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Reality: Your beliefs Michel Pireu     | Business Day Tuesday, November 20, 2018
“Remember the order in which we form abstract beliefs: 1. We hear something; 2. We believe it; 3. Only sometimes, later, if we have the time or inclination, we think about it and vet it, determining whether or not it is true. ‘Wanna bet?’ triggers us to engage in that third step we only sometimes go to.” - Annie Duke.

As a 'belief engine', the brain is always seeking to find meaning in the information that pours into it. Once it has constructed a belief, it rationalizes it with explanations, almost always after the event. The brain thus becomes invested in the beliefs, and reinforces them by looking for supporting evidence while blinding itself to anything contrary. Michael Shermer, the psychology professor who founded Skeptic magazine, defines the process as “belief-dependent realism” — that what we believe determines our reality, not the other way around. He gives the names 'patternicity' and 'agenticity' to the brain's pattern-seeking and agency-attributing propensities that underlie the diverse reasons why we form particular beliefs. Rather than making us rational and deliberate thinkers, however, patternicity leads us to see significance in mere 'noise' as well as in meaningful data. Consequently, as Niell Gamain put it, “I can believe things that are true and things that aren't true and I can believe things where nobody knows if they're true or not. I can believe in Santa Clause, the Easter Bunny … and Mister Ed.”

Once formed, our beliefs become ingrained in us. We take them for granted, and assume them to be factual, whether or not they actually are.

Our beliefs determine if we consider something to be right or wrong, as well as what we consider to be possible or achievable - hence their impact on our investment decisions. Where, to again quote Gamain, “anyone who claims to know what's going on will lie about the little things too.”

 
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