Prof. Sanjay Bakshi once observed —
People in the investment community are often too judgmental about developments. They forget the Pari-mutuel nature of markets where the behaviour of others changes the odds. They indulge in first level thinking and don’t pause, reflect and ask questions like “and then what?” If the development is unfavourable, the pain avoidance mechanisms in their brains make them run away from a situation which is getting even more attractive because others are running away.
And Then What?
“And then what?” is a very important filter for robust decision making.
Every action has consequences: intended and unintended. No matter how carefully we plan, we can’t anticipate everything. We live in a universe governed by multi-variate cause-effect network. Focusing on one variable can almost always distract you from the unexpected side effects.