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April 21, 2014

Andrew Silow-Carroll: Passoverkill? Suggestions to make next year's seders even more culturally sensitive

Sara Israelsen Hartley: Seeking the Divine: An ancient connection in a new context

Christine M. Flowers: Priest's execution in Syria should be call to action

Courtnie Erickson: How to help kids accept the poor decisions of others

Lizette Borreli: A Glass Of Milk A Day Keeps Knee Arthritis At Bay

Lizette Borreli: 5 Health Conditions Your Breath Knows Before You Do

The Kosher Gourmet by Betty Rosbottom Coconut Walnut Bars' golden brown morsels are a beautifully balanced delectable delight

April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

Putting a gap between you and stupid

By Morgan Housel





Try these techniques . . . for your own good


JewishWorldReview.com | New York Times columnist Carl Richards has a great saying. A financial adviser, Richards says, is someone who puts a gap between you and stupid. The smartest investors in the world are tempted to do dumb things with your money. An adviser's job is to look you in the eye, shake his or her head and walk you back from the ledge.

Every investor needs someone like this. But how many of us have one? Few. Most of us have the opposite. We seek out people who agree with our ideas, cheering us on and holding our hands straight off the stupid cliff.

Keep that in mind, and meet David Rosenberg.

Rosenberg is an economist with Gluskin Sheff in Canada. He's on TV a lot, is usually pessimistic and has somewhat of a cult following among bears. A lot of his calls were wrong in hindsight, given the five-year bull market. That's nothing against Rosenberg. He seems like a smart guy. Forecasting is just hard.

Now Rosenberg is changing his tune. He's turning more bullish on stocks and the economy.

Some of Rosenberg's clients are furious. Why? Not because his timing was off, but because he changed his mind at all.

"Cancel my account, and tell Dave I don't recognize his work," one client wrote, according to The Wall Street Journal. "He used to be the straightest shooter out there ... it is too much for me to have another cheerleader," wrote another.

These clients weren't paying Rosenberg to analyze the economy and provide an objective forecast. They were paying him to confirm their pessimism. Now that he's bullish, they want nothing to do with him.

"I'm finding out that a lot of my loyal readers were never really interested in my analysis," Rosenberg said last week. Next stop, Stupidville!

There's a name for this: confirmation bias. It's the tendency to seek out and glorify information that supports our existing beliefs and ignore and discredit information that goes against them.

It's incredibly powerful. During the 2004 presidential election, psychologist Drew Westen of Emory University and his colleagues studied the brains of 15 "committed" Democrats and 15 "committed" Republicans with an MRI scanner. Each group was shown a collection of contradictory statements made by George W. Bush and John Kerry. Not surprisingly, the partisans were quick to call out contradictions made by the opposing party and made up all kinds of justifications to rationalize quotes made by their own side's candidate.



But here's what's scary: The participants weren't just being stubborn. Westen found that areas of their brains that control reasoning and logic virtually shut down when confronted with a conflicting view of their preferred candidate. He explained in the book "The Political Brain":


"When confronted with potentially troubling political information, a network of neurons becomes active that produces distress. ... The brain registers the conflict between the data and desire and begins to search for ways to turn off the spigot of unpleasant emotion. We know that the brain largely succeeded in this effort, as partisans mostly denied that they had perceived any conflict between their candidate's words and deeds ...

"Once partisans had found a way to reason to false conclusions, not only did neural circuits involved in negative emotions turn off, but circuits involved in positive emotions turned on. The partisan brain didn't seem satisfied in just feeling better. It worked overtime to feel good, activating reward circuits that give partisans a jolt of positive reinforcement for their biased reasoning."


The bias that causes people to write off an opposing politician while defending their own is the same one causing David Rosenberg's clients to flee. In each case, people aren't looking for someone who can reason and think rationally. They just want someone to confirm whatever they already believe. In a constantly changing world, this is one of the surest routes to deception and bad decisions.

CEOs do this, too. In one fascinating study, a group of researchers from Cornell showed that CEOs who surround themselves with colleagues who shell out praise and flattery are more confident in their decisions, less likely to peruse strategic change and ultimately more likely to be fired. Former Lehman Brothers CEO Richard Fuld "surrounded himself with every type of yes-man and woman you could possibly get," says author Lawrence McDonald. No one challenged his views, at least while remaining employed. The result was a colossal blindness toward risk.

So, what can we do about it?

Follow Carl Richards' advice. Find someone who puts a gap between you and stupid.


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I think one of the best things anyone can do in investing is find someone who disagrees with your views. If you're a bear, find a bull. If you like bonds, find someone who doesn't. Seek them out and make them your best friend. Spend more time with them than the people who agree with you. Listen to them carefully. Take what they say seriously.

This is devilishly hard. But when you force yourself to do it, you will be shocked at how much more you learn from people who disagree with you than those who share your views. It forces you to accept that things are usually more complicated than your gut reaction makes them out to be.

I used to be in the hyperinflation, dollar-is-going-to-crash camp until I forced myself to read the other side of the argument and realized it made more sense. Assured the financial crisis would doom the economy, I was tempted to sell most of my stocks in late 2008 until a friend walked me through the history of the Great Depression, noting that stocks did spectacularly well for those who stuck it out. In both cases it was hard to listen to the views of someone I fervently disagreed with. But in both cases, the other side was right. I'm so glad they put a gap between me and stupid.

Try it yourself.

Sign up for the daily JWR update. It's free. Just click here.

Interested in a private Judaic studies instructor — for free? Let us know by clicking here.

Comment by clicking here.

Morgan Housel, a columnist at The Motley Fool, is a two-time winner, Best in Business award, Society of American Business Editors and Writers and Best in Business 2012, Columbia Journalism Review.


Previously:


8 fascinating financial insights from latest Nobel Prize-winner

Investing like a psychopath

Why you're so bad with your money

8 questions you might have about the debt ceiling

An open letter to everyone under age 30

15 biases that make you do dumb things with your money

If this scares you, you shouldn't be investing

What I plan to do when the market crashes

The three most important words in investing

Monkeys and investing

Two types of risk, two types of bubbles

The secret to financial success: Use ignorance to your advantage

How to effectively fight investors' greatest enemy

Four mistakes that make everyone a bad investor

Learning from the past, and the Next Big Tren

What newspapers were saying when you should have been buying

Why you never learn from your investment mistakes

The curse of success, and why most mutual funds fail miserably

If you know only five things about investing, make it these

Why spotting bubbles is so much harder than you think

When smart investors do stupid things

The deep downside of home ownership

The biggest retirement myth ever told

He's rich, smart and old: Listen to him

Admit it: No one has any idea what's going on

Gold collapse: The start of something big?

BAD NEWS: EVERYONE IS RIGHT!

Twitter: The carnival barker of investing

Warning: Don't waste your capital being fooled by profit prophets

25 important things to remember as an investor

New paradigm for both drivers and car companies

Biases that make you a bad investor

Nine financial rules you should never forget

Gaining from financial destruction

How to read financial news

Housing: Partying like it's 1925

A rebuttal to student loan horror stories

CONGRATULATIONS: We just saved half a trillion dollars

End this crazy tax: It will boost the economy

Medicare: A dangerously good deal

Economic future looks bright

The Biggest Threat to Your Portfolio (It's Not What You Think)

Bond Market Bull Run dead at 30



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