A few summers ago I was sailing in Boston Harbor with three couples and as it happened, all of the men were facing southwest towards land and saw very ominous black clouds with air to ground lightening moving our way. All of the women were facing northeast and saw sunny blue skies. As the women all commented on how beautiful it was, the men all silently (wisely) exchanged very concerned looks as we had a very different view.
That reminded me of when I was a psychology major in college and we studied a theory called “Cognitive Dissonance” which is a discomfort caused by holding conflicting cognitions (e.g., ideas, beliefs, values, emotional reactions) simultaneously. Smoking is a common example of cognitive dissonance because it is widely accepted that cigarettes can cause lung cancer, and smokers must reconcile their habit with the desire to live long and healthy lives.
The graphic above is titled “Dueling Forecasts” which is typical of my email in-box content every single day. Highly respected authors, thought leaders, portfolio managers and experts in investments and economics freely share their latest thoughts with me in white papers and research which is all conflicted with each other. One of the lessons I learned early in the advice business is that we are paid to have an opinion and we should be opinionated. The question for me is always “Which opinion is the right one?”