Thoughts On Herds1
I didn't realize a friend (okay, web acquaintance, but friend to me nevertheless) worked on a trading floor but he recently recounted the following:
In the '80's I was working as a trading floor operator for a stockbroker. For most of the 80's stocks went up - and quickly too! Then, in the late '80's something amazing happened, the stock market fell massively in a single day. Overnight, the fortunes of thousands of people had been dashed. I remember being on the trading floor that morning with emotion, people, and cameras everywhere. At one point I looked up into the viewer gallery and I saw an old man crying uncontrollably - an image that will live with me forever. It was not a good day for a lot of people.
Only a couple of months prior to the stock market collapse I was having dinner with my boss and he taught me an important lesson about herd mentality, he said this:
When your taxi driver starts giving you tips on the stock market, it's time to sell everything you own.
This tip taught me more about the real nature of herd mentality than anything that I'd heard before or ever since.
They are pretty riveting words, especially for a fellow like myself who has always felt more excitement about crowds and what is current. For many people like me it starts with affection for pop culture and morphs into a fear of not "getting the memo." All it takes is meeting someone who is trapped in time to get a sense of clarity over how pathetic that can be. Whether it's your racist grandparent or the person who considers themselves different for refusing to carry a cell phone, it's annoying.
On the other extreme are the people who are so wrapped up in the movement of the crowd that they lose their perception and agonize over what is simple, trivial fashion. More than a few times I remember playing some music for a person and experiencing a distasteful expression on their face and then, after a few months when a song is played on a "popular" radio station, they are bopping their head and laughing over their first encounter. While it's easy to laugh at how a musical taste can be directed by radio disc jockeys and the marketing guy with a spreadsheet, it is horrifying that this is the approach people use towards their values.
What interests me most on the subject of herds is how we develop a sense of trust in ourselves. I've always liked people who not only show awareness of what is happening around them, but also know how to move - yes, let me bash the metaphor a bit - to their own internal rhythm. From my observation what makes some people exceptionally good at a judgment call is in part their ability to gather information (research) about the thing to which they are applying their judgment. The other part, however, the part which I think vaults them over the crowd is being interdisciplinary. Which is to say that they can apply a thought, a trend, an analysis, a reaction - the totality of their value system - in many different directions to balance it out.
Steve Jobs did a keynote a few years ago for Stanford, taking students through some of the things that brought him "success" in his life and he made the following comments about an interest in many things:
"Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something2: your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life. "
Another observation I've had over time is that not only are the people who transcend the herd mentality interested across disciplines, but they seem to make their values work by sheer force of being. It's not really that vague or frou-frou of an observation if you think along the lines of Michael Jordan3 playing basketball. He just plays basketball: that's what he does. If it were the most unfashionable, unpopular thing in the world to do, he would. I suspect that these days, even though he doesn't get paid his old astronomical salary, he still shoots around and - if the competition is right - finds it difficult to walk away from a pick up game.
I had a friend once who would separate the things he did for money with his existential definition for himself by answering occupational questions with "I'm an artist." No matter that his income came from a completely different source, or that what he did many people wouldn't call "art" by their own definition. And he couldn't be something else, even if he spent most of his time teaching people how to use software and writing code.
Many people make a distinction between what they "do" and what they "are." I would argue that when this separation is made for many folks, the "doing" aspect of the duality becomes largely formed by default because a separation like that dilutes the stake we place in our action. There's subtlety involved but I hear it a lot in conversations: "I am David. I do programming. I am a homeowner."
We are, of course, many things. I'm a spouse. A homeowner. A brother. A programmer. A reader. A comic book collector. But this reveals a key: when you trick yourself into making something about who you are, you raise the stakes. When you raise the stakes, you look deeper. When you look deeper, you aren't as sidetracked by the crowd as you are in being.
Sometimes what we are becomes victim to the herd. I spend a lot of time reading blogs from winners of the "dot com" era; people who had good ideas and made enough money to retire to a comfortable life and what they found interesting. But I know that there are lots of people who not only had great ideas but were also quite gifted that were victims of the bubble.
What's external is often misleading and I'm sure that what contents many of the people who went down with bust of the stock market is that they keep doing what they do, being who they are. I'm sure their malcontent comes from having to leave who they are in order to take care of the responsibilities of regular life. A malcontent well placed, I think.
So back to the notion of the herd: bucking groupthink seems to be a matter exposure, values, and a well of trust for ourselves. I often feel shaky about who I am; my brave new world involves lots of moving parts that leave me looking for precedent in a well trodden path. If only life consisted of a single decisive moment from which to claim victory. The reality is that of a video game: obstacles to jump, giants to knock down, things to wrangle, and whether you win or lose it just keeps advancing from level to level.
My friends amaze me as the type of ideal I write about in terms of sniffing out their own path and keen, well-developed values. How do you come to trust yourselves? Are there such things as good herds? How do you exploit the herds around you?
1Sorry if this is "preachy," I intended it to sound more exploratory. I'm trying to get back to writing and forcing myself to post it despite not feeling satisfied with it.
2Some people I know would have difficulty with this and think Steve is saying something (shock! outrage! anger!) Relativist. What I believe that what Steve intends for you to understand is that the action makes the difference, not necessarily your reasoning. You can attach what you like to that, but I think for the most part it's true and the effects show.
3Or Lebron. Or Tiger. Or [insert gifted athlete unparalleled in competition].
1:04:21 PM 
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