Author: shyam

In The Attention Merchants: The Epic Scramble to Get Inside Our Heads (Amazon,) author Tim Wu walks us through how the advertising industry evolved from its patent medicine roots to the current mess of privacy invading ad exchanges.

Advertising is primarily about gaining a person’s attention. The medium through which this is done has evolved from posters and billboards to newspapers and magazines to tv and internet. The media is the aggregator of attention – their principle goal is to draw people in and then sell their attention to the highest bidder. But how do you measure attention? How do you know if someone watched your ad? Or, for that matter, should watch your ad? What are the boundaries of one’s privacy?

What struck me was that as the stakes kept getting higher, so did the degree of invasion into our head-space. We are now at a point where the vast majority of websites you visit are sending your data to third-party sources, usually without your permission or knowledge.

For every two eyes looking at a screen there are probably ten or more looking back at them.

And it is no longer just your “digital” footprint.

Did you know that there are now billboards that can track you by your phone’s wifi?

All WiFi-capable devices broadcast a unique ID – a Media Access Control (MAC) address – when they’re looking for networks (and so long as WiFi is enabled, they’re always looking for networks). So if you walk around carrying a mobile phone with WiFi turned on, you’re broadcasting your own, unique radio beacon, and it’s easy to track your movements.

Scary stuff.

Recommendation: Worth a read.

Mistakes Were Made (But Not by Me): Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts by Carol Tavris (Amazon,) shows how we self-justify the mistakes we make, blame it others and perpetuate a destructive cycle.

Almost all of us carry an image of ourselves that we are smart, and basically good. When me make decisions that lead to poor outcomes, it conflicts with this internal image. This dissonance, if left unchecked, is resolved by self-justification. And so, unconsciously, we create fictions that absolve us of responsibility, restoring our belief that we are smart, moral, and right – a belief that often keeps us on a course that is dumb, immoral, and wrong.

As investors, we aim to have “strong convictions that are weakly held.” But it is easier said than done. Even though we know to follow scientific process, while faced with disconcerting evidence, we tend to double down – “having the courage of one’s convictions.”

It is part of the scientific attitude to change one’s beliefs once they are discredited. Well, it’s not an easy thing to do. Combine invested time, invested money, high hopes, high expectations, and a relative amount of pride, and you’re up for quite a challenge when confronted with contradicting evidence.

In investing, there are examples where both “sticking to ones guns” and “be like water, my friend” have worked. Here’s an example of the former: Tony Dye (from the Undercover Economist) stuck to his guns, lost his job, but was eventually proven right.

And as an example of why you shouldn’t stick to your guns: The Half-Life of Investment Strategies

And when you are wrong, even the best of us try to reduce dissonance by blaming somebody else: This Angry Stock Picker Says Trump Tweets Are Hurting His Investments

How do you change your mind?

Recommendation: Worth a read.