I am supposed to remind you to think and
turn on your brain and pay attention to
subtle cues like what I am wearing how I
am speaking the fact that I have worn
glasses the colors that I have chosen
thank you to my wife for dressing me and
then I will ask you how does it make you
feel thank you and in fact the manner of
speaking the entire delivery awkward how
many by show of hands would say that
this would meet the expectation for
somebody speaking on this red dot lots
of hands I want to introduce you to
something that I call the think feel
conundrum now again audience
participation by show of hands how many
people have ever had a time where they
feel like their heart and their brain
just couldn’t agree and I think that how
many people can’t raise their hand
alright so we know this happens the
question is why before we get any
further I want to clarify something
we’re going to talk about feel today
feel is a vague enough term that it’s
important to identify because emotions
are a form of feeling but I’m talking
about feeling like that gut feeling when
you say I just go with my gut because I
don’t want you to get the impression
that the emotions are somehow negative
emotions are exceptionally valuable in
how we process and interpret information
and how we develop relationships with
each other so do keep that in the back
of your mind
the vocabulary of the day when you see
feel it means feeling with your gut
going with your gut and there are plenty
of times when our gut gets it wrong the
question is why
first understand our brains were you
aware that sitting between your ears is
a supercomputer if you measure the
number of processes per second that the
human brain is capable of managing it is
that of the most sophisticated
supercomputer ever built and the amazing
piece of information is that that
supercomputer will require a knop energy
to power approximately a thousand
households and your brain does it on
about 20 watts the barn on superpower
winner for processing per watt in the
known universe capable of processing up
to 10 quadrillion pieces of information
per second and that is actually the low
estimate and you know what that tells me
means we’re capable of making mistakes
really fast
I know because I’m guilty of them
understand how your brain operates with
ten quadrillion processes per second
it’s not possible off to be consciously
aware of all of the data that we’re
managing
in fact our conscious mind only manages
about five percent of what we’re doing
the subconscious mind takes over for the
other ninety five percent and we’re
happy to have it do that in fact for
everybody that just came here after
lunch we had a bunch of conversations
going on simultaneously how is it that
you were able to listen to the person
you were speaking with and filter
everything else you still heard it if
you actively turn the filter off you
hear all the conversations and yet our
brain is capable of zeroing in on the
critical piece of information that we
want at that time the subconscious takes
over you don’t even think about it we
process information on a number of
levels I will define them as mechanical
emotional and intellectual mechanical
things that you can play intellectualist
things that you will process addition
subtraction and so forth and then
emotional would be again those
experiencing things that we deal with
most of us believe that we process data
pretty well right you think I need to
make a decision
I will reasonably validate this data I
will come to a very accurate response
and because I’m so talented
I’ll be right what do we really do we go
right below the conscious line and our
subconscious takes over and it does the
heavy lifting for us and we shortcut the
response now the shortcuts are what’s
dangerous because we all know shortcuts
are convenient but sometimes they fool
us so I’m going to ask the audience to
participate in a couple of things so
while you are finding the handout I’m
going to give you an example of
something that your brain does
automatically that you’re very happy for
the first one is the Mexican dinner
theory now if you’ve ever been to a
Mexican restaurant and ordered the
burrito because burritos
they always bring out the plate and what
does the waiter universally say careful
because the plate is hot thank you glad
you nailed that one
and there are two kinds of people in the
world
person number one says thank you person
number two says ooh you’re right
incidentally the difference between
wisdom and experience what happens when
the person touches the plate
you immediately jerk your hand back
before you even know it hurt as soon as
it’s hot you have a nerve impulse
traveling at almost 400 feet per second
just shy of 300 miles per hour traveling
up to your mind but before you even
process it and send it back down you’ve
already pulled your hand away it’s a
reflex response it’s a shortcut it’s for
safety now how many people have ever
touched something cold and had the same
reaction or my favorite how many people
have ever waded into the water at the
beach and something brushed against your
foot and you jumped a mile out of the
water when you’re not expecting
something it’s a safety mechanism you
look down and you realize it’s nothing
but I overreacted our brains do that
constantly so this is the audience
participation part I want you to look in
I’ve given everybody a handout for those
of you watching online or on youtube
we’re going to do something clever stop
watching that we’re going to look at
this piece of paper and all I’m going to
do is on the right hand side I’m a draw
click X and you can do the same at home
any sheet of paper will do and then
about five inches to the left of the X
draw a dot were you aware that you
actually have a physical blind spot in
your eyeball it’s where the nerves
connect you can’t see it but just like
everybody smartphone when you take a
panoramic picture your eyes take the
information that’s available to them and
they fill in the blanks so that you do
not perceive it but we’re gonna find it
together okay so what you’re gonna do
first is let’s take the paper you’re
going to hold it up start by touching it
