The Value of Being Utterly, Gloriously Wrong
by Alexander Green

When I started managing client monies back in the mid-80s, I was as green as a Granny Smith apple.

Although I was confident I knew what I was doing, I ended up getting my head handed to me in the market. Over... and over... and over again.

My investment strategy was a completely blinkered market-timing approach. And while I believed in it heart and soul at the time, it had little chance of success. (Pity my early clients.) Things never got better until the day I recognized that fact.

No one relishes the idea of being utterly and profoundly wrong. But discovering that we are can be one of life's most rewarding experiences.

For reasons of pride, ego, hubris or fear, however, we have trouble accepting this. That means we miss out on some of the best lessons life has to offer.

After all, when you admit you're wrong, all you're essentially saying is that you know more today than you did yesterday.

Yet studies show that we glom onto ideas early and resist letting them go. Psychologists call it "confirmation bias." That is, we seek evidence that confirms our beliefs and ignore or reinterpret evidence that refutes them.

It's easy to see how. We all gravitate toward like-minded souls, listen primarily to those who share our opinions, and read books and articles by writers who confirm our views.

But the narrower our sources of information, the more error-prone our thinking becomes. Our only exercise becomes jumping to conclusions.

In a 1989 study, for example, psychologist Deanna Kuhn found that when subjects were exposed to evidence inconsistent with a theory they preferred, they failed to notice it. When they did recognize the contradictory evidence, they simply reinterpreted it in favor of their preconceived belief.

In a related study, Scientific American columnist Michael Shermer writes that, "Kuhn played an audio recording of an actual murder trial and discovered that instead of evaluating the evidence first and then coming to a conclusion, most subjects concocted a narrative in their mind about what happened, made a decision of guilt or innocence, then riffled through the evidence and picked out what most closely fit the story."

Knowing this, is it terribly surprising that so far more than 200 death-row inmates in the U.S. have been exonerated by DNA evidence? (Maybe Woody Allen wasn't kidding when he said he'd hate to leave his fate in the hands of 12 people who weren't smart enough to get out of jury duty.)

In truth, by looking at the evidence with an open mind we have nothing to lose but our ignorance. And sometimes we will solidify our existing views, making them stronger.

In his book "Confessions of a Philosopher," Bryan Magee writes that he became a skilled debater by identifying his opponent's weak points and then bringing concentrated fire to bear on them, a tactic used by successful polemicists since ancient times.

Yet he was blown away to discover that philosopher Karl Popper did just the opposite:

"He sought out his opponent's case at its strongest and attacked that. Indeed, he would improve it, if he possibly could, before attacking it... He would remove avoidable contradictions or weaknesses, close loopholes, pass over minor deficiencies, let his opponent's case have the benefit of every possible doubt, and reformulate the most appealing parts of it in the most rigorous, powerful and effective arguments he could find - and then direct his onslaught against it. The outcome, when successful, was devastating. At the end there would be nothing left to say in favor of the opposing case except for tributes and concessions that Popper himself had already made."

Amazing. Yet no one reaches this level of understanding without taking the time to thoroughly investigate an opposing view rather than dismissing it out of hand. It takes time to weigh the evidence, consider it, and allow for the possibility that we could be mistaken. This is something that most of us - if we're honest with ourselves - are reluctant to do.

When you bring an open mind to a conflict, one of three things will happen. You'll strengthen your existing convictions. You'll become more sympathetic to the opposing view. Or you'll end up smarter today than you were yesterday - and get a lesson in humility in the bargain.

That's why you should never lose your temper in an argument. If you're right, you don't need to. If you're wrong, you can't afford to.

As the French enlightenment professor Voltaire said, "Doubt is not a pleasant condition, but certainty is an absurd one."

Carpe Diem,

Alex

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