Psychological Triggers Exposed

So far we have discussed the normalcy bias, the silver bullet syndrome and the dangers of conformity. These diverse discussions all fit together in forming a puzzle of psychological triggers. The big picture can come together when you have all the pieces starting to fit together.
Earl Nightingale in his classic audio series “Lead the Field” told a story that fits this best.
“One day, a man was watching a professional football game on television. His five-year old son kept bothering him. So the man tore out a page of the Sunday paper. It was a full page airline ad that showed a picture of the world – the planet Earth as seen from space. He tore up the page into a dozen pieces and gave them to his son. He said to him, “Here, put this picture together with this cellophane tape, and show Daddy how smart you are.” He then went back to watching his football game. In a surprising short time, the youngster had taped the picture back together. It wasn’t very neat, but it was a very good job, indeed, for one so young. “Hey, that’s amazing!” the father said. “How did you put the world together so quickly?” The little boy said, “There was a picture of a man on the other side. I just put man together, and then the world was all together.”
The youngster was no doubt surprised by the big, warm hug he got. “That’s right, son,” the father said. “When the man is altogether, his world is altogether, too.”
Becoming aware of how the big picture comes together is a key component in making smart decisions about money. The small pieces that are torn apart are psychological triggers that come together to form the big picture. The sense that everything will return to “normal” (normalcy bias) is tied to the overwhelming hope that everything will work out well (the silver bullet syndrome), which leads directly into the complacency of conformity. It is the end result of conformity that leads investors running like lemmings toward a cliff.
These psychological triggers are ingrained in an individual’s thinking process. Napoleon Hill discussed this in terms such as accurate thinking, critical thinking and straight thinking. Hill, spoke in terms of rarity when discussing this form of thinking. Let’s briefly look at what Hill had written about “straight thinking.”
“Two great forces are working in the minds of all men to make them what they are. One is social heredity, and the other is physical heredity.
Physical heredity is the law of nature through which the sum and substance of all characteristics, traits and physical aspects of your ancestors, through the ages, have been handed on to you. You are unavoidably a product of all your ancestors.
Social heredity consists of every influence with which you will come in contact, from the time you reach a state of consciousness until you die. Your mother’s and father’s influence, your education, the conversations you listen to, religious influences, political ideas, the newspapers you read, the shows you see – they all have and will help to make you what you are. They are your social inheritance. Very few persons have what it takes to pull away from these and do some independent, accurate thinking for themselves. A few cast off their social inheritance and dare to be different and individualistic. When this happens, the world has an Edison, a Ford, a Thomas Paine, an Ingersoll or a Jonas Salk. But the vast majority of people allow themselves to become victims of social heredity. This is why straight thinking is such a rarity.” (Source: PMA Science of Success Course. Educational Edition. 1961. Pgs. 504 & 505
Independent, accurate thinking is the absolute benchmark for making smart decisions about money. The inoculation and insulation from scams, fraud and predatory sales tactics direct require you to learn how to become independent and accurate in your thinking process. The reality of victimization is that people are unaware of the natural bias they have formed toward conformity and the lack of independence in their thinking process. A major part of this redundant vicious cycle is the normalcy bias, the silver bullet syndrome and the ease of conformity.

Karl Schilling
321-250-1445 O
321-947-3220 C
Skype: karl.schilling5
advocacybz@gmail.com

When Too Many Think Alike

“As a general rule, it is foolish to do just what other people are doing, because there are almost sure to be too many people doing the same thing.”
— William Stanley Jevons (1835-1882)

One of the sure-fire ways to financial failure is conformity. There is nothing more damaging then following the crowd. For the most part the crowd is listening to someone else who is listening to the crowd. It is a vicious cycle that ends with a death spiral.
The economic climate we now live in is a highly evolutionary vehicle. Gone are the ties to the past and the trends that were in existence for the last 100 years. This is not a bump in the road which ends with everything happily and comfortably returning to “normal”; there is a new normal being created. It is a source of dramatic change with new rules and new patterns and trends.
The simple facts are those so-called experts are out of their depth as they have now become novices along with everyone else in this new age of geo-political driven economic events. The financial markets are being re-created and this requires all investors and consumers to become counter-intuitive in their thought processes. The financial decision making process that may have served you well in the past has been made meaningless into the future.