to your nose
take your right eye and look at the X
and close it and then you’re gonna pull
it back staring at the X there’s gonna
be a point somewhere and you’re probably
gonna want to get it far as far the ride
as you can see pull it in there and that
dot will disappear I’m just a few people
getting it right it goes away that’s the
part that your eye can’t see when you
open the other eye a tree appears magic
right it does it automatically so we’ve
done now we’ve seen that we have a
reflex reaction our brain will interpret
data for us automatically let’s play
another game I’d like to do some math
with everybody because we’re all sharp
right and math won’t lie so let’s do
this problem together real quickly I
have a baseball bat in the ball the bat
and the ball together cost a dollar ten
the bat cost a dollar more than the ball
how much does the bat cost as quickly as
possible
okay I’ll heard a lot of answers who
said all right how much does the
pitchers which one was which how much
does the bat cost no ten cents five s
who said five cents it’s correct it is
correct the bat costs a dollar more than
the ball five cents and a dollar five
together cost a dollar ten now be honest
how many got the math wrong it’s not
because you don’t know how to do math
it’s because you take mental shortcuts
and we all do it so what does this mean
in real life well first of all it means
we need to be aware of how we make
decisions because I already talked to
you about mechanical and now
intellectual what happens when we make
emotional mistakes it can be a disaster
well we could try to measure on a social
scale and it’d be really difficult so
I’m gonna go back to something that I am
a little more familiar with by trade I
work in the field of Finance so we track
the numbers and what we found is that
investors consistently make mistakes I
know because I did this in fact I turned
what could have been
an in-state college fund for all four
years into a couple of semesters yeah so
that is the voice of experience here
right the question is what do you learn
what we learned in general is that
investors underperform their benchmarks
consistently on average company called
dal bar tracked this for over 20 years
and it’s been a study that’s been going
on rolling 20-year periods the most
recent data Kamath Ian came at the end
of 2016 but you can track this back for
almost 30 years now and the results were
consistent what happened well investors
consistently made this decision right
about the time to feel good because the
economic cycle is doing fine is when
everybody decided to buy and then the
markets promptly turned around and went
down and at first everybody said well
maybe it’ll be okay then oh I’m not so
good and then we do what we
professionally call freak out and at
that point people would sell down here
now how do you make money as an investor
this is not a sophisticated question you
want to buy low and sell high and what
were people doing the exact opposite no
did they mean to do this no was it the
wrong decision yes was it the normal
decision absolutely the question is why
let’s understand how we deal with
decisions real quickly first of all when
you are otherwise unstressed or maybe a
little bit stressed but capable of
managing it you process information
actively and above the line to make a
decision what happens when you get
really stressed you drop below the line
and use shortcuts and the problem with
shortcuts is they sacrifice accuracy for
speed so if we are sacrificing accuracy
f’s accuracy for speed we are now in the
fight-or-flight response it makes sense
that we would make immediate reactions
and they are reactions not responses to
the data our subconscious is doing the
heavy lifting so no problem right will
simp
we make sure that we are making
conscious decisions what happens when we
find ourselves believing that we are
making conscious decisions but they are
in fact being misinterpreted
welcome to the data danger zone where
our emotions are filtering things and we
are not actively aware of it how do we
do this and why by show of hands how
many people believe that you are biased
I am grateful that I’m seeing lots of
hands because I got to tell you if you
didn’t I will introduce you to our first
bias it’s called the blind spot we’re
biased because our brains are constantly
learning when I started this talk what
did I use no cards every one of them
blank it was simply to give you an
incongruity point your expectation was
better when you don’t have the
expectation met you find yourself in a
state of cognitive dissonance and your
brain is saying well where does the
cognitive dissonance come from it’s all
built upon previous experience if you
don’t recognize that you’re staring at
your blind spot just like that eyeball
you know there are lots of biases out
there we’re just gonna highlight a few
that you need to be aware of 9 out of 10
dentists agree this toothpaste is the
best right
remember that’s the bandwagon effect or
what we would call consensus bias and I
think we can all agree that the world
used to be flat nine out of ten people
would have told you the earth was flat
just because the group thinks it doesn’t
make it right confirmation bias you’ve
had that argument on Facebook with your
crazy cousin who believes the opposite
of your political belief and Springs all
the data and what do you do you go out
and bring a dozen other websites in that
prove your point
confirmation bias you only look for the
data that agrees with what you want to
see overconfidence biased I’m right
because it’s me how many people are
above average drivers in this crowd
right if you’re raising your hand you
might have an overconfidence bias
somebody’s below average we can’t all
raise our hands and another favor to
mind the halo effect business
professionals be wary if you’ve ever
been golfing with somebody and they’re
great at golf and you believe that
they’re great at everything that’s the
halo effect it’s also the idea that
pretty people must be more talented
maybe not probably not I don’t know but
I will tell you that that is a halo
effect so what do we do well first you
