“Homines quod volunt credunt.”
Its a quote by Julius Ceasar. It means, “Men believe what they want to.”
It is striking that this was said over 2000 years ago. So have we taken on board this wisdom in 2000 years! Tim Harford, of the FT, writes a wonderful essay about the subject of fooling ourselves. It’s certainly worth a read. Here’s the link. Harford says “The French satirist Molière once wrote that “a learned fool is more foolish than an ignorant one”. Modern social science suggests that Molière was right. Why is this important?
The job of wealth managers, bankers, stockbrokers and various advisers is storytelling. They are quite brilliant at it as so many people believe their stories. When a fund manager talks about outperformance, it’s natural to want to believe their stories of success. They back up their claims with graphs, which add validity to arguments. Yet Julius Ceasar was right “Men believe what they want to.”
Harford helps readers to be more aware of the storytelling, especially if the stories want to sell you something. He explains that when listening to a story, be present how you feel. What is your gut telling you? Does the story make you feel positive? Does it endorse and support your own views? If you can analyse how you feel at the time, you may be less likely to let your imagination run away with you.
I listen to the stories people tell me about why they invest the way they do, and many are the recipients of great storytellers. And if you make a mistake by employing the wrong people, it may take years for that mistake to surface. That’s time you can’t get back.
What Harford is saying and what we are saying is to recognise you can fool yourself by believing what you want to believe. Try to catch yourself. If someone is telling a story to help you buy, ask yourself are you really clear about what they are selling or are your emotions guiding you because the story makes sense to you. It’s why often we talk about making the right decisions, not the decisions that feel right.