There are many dangerous myths built into your financial decision making process, we already covered the normalcy bias and the magic silver bullet syndrome, now you must confront the conformity of “everything old will be new again.”

“In speculation, as in most other things, one individual derives confidence from another. Such a one purchases or sells, not because he has had any really accurate information…but because some else has done so before him”
– J.R. McCulloch 1830

The following is a story that best clarifies what is happening in the financial markets today:
Everyone has had a taste of success. The explanation for it all is “the world is awash in liquidity”. Everyone is also feeling rather complacent & secure.
It reminds one of the Red Indians….

“It was autumn, and the Red Indians on the remote reservation asked their new Chief if the winter was going to be cold or mild. Since he was a Red Indian Chief in a modern society, he had never been taught the old secrets, and when he looked at the sky, he couldn’t tell what the weather was going to be. Nevertheless, to be on the safe side, he replied to his tribe that the winter was indeed going to be cold and that the members of the village should collect wood to be prepared. But also being a practical leader, after several days he got an idea.
He went to the phone booth, called the National Weather Service and asked “Is the coming winter going to be cold?” “It looks like this winter is going to be quite cold indeed,” the meteorologist at the weather service responded. So the Chief went back to his people and told them to collect even more wood in order to be prepared. A week later, he called the National Weather Service again. “Is it going to be a very cold winter?” “Yes,” the man at National Weather Service again replied, “It’s definitely going to be a very cold winter.”
The Chief again went back to his people and ordered them to collect every scrap of wood they could find. Two weeks later, he called the National Weather Service again.
“Are you absolutely sure that the winter is going to be very cold?” “Absolutely,” the man replied. “It’s going to be one of the coldest winters ever.”

“How can you be so sure?” the Chief asked.
The weatherman replied, “The Red Indians are collecting wood like crazy.”

Conformity in financial decisions leads to calamity!

And, so the question is are you following “Red Indians” in the financial markets?

Karl Schilling
The Advocacy Network
321-250-1445 O
321-947-3220 C
Skype: karl.schilling5

