We don’t like being left in doubt or uncertainty. We feel exposed or somehow guilty if we face a problem and elect to do nothing in response. One simple rule is that if you have nothing to say, it’s best to shut up – but we have trouble in extending that maxim into the realm of action. We tend to be biased in favour of action over inaction. One maxim might be that if you can’t predict the outcome of a proposed course of action, but it is one that may hurt you or others, hold your hand, unless circumstances dictate that you have no reasonable alternative but to pursue that option.
An Israeli researcher into psychology evaluated penalty shoot-outs in soccer. The ball takes a fraction of a second to go from boot to goal. The goalkeeper can’t assess the trajectory and then decide which way to go. He has to commit before the ball is kicked. Strikers opt for three options more or less equally – go to the left, go to the right, or shoot straight at the centre. Staying in the middle would be a reasonable option for the goalkeeper, since that is where about one third of shots go, and where they have the best option of blocking the shot. But most dive to the right or left. Why? Because you look stupid if you are seen to do nothing and just watch the ball sail past. The study confirmed that goalkeepers are biased in favour of action.
This bias is the bane of small shareholders. They keep thinking that they should do something when their best strategy is to acquire stakes in good businesses and just collect the dividends and watch the market go up and down – volatility is different to risk. But there are buildings full of people whose whole livelihood depends on people not being content to sit on their investments – their business depends on other people’s trading in shares. Their business depends on people being busy.
In his book, The art of thinking clearly, Rolf Dobelli quotes the main adviser to Warren Buffett: ‘We’ve got discipline in avoiding just doing any damn thing because you can’t stand inactivity.’ In the Epilogue, Dobelli says that ‘Negative knowledge (what not to do) is much more important than positive knowledge (what to do).’ And he again refers to the Buffett adviser: ‘Charlie and I have not learned how to solve difficult business problems. What we have learned is to avoid them.’ We just find it hard to resist the suggestion that doing something is better than doing nothing. That position is commonly dead wrong. The French philosopher Blaise Pascal memorably said: ‘All of humanity’s problems stem from man’s inability to sit quietly in a room alone.’ Investors should remember that advice of Pascal. Its proof lies in Donald Trump. Warren Buffett says: ‘Inactivity strikes us as intelligent behaviour.’
Keats found the answer in Shakespeare:
At once it struck me, what quality went to form a Man of Achievement, especially in literature, and which Shakespeare possessed so enormously – I mean Negative Capability, that is when man is capable of being in uncertainties, mysteries, doubts, without any irritable reaching after fact and reason.
The need to do something – anything – is behind most of the mistakes the west has made in intervening in the Middle East. A parliamentary committee has just condemned David Cameron for deciding to bomb Libya. The English parliament refused to endorse action in Syria. The problem of intervention is obvious – when can you leave?
As I follow it, we are engaged in bombing Syria. Putin and Assad are targeting civilians and hospitals. We are aiding them. The evidence coming out of Aleppo is beyond horror. Put to one side whether we are accessories to war crimes including ethnic cleansing, common humanity demands that we get out of Syria. Whatever interest we may have had in our own self-defence, it cannot stand up against the horror of Aleppo. We cannot be a party to the greatest failure of humanity since the Third Reich.
Poet of the month: Paul Verlaine
It rains in my heart
It rains in my heart
As it rains on the town,
What languor so dark
That soaks to my heart?
Oh sweet sound of the rain
On the earth and the roofs!
For the dull heart again,
Oh the song of the rain!
It rains for no reason
In this heart lacking heart.
What? And no treason?
It’s grief without reason.
By far the worst pain,
Without hatred, or love,
Yet no way to explain
Why my heart feels such pain!