Psychologist turned investor Phil Perlman was on fire talking to Howard Lindzon about how humans struggle with decision making as is, let alone when we’re under pressure. In the current state of virus fears and panic, whether it’s in the toilet paper aisle at the grocery store or in our retirement accounts, we have to step back, observe what’s going around us, and just not do anything dumb. It’s really that simple. I don’t have direct quotes but allow me to paraphrase his point:
Humans have enough trouble making decisions in the best of times. Look out your door and there is somebody doing something dumb, right in front of your face, every single day. In markets, away from markets, wherever. So, in a situation, where people are panicking, the government is panicking, the media is going ballistic – people are just going to be idiotic. If you can just NOT do something super, super stupid, that’s all you have to do.
It’s a sardonic view of the world, but he’s onto something. If we humans call are susceptible to stress within a decision, how will we decide differently when we add stress outside of the decision? Mistakes will be made, overreactions will be had, and people will be people. We’re seeing this amplified all around us right now. It’s a scary world out there at the moment. Take a deep breath, calm down, and above all, try not do anything super, super stupid. The results will speak for themselves.