The Magic Silver Bullet Syndrome

Great wealth for little or no effort, free money, quick returns, overnight success, zero risk, risk free, GUARANTEED! This is the rhetoric of the magic silver bullet syndrome. The one consistent behavior trait that supersedes even cynicism and skepticism is the belief that one can get rich quick. This has long been the implied promise in all scams, frauds and predatory sales tactics.
When you grasp a very simple concept you can let go of this tragically destructive belief pattern. In fact the ability to be inoculated and insulated against scams, fraud and predatory sales tactics is built upon a foundation of behavioral change. The ability to change any behavior pattern relies on the foundational change of a belief. Many times beliefs become deeply ingrained and as such are sub-conscious triggers which we are unaware of. When these triggers are launched the results are a pre-ordained decision-making process which has been built upon the underlying beliefs about any pertinent information.
The simple truth is if you believe the sky is black then you will make all your decisions based upon this information, regardless of the fact that the sky is blue. You ultimately see what you believe and therefore the sky is black and no amount of evidence will shake this ingrained belief. The old adage goes I’ll believe it when I see it, but the truth is I’ll see it when I believe it. Now, of course this is a very extreme example but it highlights how the sub-conscious process works.
Beliefs about money are just as extreme, every individual has developed certain beliefs about money and all their financial decisions are made based upon their beliefs. If you have been ordained to believe that “money is the root of all evil” and to be wealthy would be destructive then you are repelling money on a daily basis and all you decisions are made with this simple belief driving your sub-conscious mechanisms.
With this awareness you can now understand the common urge to find quick money and find shortcuts to success. On a conscious basis the vast majority of individuals want to believe that there is a magic silver bullet that will take care of all your needs and get you out of any difficulties. It is simply a natural mindset to feel comfortable with the chance to win the lottery and have all the problems melt away. Of course the statistical probability of winning the lottery is just a tad above zero, but the chance is the addiction. We are addicted to chance. We want to believe and we want to win with no sacrifice, no risk and want a guarantee that if we fail we came be made whole immediately.
The reality is there is no winning without work, there is no success without sacrifice and there are no guarantees in life. One of the greatest tools in a scam artist’s tool bag is the impression that there are guarantees and there are risk free opportunities to become immensely rich and have everything you ever dreamed of. This fantasy is portrayed time and again in every commercial venture you are exposed to. It is played out emotionally in scams, fraud and predatory sales tactics though.
So what is the simple answer to this tragically destructive belief? Here it is:
There is no such thing as a magic silver bullet!
The magic silver bullet in any deal, opportunity, marketing proposals etc… doesn’t exist.
Debating interplanetary aliens, Big Foot, the Loch Ness Monster and the many other real or unreal is good for scientific and intellectual debate none of these beliefs directly endanger your financial future. (Unless of course the scam or fraud is driven around a space trip or a big foot excursion).
The existence of a magic silver bullet keeps scams and fraud alive and well. When you give up this one belief and accept that success is possible through a structured work ethic, great financial results can be had through the use of solid due diligence, intelligent use of time, capital, and rate of return you can eradicate the magic silver bullet myth. That financial success can be had through the oversight of risk profiles and how risk relates to return and how growth expands when risk, return and chance are properly executed. When you remove the magic silver bullet you can think logically and rationally. You can attach your emotional connections to the elements of your life that require strong emotional support. Money is simply a concept it is not a living breathing organism and it does not have any emotional value. Unfortunately most people have attached an emotional value to money and it is this emotionally driven impact that gets in the way of making smart decisions about money. Money can be an ally or a great misery. The choice is up to the individual.
Repeat after me: “There is no magic silver bullet”

Karl Schilling
The Advocacy Network
321-250-1445 O
321-947-3220 C
Skype: karl.schilling5
http://www.smartdecisionsaboutmoney.wordpress.com

Power of Advocacy

One that supports or promotes the interests of another is how Merriam-Webster defines the word advocate. In comparison an Advisor or Adviser is defined as an expert who gives advice. That definition should add that usually the advice from an advisor has a price attached to it.
Can you fully trust an advisor, agent, representative, consultant or any of the other many designations worn by sales people? The sales professional is a very important fabric of the capitalistic free market environment. Sadly, the vast majority of the sales industry is populated with more amateurs then professionals. The self-directed sales amateur is a perpetrator who preys on investors and consumers alike. This is the legal level of scams, fraud and predatory sales tactics.
How can you be assured that your best interests are the only concern within any transaction? Great question and the answer is having an advocate who can keep all the others honest. An advocate is a watchdog who shields your best interests in all investment and consumer based decisions.
Identifying the internal bias and conflicts of interests is not a simple process. The most prevalent obstacle to making smart decisions about money is the lack of transparency provided throughout a sales process. It is almost as if major entities go out of their way to ensure a lack of disclosure and clear transparency. This is a major mistake as it defines and creates a lose/lose scenario.
A smart decision about money comes from a consistent process which is driven by due diligence. At the Advocacy Network we define due diligence as full disclosure, complete compliance and clear transparency. Any quality financial product, investment vehicle or offer should easily pass due diligence.
So, what exactly is the problem? The major problem is that people do not have the time or the desire to complete a proper due diligence process. We are creatures of habit and we also want to trust people. The desire to trust others is simply human nature. This becomes an issue when we become lazy and allow others to use persuasive techniques to get us to alter or short-circuit a consistent decision making process.
When you have a decision making process you are shielding yourself from poor decisions. An Advocate becomes your coach in the development and initiation of a process to make smart decisions about money. The advocate is not commission or fee driven. The benefit of a commission or success based fee structure creates an unconscious bias which consistently enters into any negotiation or sales process. This is an on-going conflict of interest as the sales person’s best interest is a buying decision. The sales person gets nothing of value in a non-buying decision.
When there is an established need fulfilled by a competent solution then both parties win and value has been successfully exchanged. This would be the best result of any sales process. An advocate simply assures that the client/member is always on the winning side of any financial decision. The advocate successfully inoculates and insulates the client/member from scams, fraud and predatory sales tactics. (We are not an instead of the sales professionals, we are an addition to, geared to keep the sales professionals honest)
How do you know the advocate is trustworthy? The advocate is always trustworthy because there is no ulterior motive in the advocate’s role and responsibility. When a member pays an annual membership fee for services they are fully vested with the advocacy outreach. None of the services provided by the Advocacy Network are dependent upon success fees, commissions or advertising fees. This assures the membership that their best interests are our only concern. All of our Alliance partners are fully vetted and pass the most strict standard of due diligence.
To be fully inoculated and insulated against scams, fraud and predatory sales tactics an advocate is the only answer. When you become part of the Advocacy Network you receive all the necessary tools and information to make smart decisions about money. We provide full preventative services along with timely information about investment opportunities and the best solutions within the financial products market place.
Call today to speak with us about how an advocate can fully inoculate and insulate you against scams, fraud and predatory sales tactics.
Karl Schilling
321-250-1445 O
321-947-3220 C
Skype: karl.schilling5
advocacybz@gmail.com

