On Holding Opinions

For many years I have held the belief that we are all entitled to our own opinions, we just are not entitled to have anyone take them seriously. That forgives me when I choose to ignore some of the ones I think are crazy and not be offended when others ignore me.

I have recently come upon a better way to be able to cope with those opinions and consequently with my own.

“You’re entitled to your own opinion if you keep your opinion to yourself. If you decide to say it out loud, then I think you have a responsibility to be open to changing your mind in the face of better logic or stronger data. I think if you’re willing to voice an opinion, you should also be willing to change that opinion”

From “Think Again” by Adam M. Grant

Opinions are not facts.

Sometimes we get them from others without benefit of their data or their reasoning. When you think about it, that is most of what we learned as young children. That might be quite valuable but it could also be quite obsolete.

From time to time it pays to assess what you think is true. Maybe waiting an hour to swim after eating is not as true as we think. Maybe one-decision stocks are not really that. Maybe Bitcoin will get to $200 before it gets to $200,000.

Received wisdom

It will serve you well if you you are aware of “received wisdom.” That’s the information you hold that was untested when it appeared. We are all a bit lazy about assessing information we receive. Once you think about things you notice, they tend to fit into one of three categories.

  1. Almost certainly false, and this is why I think that.
  2. Almost certainly true, and this is why I think that.
  3. Might be either, but I have too little to help me decide.

Nothing to help me decide would include opinions from anyone else who did not show the evidence nor did they show their reasoning. Most of the climate change arguments fit there. Much of the “Trump was a buffoon” assessments do too. We hold strong opinions on these but if we had to support them, we would be lost.

Not everything complex is evidence

Always remember models are not evidence. They are a particular arrangement of specific evidence. There could be and likely are other arrangements and other evidence.

Statistics won’t help much either. There is a common and insidious trick. End-point bias. Choosing the beginning and the end of a time series is harmful to understanding. Even longish periods can confuse. Consider the S&P 500 Index.

  • From March 2008 to now it is up at an annual compound rate of return of 14.9%
  • From August 2007 March 2021 it is up 3.9% annually
  • From August to 2007 to now it is up 7.9%

Each is true, but none conveys useful information. None informs what is possible for the near future. Truth and Meaning are not tightly connected.

The takeaway

  1. Check the information you can. If there is none, ignore the opinion.
  2. Assess why it is presented the way it is and decide if it primarily supports the presenter’s position.
  3. Learn who are the honest presenters. A condition that doesn’t make them right, just less likely to be wrong.
  4. Develop, the undecided file and move material out of it regularly.
  5. Know when your belief is an opinion and be prepared to change it when presented with something better.

I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

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