“There are three types of people in this world: Those who don’t move; those who are moved; and those who move.” “Man is made for action!” And my personal favorite or, as my father used to say, “Don’t just sit there, do something!”
From childhood, we are instilled with a bias for action. In many cases, it is a useful trait. It is even possible that our bias for action is genetic hand-me-down from our pre-historic ancestors and it enabled us to avoid being devoured by predators.
Is this bias toward action something that we may need to unlearn?
The answer is a qualified, yes. Scientists studying the odds of goalies trying to stop penalty kicks concluded that a goalie’s best strategy was to stay put. If they had followed this course of action, they would have been successful 33 percent of the time. According to the data, however, they only employed this strategy 6 percent of the time.
There is a reason for this: we don’t like doing nothing. In fact, people who don’t act often feel a deep emotional pang of guilt for their inaction. In the case of a goalie during a shoot-out, for instance, the goalie would feel worse for just standing there than he would have if he dived left on, say, a kick to the right. This is true even though the outcome would have been the same – a goal. In common parlance, “At least he did something.”
The example of a goalie staying still might seem trivial, but the implications for staying put can have real-world implications. Consider the stock market.
It is not uncommon for people to rush in and buy a certain stock when others are doing the same. The result, as a spate of investing “bubbles” have recently demonstrated, is artificially high and, ultimately, unsustainable stock prices. Counter-intuitively, many people also follow the actions of others when selling a stock. That is they sell only because other people are selling, not because the underlying of the fundamentals of the stock have changed.
Warren Buffett is one of the world’s richest men, but his right hand man, Charlie Munger, says “Half of Warren’s time is sitting on his ass and reading; the other half is spent talking on the phone or in person to a highly gifted person that he trusts and trusts him.” In other words, Buffett stays put a lot.
A bias toward staying put can also reap other unexpected benefits. Have you ever been traveling down the freeway and then spotted the other cars moving over into a more crowded lane? What is occurring is that drivers in the trailing cars believe that the action of the drivers in front of them are based on a knowledge of something that they can’t yet see and they decide to mimic the action. Sometimes there really is something in the road, but sometimes it is the result of nothing more than two cars simultaneously shifting lanes for arbitrary and unrelated reasons.
The problem begins to manifest as this faulty logic gains momentum and subsequent drivers shift lanes and thus offer even more “evidence” for others to shift lanes.
Lesson: If you want to get ahead on the freeway and in life it behooves you to wait until you actually have access to compelling information that requires movement. Or, as your mother likely told you as some point during your youth, “Just because everybody else is doing something that doesn’t mean that you should do it too!”