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Normalcy Bias and Procrastination

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The Normalcy Bias and Procrastination

Presently there exists a uniquely positioned psychological dilemma in our financial markets. For private businesses and small cap public entities the capital markets have come to a standstill. There are no banking opportunities and now the investor side of the equation has all but dried up completely.

The major causative factor in this phenomenon is the normalcy bias. The following best describes the normalcy bias:

“A quirk of the human condition is for the mind to desire normalcy so intensely as to consciously or subconsciously disregard knowledge that is disruptive to a pre-conditioned reality. This phenomenon is an important part of crisis management and market psychology. The consequence of a normalcy bias is that warning signs of a potential crisis go unnoticed or are interpreted optimistically. When a crisis occurs people are so overwhelmed by events inconsistent with a desired reality they lose their ability to make decisions. Researchers believe when the mind encounters an entirely new experience or event it attempts to match that reality to relevant experiences of the past. If there are no matching experiences the mind enters into a kind of feedback loop resulting in passivity. This lack of action as a response to risk is called negative panic and it culminates in a dangerous inability to act assertively in crisis. In essence, the psyche struggles to come to terms with what is really happening, paralysis follows.

The afore-mentioned paralysis exists in the form of procrastination which is always a negative factor for any financial decision making process. One can always measure their loss in both the present and the future based upon procrastination. Nothing good ever comes from procrastination, it is a no-decision which is in itself a very discernible decision.

Investors of all types large, small, fat, skinny, intelligent, ignorant etc… Are suffering this malaise. Once they understand and become aware of it, they can be awakened and the ability to make smart decisions about money will return like fresh meat after a thaw.

We now have many people who are stuck in the paralysis by analysis cycle, this is why so much money is on the sidelines and people believe they want to stay in cash. By treating the symptom we will not cure the disease. The core of the procrastination is the normalcy bias, which is being promulgated in a continuous state of unawareness.

The initial step in correcting this psychologically driven procrastination cycle is to overcome the fear of change. Just as the normalcy bias overcomes individuals in disaster based crises, it now exists due to the ineffective awareness of a permanent changing economic environment. Everything old will not be new again. Gone are the days of happily reminiscing for a return the good old days of the past. We have recycled into a global economic trend and investors need to start embracing the way opportunity will present itself in this type of environment. Of course it will look, feel and be abundantly different. Old trends have become meaningless and provide no benefit for any forethought into smart decisions about money.

Not only do investors have to make this leap, but investment advisors, financial planners, family and business advisors such as CPA’s etc.. all need to make the leap as well. The ostrich approach to sit around and wait until things return to normal is a sure-fire failure driven approach.

