Story@BFBV: The Story of the Three-Legged Stool

I love this story of Cialdini's Three Legged Stool. The stool is stable because it has three legs. Take one away and it will fall. However, this magical stool does not fall because when one leg is taken away, another one grows to replace it. The human mind pretty much works like the three-legged-stool. You… Continue reading Story@BFBV: The Story of the Three-Legged Stool

Story@BFBV: The Swallow and Other Birds Story

It happened that a Countryman was sowing some hemp seeds in a field where a Swallow and some other birds were hopping about picking up their food. "Beware of that man," quoth the Swallow. "Why, what is he doing?" said the others. "That is hemp seed he is sowing; be careful to pick up every… Continue reading Story@BFBV: The Swallow and Other Birds Story

Story@BFBV: The Leon Festinger Story

Leon Festinger came up with one of the most brilliant ideas in social psychology: Cognitive Dissonance - the engine behind self justification of dumb things. Watch this video: When people have two contradictory thoughts in their minds, they experience dissonance. The pressure to resolve that dissonance arises from the uncomfortable feeling of holding contradictory thoughts… Continue reading Story@BFBV: The Leon Festinger Story

Story@BFBV: Chains of Habit

Mr Buffett once said, "Chains of habit are too light to be felt, until they are too heavy to be broken." Its very difficult to break a bad habit and therefore terribly important that you form the right mental habits early in life. The chains of which bad mental habits are you a prisoner of?… Continue reading Story@BFBV: Chains of Habit

Story@BFBV: The Fog of War Story

Everyone should watch Robert McNamara's "The Fog of War." I particularly liked Lesson # 7 ("Belief and Seeing are both often Wrong") which deals with confirmation bias. According to McNamara, people see what they want to see. In this particular case, US Navy "saw" torpedoes when there weren't any, and that led to the escalation… Continue reading Story@BFBV: The Fog of War Story

Story@BFBV: The Near Miss Story

Did you hit too far to the right of the bull's eye? Next time, aim a bit on the left. In a game of skill like shooting, a near miss provides useful feedback to the shooter. In a game of chance, near misses have no information. If you miss winning the lottery ticket by one… Continue reading Story@BFBV: The Near Miss Story

Story@BFBV: A Story About Destiny

Digital Cameras turned the photographic film business into a niche. Mobile phones are killing the fixed line telephony business. There are many more examples of gradual extinction of business models. Some trends are mean reverting, others are destiny. Who are the people who are unable to see the "writing on the wall?" Those who are… Continue reading Story@BFBV: A Story About Destiny

Story@BFBV: The Bystander Effect Story

We don't just copy actions of "similar others," we also copy their inactions. That's social proof, and part of the reason which explains the bystander effect. The other reason is the idea that responsibility gets diffused when the number of bystanders increases and people don't act assuming that someone else would act. But there are… Continue reading Story@BFBV: The Bystander Effect Story

Story@BFBV: Four True Story Books

Disraeli was right but that does not mean YOU have to prove him right as well. Read these book for they tell you a lot about human nature which hasn't really changed much. John Templeton once remarked that the four most dangerous words in investing are "this time its different." Read these books and you… Continue reading Story@BFBV: Four True Story Books

Story@BFBV: The Anchors Story

Our desire to latch on to the wrong anchors causes us to make mistakes. A Rs 17 stock could be more expensive than a Rs 543 stock. The 17-rupee one may have billions of shares outstanding causing the aggregate market value to be very high when compared with its assets, earnings, and cash flows. An… Continue reading Story@BFBV: The Anchors Story