Updated: Feb 14, 2019
Wisdom is doing the work to line up your views with reality.
For example, taking drugs isn’t a good idea. The reality is drugs are addictive and not good for our bodies. We can delude ourselves by thinking they aren’t harmful but it doesn’t change the reality.
But the thing about reality is: there are always two sides to it.
To prove this, do you think there is something everyone in the world agrees on?
For goodness sakes, there are some people out there who believe the Earth is flat! (sorry Flat-Earth theorists…)
Being able to see both sides of an issue is such an important skill for investors. But investing aside, it’s an incredibly important life skill. It’s so much easier to take the viewpoint of those around you. But then you’re left with surface level knowledge.
Charlie Munger says, “I never allow myself to have an opinion on anything that I don’t know the other side’s argument better than they do.”
What if we all approached opinions this way? Instead of letting opinions happen to us, what if we put in the work to have our own?
I don’t say any of this condescendingly either. I’m sure most of my opinions are not really my own. And it makes sense that it’s this way. As humans, saving energy is ingrained in our DNA. That’s why hard work is hard; because it takes energy. If we worked to have an opinion on all issues we came across, it would be exhausting. That’s why our brains take shortcuts to latch onto others’ ideas.
Furthermore, seeing both sides is important in more ways than just intellectually. “Putting yourself in someone else’s shoes” requires seeing both sides. You can’t be empathetic without doing this.
Your grouchy neighbor probably had a rough childhood. That arrogant co-worker might be insecure under all the pomp. The person that cut you off in traffic might be a brand new driver. But, again, it takes energy to even try to see the other side.
As an investor, not being able to see both sides is a big disadvantage. For example, let’s say you own a lot of stock in a certain company, but an article is published defaming the company.
(Remember: every time you buy stock means someone out in the world is selling it. There are two sides to it).
If you know the reasons why you bought your stock, that is one thing. But if you can point out why the other side is wrong, that reveals a deeper level of understanding. Knowing the other side better than the person against you is the work necessary to have an informed opinion.
And imagine if we actually took this to heart. We’d surely have fewer strong opinions because it would take a lot of time and effort to form them. One thing that prevents us from seeing both sides is disagreement.
Usually, when someone disagrees with us, we feel a personal attack. After all, if someone disagrees with us that signals they think they are smarter, right? Not so fast. It would be arrogant to think we could know everything. Instead of taking it personally, we can choose to focus on the issue at hand. This eliminates an agenda of trying to prove how smart we are and instead, allows us to take a posture of learning and seeking truth.
Because that’s what it’s about. Seeking truth rather than feeling all happy and comfortable inside. As we said last week, “Would You Rather Be Happy or Right?”
What Are We To Do?
So how can we get better at seeing both sides to an issue?
It all starts with humility. If we think we know everything, what’s the use in seeing the other side? They’re wrong after all!
If we start from a place of “we-might-be-wrong” rather than “we’re-definitely-right” we give ourselves a better chance of lining up our views with reality.
But this isn’t easy. Society rewards those who seemingly have it all figured out. Think about it. When’s the last time you saw a politician admit he or she didn’t know something. Unfortunately, it would be disastrous to their public image.
If we think we know everything, we are sadly mistaken.
Another impediment to seeing both sides is from commitment bias. In the book Influence by Robert Cialdini, he cites a study relating to this idea.
A group of researchers went around a neighborhood and asked if people would oblige to putting a small, three-inch sticker in their windows about safe driving. Nothing too big.
The majority agreed.
Ten days later, the same group of researchers went back to those houses that obliged and made a bigger ask. They asked if these neighbors would put a billboard on their front lawn about safe driving. [By the way, these neighbors didn’t know these two favors were related.]
What the researchers found was quite astounding. The neighbors who had agreed to put the small sticker in their window were four times more likely to put a huge billboard in their yard than a control group of neighbors who had never been asked about the stickers ten days prior.
This reveals our bias to commitment. Those neighbors who agreed to the stickers, began to see themselves as social citizens, people who cared about the community. Their perception of themselves had changed. So when the researchers came back, unknowingly, these neighbors made a decision in-line with their new-found commitment to the community.
It works the same way with our opinions. As soon as we strongly believe something, we become committed to it. This can be dangerous when our views become a core part of our identity. This makes seeing the other side infinitely harder because then we might have to change our identity if we’re wrong.
Seemingly, there are two sides to everything. If we’re serious about seeking truth, we need to know the opposite side of our view better than the person who holds such a view. This is the work required to have an opinion.
I’m long humility and short opinions. [investor lingo: long = more important and short = less important]
Humility and awareness of commitment bias are the first steps to lining up our own views with reality.
Seek truth rather than seeking to please yourself. You’ll garner more respect, make better decisions, and be more empathetic.