The second step once fear is lifted is to practice a counter-intuitive approach to investment observation. Plain vanilla investment approaches will not keep you above water in the present financial environment. The need to embrace alternative investment opportunities is paramount to financial survival. Understanding the motivation of Wall Street institutions and their direct connection with government impact on the economy becomes more necessary than ever before. Your investment success is now mandated upon several additional factors including geo-political factors that impact the entire universe of industries and investment sectors. How does taxation, regulation and government oversight impact the entire industrial universe has to be taken into account when looking at any single business entity within that specific universe.

These are big changes and they are difficult adjustments for investors and consumers alike. By embracing these changes and fearlessly diving into the new financial market place you can master the on-coming surge of great opportunity and successfully overcome all obstacles in making smart decisions about money. What you cannot afford is the infinite losses assured through procrastination.

Learn the Psychological Triggers that will inoculate and insulate you against scams, fraud and predatory sales tactics.

http://www.karlschilling.com

Value of Research

 

The truth is the free market has always been the staple success of capitalism. There market allows for winners and losers, of course there are many market manipulations that have long permeated the scene. These manipulations have broadened the loser pool in order to enrich a small group of winners.

There is a reason for successful manipulation though and it is in the basic premise of laziness. Unfortunately for losers they are simply lazy and dependent which turns them in to investment victims. The manipulation I am discussing here is perfectly legal and it plays within the rules, yet it is a tilted game and the losers are unaware they are being manipulated.

So what is this manipulation and how does it occur? The simple answer is financial media. In general investors rely upon many different levels of financial media for their information. Most of the time this information touted through the financial media is enticement for investors to buy whatever in order to enrich those who have paid for the media platform. If you as an investor rely on the pundits who are paid via advertising, or even company remuneration then you are receiving biased information meant to entice you to use your money at the risk level and allow others to have a risk free ride on your losses. This is simple supply and demand and it shows itself in the concepts such as pump and dump schemes and the oldest loser in the history of the markets which is buy high and sell low.

So how do you get a fair chance at making money in the markets? The answer is the old fashioned way. Your research should begin with basic business principles on how good companies become great. From that platform you can then look into industries and sectors that are leading the way. Once you have this basic education (all of which can be self-taught) you will reverse engineer the process. By reverse engineering you will start top down, which is looking at industry first, then the overall market for that industry drilling down until you find companies that are leading market share in those specific industries. Once you land on these companies you begin to reverse engineer their internal fundamentals and then their stock history.

This sounds like a lot of work and in some cases it is, yet this work is non-biased (of course you will have to identify your own personal bias level, but that is another story line) and it will be work that pays off in your financial decision making process.

Now, the information you need is all available in public filings for any companies you want to research and there is incredible amounts of information available on industries and sectors as well. (Simple Rule #1 is NEVER invest in a company that does not produce public filings) All the information you need is readily available and if you can read and comprehend some basic tenets of markets and business you will be able to identify your own winners. In doing so you are providing a reasonable risk profile for your investment opportunities. When you rely on others for these decisions you are increasing your risk profile by taking on the potential underlying bias and conflict of interest that is under the surface. This invisible manipulation is what introduces you to a zero sum game in which you have been set up to lose by design.

Does this mean you dismiss your advisors or brokers? NO, it simply means you have a process to vet their recommendations. If you find that their recommendations continually fail your due diligence process (research) then fire them and find new professionals to work with. The point is to uncover and reject manipulation when it appears.

Lastly, the financial periodicals ( I won’t name them, but you can find them on any newsstand) including the penny stock, small cap issues that appear in your mailbox are all PAID for and have underlying motives. Those motives are simply to tout the companies, funds etc.. that pays the most for the ink on the pages. In the case of the freebies that appear in your mailbox these are often paid for by non-affiliate shareholders of the company being touted. These shareholders are often paying for the media piece in order to solicit buyers who they can sell off to while watching the stock rise on the back of the new buyers.

The end game is your money deserves the best chance for success, this is always dependent on your making smart decisions about money. The best chance you have is to do your own homework.