| Sunday, 31 March 2024 |
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Good morning [%first_name |Dear Reader%],
Ever notice how during flights it’s more fun watching the movie playing on the screens in the next row than on your own? Why is that??
I rewatched the wonderful 2014 movie Interstellar in the above manner during a return flight from a nearly week-long vacation. Of course, as with all Christopher Nolan movies, you have to read a Wikipedia plot summary subsequently to ensure all the pieces fit together!
I also managed to catch the brilliance of the penumbral lunar eclipse (“worm moon”) reflected over the seas. Here’s a barely passable photo I took with my phone at 8:09 pm.
Needless to say, I was thoroughly mauled by a happy-angry Gabru upon return.
How was your week? 🙂
Here’s everything we have for you today:
1. Imagining hindsight
2. Why the ‘godfather of electric mobility’ stopped making EVs 🎙️
3. Landmarks 📸
4. A Sci-fi Special 📚
1. Imagining hindsight
Daniel Kahneman, the Nobel Prize-winning psychologist who “explained investors to themselves”, died this week. RIP.
For decades, he and Tversky had conducted experiments, almost childlike in their simplicity, to see how people really think and behave.
No, Danny said, money lost isn’t the same as money gained. Losses feel at least twice as painful as gains feel pleasant. He asked the conference attendees: If you’d lose $100 on a coin toss if it came up tails, how much would you have to win on heads before you’d take the bet? Most of us said $200 or more.
No, people don’t incorporate all available information. We think short streaks in a random process enable us to predict what comes next. We think jackpots happen more often than they do, making us overconfident. We think disasters are more common than they are, making us suckers for schemes that purport to protect us.
The Psychologist Who Turned the Investing World on Its Head—Jason Zweig, Wall Street Journal
Baruch Fischhoff was a psychology student in Israel in the 1970s, with Kahneman as one of his supervisors.
Fischoff is credited for experimenting with and postulating the concept of “hindsight bias”, also known as “I-knew-it-all-along”.
The hindsight bias can have a negative influence on our decision-making. Part of what goes into making good decisions is realistically assessing their consequences. If we look back at past decisions and conclude that their outcomes were indeed known to us at the time (when they weren’t), then it makes sense that we will overestimate our ability to foresee the implications of our future decisions. This can be dangerous, as our overconfidence may lead us to take unnecessary risks.1 Think of a gambler who looks back at past losses as predictable, making him increasingly confident that his next trip to the casino will be successful.
Why do unpredictable events only seem predictable after they occur?
The problem with hindsight bias is that—other than leading us towards bad decisions—it makes it harder for us to learn the right lessons from the past.
“If you feel like you knew it all along, it means you won’t stop to examine why something really happened,” observes Roese. “It’s often hard to convince seasoned decision makers that they might fall prey to hindsight bias.”
Hindsight bias can also make us overconfident in how certain we are about our own judgments. Research has shown, for example, that overconfident entrepreneurs are more likely to take on risky, ill-informed ventures that fail to produce a significant return on investment.
‘I Knew It All Along…Didn’t I?’ – Understanding Hindsight Bias
But does hindsight always have to be in the past? (Well, it sort of does, d-uh! Please bear with me.)
One of the secrets of Amazon’s continuing success despite its age and scale is the concept of “working backwards”. Instead of working, well, forward from the present like most of us default to, Amazon encourages its teams to imagine themselves in the future with a new product or feature for customers. What would the announcement press release be?
I enjoy reading The Ken because it is informative, the articles are well researched, well written, without the spin and bias. I admire The Ken team for their dedication to getting closer to the true picture.
Hari Buggana
Chairman and MD, InvAscent
Transparent, Honest, Detailed. To me, The Ken has been this since the day I subscribed to them. The research that they put into each story and the way it is presented is thoroughly interesting. Personally, I’ve always had a great time interacting with the publication and reading the stories.
Harshil Mathur
CEO and Co-Founder, Razorpay
The Ken has proven naysayers wrong by successfully running a digital news publication on a pure-subscription business model in India. They have shown that discerning readers are willing to pay for well-researched, well-written, in-dept news articles.
Kiran Mazumdar Shaw
Executive Chairperson, Biocon Limited
As a designer, it’s easy to get lost in the craft of building products. As a business owner however, keeping up with a rapidly changing landscape is key to saying relevant. The Ken doesn’t just help me stay on top of what’s happening in India(and beyond), but makes it fun to do so.
Rahul Gonsalves
Co-founder and CEO, Obvious Ventures