Law 101 Meets Psych 101

Steve Saville has a post out called Don’t Think Like a Lawyer. In the post he notes the following…

“The job of a judge or juror is to impartially weigh the evidence and arguments put forward by both sides in an effort to determine which side has the stronger case. The job of a lawyer is to argue for one side, regardless of whether that side happens to be right or wrong. As a speculator it is important to think like a judge or a juror, not a lawyer.”

While I often talk about the same concept in psychological terms (subordinate ego, bias and automatic thinking regimens in service to one simple goal; being on the right side of markets) the lawyer analogy works as well. Lawyers often argue cases that are lost causes; that is their job. The market with its millions of inputs from man, machine and casino patron alike is the judge and jury because it renders the verdict to any given stance.

I prefer the psychological way of looking at it, however, because psychology is more interesting to me than law. But more to the point, it is personal psychology that makes some people act like lawyers in defense of their stance at any given time. In other words, personal psychology is behind the tendency to act like a lawyer in defending positions but a lawyer’s practice has little to do with human psychology.

Years ago I introduced my little robot friend here as a way of indicating that the guest writers selected for Biiwii.com were anything but robotic info-feeds (folks, being in the financial media sphere for 13 years now I can tell you without a doubt that the business has grown in that span into one giant cluster of automatically served articles, most of which are paid content in one form or another with the goal being your clicks and eyeballs, not to inform you with actual unique or beneficial material). Later I used Mr. Robot to make a point in an article about investor psychology called Deprogram Yourself.

We – with our egos that tell us we can’t possibly be as dumb as the crowd – think that we are immune to the mistakes that the other guy routinely makes. In some cases that is true. I suspect you, if you have taken the time to read this far, are probably an astute market student. But it takes a lot of work to come to the point of acting as an effective judge and jury to the benefit of your capital.