Ideas Stock Markets- why investors, authors and readers behave similarly?
Is trading ideas in meetings similar to trading stocks in stock markets?
Can the stock markets be the metaphor for “trading ideas” in-group meetings such as those in businesses and even at family gathering, or discussions on social platforms? Instead of selling and buying stocks, it is selling and buying ideas.
The above two questions clouded my mind over the last few days and surprises emerged in trying to search for answers to resolve them.
To start with- how these questions popped up in my mind?
I consider myself fortunate that most of my posts attract many comments. Analyzing those comments revealed several observations and questions as well. The authors as well as the readers may experience few of these observations and maybe asking the same questions. These include among others:
· Writer of the comment agrees. Is it of Confirmation Bias to what she/he knows? This bias creates another bias that is the Blind-Spot Bias because of falling to the spot of owned confirmation bias.
· I agree with most comment here- is it because of the paradox of Conformity Bias?
· Recent findings suggest- is it because of the Recency Bias in which new information is overly weighted?
· The first comment by an acclaimed writer- is it the Anchoring Bias that is operating because over-reliance on the first comment, notably if it is from an established resource?
· The majority of comments are in agreement with the author- is it because the Bandwagon Effect attractor where the majority likes to settle in? This can be compounded by the Abilene Paradox in which the individuals maybe right, but fake assumptions of others’ suggestions are right even when they are wrong lead the comments’ writer to make the wrong evaluation of a post?
· The comments align with your long-owned beliefs- is this the Conservation Bias that satisfies the writer’s and readers’ egos?
· The majority of comments agree with the writer- and so the new comments tend to follow pattern. Is this because of the Zero-Risk Bias in operation as there is less risk in following the majority cascading to Separation-Risk Bias?
· The last few posts by the author had a streak of positive comments- and so the new post is a good one resulting in the Power-Streak Bias?
· Most comments are in agreement with the author even though they negate the readers’ evaluation. This may trigger the Imposter Paradox and the reader writes a comment that is in agreement with the majority because of self-doubt?
· the sentiments are mostly in agreement (or disagreement) with the author- even though the reader has a different thought than the writer of the post she/he writes an agreeable comment in alignment with the majority- this leads to a mind-heart gap and the Gap Paradox emerges. This issue I explained in my book in Arabic “Taming the Future”. It is when my mind urges me to sign a peace treaty with an enemy, but my heart says no. The fear to write a comment negating the majority even though my mind says they are wrong is applicable to the Comments Paradox.
· The writer of the post exposes the readers to many new topics the readers are unfamiliar with. They feel they know less than before reading the post. This creates what I describe as the Knowledge Inferiority Paradox and so I wrote an agreeing comment even though inside me I do not.
· a reader writes a comment criticizing the expert author because the reader is seeking fame- the Play-Big Greed for fame is distorting the reality.
· The greed makes successful traders drunk by their success- the “Success Syndrome” starts to be progressively more dominant as the greed for more blinds those investors to their forthcoming disappointments and nasty surprises. Authors are subject to exposure by the same paradox.
· The success syndrome is then coupled with the emerging syndrome- more successes invites the Dunning-Kruger effect to take the lead. The less smart investors believe that they are smarter and more capable than they really are. Their success falls apart. Likewise, the less smart readers may jump on the wagon as acclaimed experts.
There are always over-valued and under-valued stocks. Likewise, there shall be always over-valued and under-valued authors, readers, posts and comments. These shall continue as long there are biases and paradoxes.
Analogy with the Stock Markets
Reviewing the previous paradoxes and biases will point out that fear is a common denominator among them. Fear of risk, fear of labeling, fear of not conforming, fear of being accused as ignorant, fear of deviation and fear of isolation and other fears dictate on the reader what to say in her/his comment and the authors what to write. The other factor, which is greed, leads to the distortion of the value of comments and may spoil the authors as well.
Fear and greed are the two major factors that may lead to the misleading posts and/or comments. These two factors operate in meetings and in the stock markets. In meeting and including virtual meetings, these two factors operate as well. The social platform is the meeting room for readers to exchange the stocks of ideas.
The question that follows is if the wave’s say of comments would follow the pattern of the waves that we observe in the stock markets. Let us examine the feelings that dominate the stock markets to visualize the correlation first.
Meeting with self is unlike meeting in groups. The group influences the thinking and emotions of the individual and the individual in turn affects the thinking and emotions of the group. These interactions lead to the emergence of the paradoxes and biases discussed earlier. Investors meet in the exchange hall of the stock markets and they meet in a room or virtually on a social platform.
The Paradoxes of the Stock Markets is analogous to the Ideas Stock Markets. In both markets, people trade either stocks or “ideas stocks”.
The journey of emotions affects our behaviors. This can be best to watch visually the wave of emotions in the stock markets worldwide. The emotions start with the intensification of the positive emotions until disappointment is encountered and expectations fall below their expectation lines. This leads to the generation of negative emotions intensifying until they carry the investor to a rock-bottom state and the investor’s positive emotions become the prey for negative emotions. When a ray of hope appears the re-birth of positive emotions start and a new wave of positive emotions build up.
The predator negative emotions feed on the prey positive emotions. This reminds me of the prey-predator relationship in which the predators eat up the preys until no or enough preys are available and the predators suffer from hunger. It is an indirect way of committing suicide.
We fall preys to our emotions and our behavior follows a wavy path. These waves can become turbulent and we need to surf their turbulence as if great surfers surf the turbulent waters.
Behind the scenes, emerge the paradoxes and biases. These factors do not work in isolation and affect each other by feedback. No wonder the stock markets have such complexity making the precise prediction of their movements and trends practically impossible.
Do authors and comments’ writer pass through the same wave structure? My answer is yes.
· We need to reconsider the emotions affecting group thinking. There is diversity of hidden emotional factors that interact making the understanding of their outcome far more challenging than what appears on the surface.
· Changing the meeting place such as physical rooms, exchange rooms or virtual platforms affects the rate of changes. We shall observe the same wave patterns with their fractal and complex structures. Humans with the complexity of each person interacting with others count.
· It requires huge effort to think and interact with rationality in these meeting places.
· The few predators (the profit-making investors) that shall be happy to break the prey and cut them into pieces. This way they may enjoy having more “mouthfuls”.
· Worse is when investors, writers and comment writers become the prey and the preys at the same time. They all fall preys to their greediness for more success (readership for authors) and develop all or few of the complexities highlighted earlier in this post. They become like a serpentine biting their own successes and failures. This adds to the complexity of these markets (including Idea Markets) than what is experienced in simple prey-predator complexity.
· The sentiments that prevail in stock markets are indifferent from the sentiments of authors and readers and these sentiments shape up the mode of interactions between authors and readers.
· How do I try to buffer my complex biases and paradoxes by first reading the post and then comment before I read other comments? At least, I am not influenced by any other comment or the trend of the majority of comments. I admit my failure to do so sometimes.
I here confess that I experienced many of these paradoxes and biases. The best I could do is not to go to the extreme.
I have no complaint behind writing this post. Its publication coincides with the most complimentary comments I received over the years. I feel I am bloated with them. Therefore, the motive for writing this post is my search for answering the questions that are outlined in this post.