Imagination Inflation

we have heard of inflation , What’s this Imagination Inflation ?

Well have you come across a group of old friends talking of old memories in your college days Or school days , while talking a faded memory about a mischievous event or a embarrassing event that is being discussed can be said by a few friend in a slightly different way than what had happened originally ( with or without knowing they are manipulating the event ) So after this your mind is filled with the new hypothesis of the old event that your friend has told and hence after when you talk about that particular memories you tend to include the new Hypothesis set in your mind rather than the original as it is version ( old memory ) this is an Imagination Inflation

I had read Make it stick – Peter brown earlierand in that he mentions this bias or fallacy . Well it can be brushed away if it’s an normal event , but what will happen if you’re blinded by such thoughts when stakes are high !

Let’s see how psychology affects you in investing or for that matter in any decision making process .

I was discussing about a Investment idea with a friend of mine in a group . As we progressed we came finally to what’s the Intrinsic value of the business and finally we arrive at a value which says a X number which we agreed upon but another friend told us a Hypothetical event that could change that value we arrived at in that scenario which we just imagined but as it was pure hypothetical we did not mind . Due to some reasons I felt I was not comfortable with the margin of safety and kept it on hold basket . when I again visited the thesis a year after the Hypothesis set by a person which we imagined by us became a sort of reality (but actually did not happen ) we started believing that hypothetical event had happened in reality which altered our actual intrinsic value of the business which again blinded us !

Here’s the trap set ! After reading Make it stick book I can recollect my flaws and mistakes and started eliminating them in my decision making process ( intrinsic value is explained by so many blogs and each has their own way of doing it so let’s concentrate on the psychological part )

“Hypothetical Events imagined vividly after a few months or down the road you will start thinking that it has happened “

How does this affect your career ? Your ambition ?

Well Spanx Founder Sara Blakely said that she got the idea about SPANX when she was working but never even revealed the idea even to her family until she got a shape of the idea into reality ! Why what she did was right ? Shouldn’t see discussed it with friends ! Well with some assumptions and probability we can say it might have delayed or not happened at all if the person dissuading you is a very strong influencer in your life !

Well again it’s imagination Inflation or Anchoring Bias anyone could have discussed by speculating on a no of reasons about your own self and could have put the whole idea to a jeopardy ! That’s a clever tactic to stay away from people with negativity !

You could have had a wonderful business idea which your friend or Family members or a person who doesn’t like your success could set a Hypothesis in your mind like

You have done so many projects this can be like that too so give up and go to work

You’re not a good entrepreneur

You’re never going to succeed this way

90 % this is what you will hear , well that’s a test for your persistence my friends !

Many events may happen where you may not have a good odds while down your struggle and could make you think what my friend or mr x told is happened ! If you think that way well “Welcome to the Imagination Inflation club” So high time avoiding negative people , avoid their talks and their advices !

So what I do is ” I keep a handful of contacts but only a finger-full of friends”

Read my earlier blog on ” Persian messenger syndrome” if you know what to avoid then everything else will work perfectly well – I have use this in 2 years and don’t be shocked my life has had a tremendous change !

“All I want to know is where I’m going to die so I will not go there ” – Charlie Munger

End of day if you’re a inner scorecard guy who knows what you should do rather than other la tell you what to do then you will end up way better !

See ya all with a different and more difficult problem to solve next time !