipity.

Speak with people face to face

What a novel thing to do in our day and age. It feels like we have lost one to one discussions with everybody peering into their smart phones. Get out and ask your friends what they have been listening to. Who are their favourite groups. You may know someone with eclectic tastes that will lead you to new forms of music you may have never discovered otherwise. I met someone from Brazil a few years ago. They gave me a cd of a Brazilian singer I had never heard of. I loved it. It sent me on a journey of discovery of forms of Brazilian music I never knew existed.

Read Books

It seems like everyone reads articles on the net and have become too lazy to read books. Articles have existed for years in magazines and other publications and can be very insightful. Books, on the other hand delve deep into the subject matter. Books are an incredible source of information. Whenever I read a book I discover leads to other interesting books to read. Years ago, I was reading a biography on a musician that was discussing his love of philosophy. I never expected that this book would lead me into a study of philosophy and some of the world’s great thinkers. It was a wonderful discovery that continues today. Check out our list of “Books You Should Read.”

The founders of The Hutch Report are originally from North America. A sense of adventure and thirst for discovery eventually brought us to live in Switzerland. From here, we have traveled extensively throughout Europe and the rest of the world. We have a fascination with all the moving pieces that make up what is now known as “The New Economy.” We dig into all these new moving parts and analyze how they affect society and our lives directly. Our experience and findings, hopefully provide insights, ideas and tools for our readers to profit from.

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WMD – Words of Mass Destruction

By | Politics, Psychology, Technology

On April 23, 2013, I was sitting at my desk watching the stock markets on my screen. I happened to be in a chat room with a number of other traders at that moment. Some were discussing their current Apple trade, others were concentrating on some options, and others just looking for their daily setups for their next trade.

I happened to be looking over at my twitter feed, when suddenly I saw this tweet show up from the Associated Press (This screen grab was taken by somebody else at the time before the twitter account was blocked and the tweet deleted).

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My first reaction was to tell the others. “Hey, did you guys see that a bomb just went off at the White House?” Just as the words came out of my mouth, the news began to spread like wild fire as more people became aware of the tweet. At that instance the stock market took an instant nosedive. Everybody started to scour all the other news sources to see if they could verify what we saw.

Just as quickly, the market reversed course and made a recovery. The Associated Press came out and said that the message was the work of a hacked @AP account. The account was immediately suspended by Twitter. Regardless, that tweet of an explosion at the White House was enough to tank the markets as much as 1% in those few seconds. The fact that the “fake” news was coming from a reputable source made the impact all that more powerful. Responsibility for the attack was later claimed by the Syria Electronic Army, a group that is reported to have the tacit support of Bashar al-Assad, although that could not be independently confirmed.

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The combination of a connected world, speed of delivery and the sheer volume of information seems to have created a weapon that we have never seen the likes of. At least, not one of this size. This weapon has been used in the past, but it has only been used sparingly and by only a few players at a time.  In addition, it was only implemented in certain situations in history.

So what has changed? Well, now this weapon is implemented daily. It is in the hands of many, although some wield more power than others, the small players still have the ability to make use of this weapon in a very efficient manner. The weapon is misinformation.

Why is it so powerful? Each time a reader encounters one of these stories on Facebook, Google, Twitter or really anywhere, it makes a subtle impression. Each time, the story grows more familiar. And that familiarity casts the illusion of truth. The more sensationalized a story, the more it has the ability to spread. A story that casts a wide net attracts a large number of viewers. In today’s connected world, a large audience translates to money.

Although many companies and individuals attempt to “stretch the truth” or outright create “fake news” as a strategy to gain followers there are many other motives to do so. The Government has employed a strategy of misinformation for years as a means of rallying support for their causes. On February 5, 2003, Powell appeared before the UN to prove the urgency to engage a war with Iraq. Powell himself stated later: “I, of course, regret the U.N. speech that I gave,” he said, which became the prominent presentation of their case. In May 2016, Powell said,  “At the time I made the speech to the UN, President George W. Bush had already made the decision for military action.”

Donald Trump has been the US President for over one year now, yet that has not stemmed the constant barrage of conspiracy theories around his win concerning potential collusion with the Russians. What it has done though is to present the power of misinformation in forming people’s opinions. Regardless of the fact that the stories we have heard are true or not, the seeds have been sown.

These false ideas that enter our psyche create feelings of doubt and suspicion. This in turn creates anxiety within the masses. The manipulative power of today’s social media tools (see here) coupled with our need to satisfy our addiction for more information, in order to quell these doubts, creates a powerful tool in the form of WMD, words of mass destruction.