The Investing Mistake That Will Leave You Broke
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This is part two of a two-part series. To read part one, go here.
Humans are tribal. Our tribalism goes back to the age of cavemen. Deep in the cave, armed with rocks and sticks, fending off predators, we found comfort that the people around us (our tribe) shared the same animosity toward the lion at the front door.
Fast-forward to Murmansk, Russia in the early 1980s. One day my apartment block started hating everyone from another apartment block across the street. Though the hate was mutual, to this day I have no idea why we suddenly hated them. I remember it got to the point that we were going to go fight them. Thank god we did not.
Tribalism makes complete sense when it comes to family – you want to know that someone will always have your back, no matter what.
Even in the workplace, if used strategically, tribalism can unite and motivate employees to create a better product than the competition (the other tribes).
Of course, there is tribalism in sports. My partner, Mike, is a lifelong University of Colorado football fan. I saw a bumper sticker on his desk this summer that read “Don’t wait till September. Start hating Nebraska now.” The CU Buffs and University of Nebraska rivalry is legendary. Tribalism in sports is usually harmless, unless you are a soccer fan in Brazil.
Tribalism in politics is less harmless, as it often turns politicians into thoughtless party-line drones. Yes, I am going to step onto unpleasant ground here, just to illustrate a point. (Trust me, I really don’t want to go there). Imagine being a Democrat and going to the Democratic convention, fully in agreement with the core values of the people around you, except that you believe all abortions should be banned. Or imagine being a diehard Republican at the Republican convention and staunchly believing that all guns should be banned. You’d feel uncomfortable expressing your views, which would have a similar effect as passing gas in public (or worse).
Holding views that go against the politics of your tribe will tend to eventually result in your either changing your views (a process that will be very incremental) or suppressing them. If what I’m saying here upsets you, I am sorry, but that just further proves my point.
In investing, tribalism is outright dangerous to your wealth. When you allow tribalism to impact your thinking, you lose the ability to think independently.