Bias Part 1
I was musing about my life as I was heading in to work this morning.
It seems, when viewed a certain way, that approximately every twelve years my life has a huge shakeup, caused by events beyond my control.
When I was a couple of weeks away from turning 18, it seemed I was on top of the world. I was a straight A student, a National Merit scholar, had my pick of full ride scholarships from universities all over the country, and was planning on a career in nuclear engineering after college. Then, the whammy. I was diagnosed with a rare form of cancer, spent my high school graduation getting ready for surgery a thousand miles away from home, spent my summer having radiation therapy, my first semester of college undergoing chemotherapy, and ended up mentally pretty messed up. Within a year or two, I was, to quote my father, "a drunken druggie".
That state of affairs persisted for about four more years, till I met and married M, and from that point forward I slowly reformed most of my bad habits, worked hard in my new career of the restaurant business, and eventually got to the point where I was a fairly well respected restaurant manager in the local community. So, I started my own restaurant with partner. Then, the whammy.
When I let my partner operate a new restaurant without my presence and supervision, he rapidly drove us into bankruptcy. It took me several years to recover, and financially in some ways I never did. I did take advantage of my reduced state and go back to school again for a while, and by various serendipitous events, I started a new career as a technical writer.
This went pretty well for a long time. After some short term jobs, I eventually went to work for SCP Global Technologies, and remained there for nine-plus years. Near the end, I had a group of writers reporting to me, and was on track to perhaps head up an engineering department at some point. Then, the whammy. In 2001 a sharp downturn in the tech industry started our company on a downhill slide. The first thing that happened was that all of the writers in my group were laid off, and my career plan went in the toilet. I survived several years and rounds of layoffs, but eventually got the axe and was on unemployment for two years, while I went back to school for the third (and final?) time to get my bachelors degree.
As you can imagine, this didn't help my financial situation much, either.
Ok, so if you look at this series of events, I could blame the major branches in my career and finances totally on circumstances beyond my control. But there's an alternate story line that I won't get into right now, in which I blame myself for these events based on my own bad decision making. In brief, I didn't have to react to my illness by indulging myself in vices; I didn't have to go into business with a friend whose background I hadn't checked thoroughly, and I could have switched industries while I was still at my peak as a technical writer (this third one is marginal, as I really hoped and believed that SCP could pull it out and survive - I just bet the wrong horse).
Anyway, I'm watching a presentation today about financial planning, and the guy is talking about various biases that make investors lose money. The one that strikes a chord, suddenly, is Self Attribution Bias. This is the tendency to attribute success to our own innate skills or abilities, and to attribute failure to externalities outside of our control. What a concept! I think we're all guilty of this bias in so many aspects of our lives.
It seems, when viewed a certain way, that approximately every twelve years my life has a huge shakeup, caused by events beyond my control.
When I was a couple of weeks away from turning 18, it seemed I was on top of the world. I was a straight A student, a National Merit scholar, had my pick of full ride scholarships from universities all over the country, and was planning on a career in nuclear engineering after college. Then, the whammy. I was diagnosed with a rare form of cancer, spent my high school graduation getting ready for surgery a thousand miles away from home, spent my summer having radiation therapy, my first semester of college undergoing chemotherapy, and ended up mentally pretty messed up. Within a year or two, I was, to quote my father, "a drunken druggie".
That state of affairs persisted for about four more years, till I met and married M, and from that point forward I slowly reformed most of my bad habits, worked hard in my new career of the restaurant business, and eventually got to the point where I was a fairly well respected restaurant manager in the local community. So, I started my own restaurant with partner. Then, the whammy.
When I let my partner operate a new restaurant without my presence and supervision, he rapidly drove us into bankruptcy. It took me several years to recover, and financially in some ways I never did. I did take advantage of my reduced state and go back to school again for a while, and by various serendipitous events, I started a new career as a technical writer.
This went pretty well for a long time. After some short term jobs, I eventually went to work for SCP Global Technologies, and remained there for nine-plus years. Near the end, I had a group of writers reporting to me, and was on track to perhaps head up an engineering department at some point. Then, the whammy. In 2001 a sharp downturn in the tech industry started our company on a downhill slide. The first thing that happened was that all of the writers in my group were laid off, and my career plan went in the toilet. I survived several years and rounds of layoffs, but eventually got the axe and was on unemployment for two years, while I went back to school for the third (and final?) time to get my bachelors degree.
As you can imagine, this didn't help my financial situation much, either.
Ok, so if you look at this series of events, I could blame the major branches in my career and finances totally on circumstances beyond my control. But there's an alternate story line that I won't get into right now, in which I blame myself for these events based on my own bad decision making. In brief, I didn't have to react to my illness by indulging myself in vices; I didn't have to go into business with a friend whose background I hadn't checked thoroughly, and I could have switched industries while I was still at my peak as a technical writer (this third one is marginal, as I really hoped and believed that SCP could pull it out and survive - I just bet the wrong horse).
Anyway, I'm watching a presentation today about financial planning, and the guy is talking about various biases that make investors lose money. The one that strikes a chord, suddenly, is Self Attribution Bias. This is the tendency to attribute success to our own innate skills or abilities, and to attribute failure to externalities outside of our control. What a concept! I think we're all guilty of this bias in so many aspects of our lives.