gotta recognize when you’re processing
data that your subconscious wants to
inform using your experiences you have
to actively reach below that line pull
it back up and scrub the data how I’m
going to give you a very simple process
I’m gonna divide data into two primary
types objective and subjective
subjective data is easy you get to
measure it hot cold tall short all
relative to your own perspective
objective data stuff that you measure
with an independent source and then tell
me are you actively processing that data
are you using your gut because when
you’re actively processing object of
data you’re on pretty firm ground we can
call that stuff rock metaphorically
subjective data that we are processing
actively and trying actively to get good
decisions with we’ll call that dirt
because it’s still firm and it will
brush-off if we make a mistake but it’s
not as firm as the rock is it because
it’s subjective but when you get below
the line we get into the caution zone in
the danger zone objective data that we
are using our gut on is where we get
fooled so be careful subjective data
where we are using our gut there’s where
we can get trapped and I call this the
quicksand quicksand zone and this is
also the stuff you want to be careful of
if you’ve ever had a episode of road
rage or washing out your kids because
you’re mad something like that
you are not processing the data you are
reacting to it so be aware
finally why because when you are
actively processing you’re engaged in
the process when you are not you are
much more easily manipulated we live in
a world where the media is busy selling
you everything why if you’re not paying
for the product you are the product so
they edit Oriya lies the news to get
below the line to attract your attention
things like silly little shiny objects
why would I point this out because it
commands your attention and every one of
you picked up and engaged in the process
with me why as a credible source you
would simply follow me because I asked
you to so I will ask you in the future
to do this when processing data slow it
down
scan it well slow down consciously
analyze the data keep it above the line
reach down to yourself conscious and
yank it back up so that at the end of
this I can tell you when you turn on
your brain and think and then scan the
data I can ask your gut with much better
confidence how does that make you feel
[Applause]
turn on your brain and pay attention to
subtle cues like what I am wearing how I
am speaking the fact that I have worn
glasses the colors that I have chosen
thank you to my wife for dressing me and
then I will ask you how does it make you
feel thank you and in fact the manner of
speaking the entire delivery awkward how
many by show of hands would say that
this would meet the expectation for
somebody speaking on this red dot lots
of hands I want to introduce you to
something that I call the think feel
conundrum now again audience
participation by show of hands how many
people have ever had a time where they
feel like their heart and their brain
just couldn’t agree and I think that how
many people can’t raise their hand
alright so we know this happens the
question is why before we get any
further I want to clarify something
we’re going to talk about feel today
feel is a vague enough term that it’s
important to identify because emotions
are a form of feeling but I’m talking
about feeling like that gut feeling when
you say I just go with my gut because I
don’t want you to get the impression
that the emotions are somehow negative
emotions are exceptionally valuable in
how we process and interpret information
and how we develop relationships with
each other so do keep that in the back
of your mind
the vocabulary of the day when you see
feel it means feeling with your gut
going with your gut and there are plenty
of times when our gut gets it wrong the
question is why
first understand our brains were you
aware that sitting between your ears is
a supercomputer if you measure the
number of processes per second that the
human brain is capable of managing it is
that of the most sophisticated
supercomputer ever built and the amazing
piece of information is that that
supercomputer will require a knop energy
to power approximately a thousand
households and your brain does it on
about 20 watts the barn on superpower
winner for processing per watt in the
known universe capable of processing up
to 10 quadrillion pieces of information
per second and that is actually the low
estimate and you know what that tells me
means we’re capable of making mistakes
really fast
I know because I’m guilty of them
understand how your brain operates with
ten quadrillion processes per second
it’s not possible off to be consciously
aware of all of the data that we’re
managing
in fact our conscious mind only manages
about five percent of what we’re doing
the subconscious mind takes over for the
other ninety five percent and we’re
happy to have it do that in fact for
everybody that just came here after
lunch we had a bunch of conversations
going on simultaneously how is it that
you were able to listen to the person
you were speaking with and filter
everything else you still heard it if
you actively turn the filter off you
hear all the conversations and yet our
brain is capable of zeroing in on the
critical piece of information that we
want at that time the subconscious takes
over you don’t even think about it we
process information on a number of
levels I will define them as mechanical
emotional and intellectual mechanical
things that you can play intellectualist
things that you will process addition
subtraction and so forth and then
emotional would be again those
experiencing things that we deal with
most of us believe that we process data
pretty well right you think I need to
make a decision
I will reasonably validate this data I
will come to a very accurate response
and because I’m so talented
I’ll be right what do we really do we go
right below the conscious line and our
subconscious takes over and it does the
heavy lifting for us and we shortcut the
response now the shortcuts are what’s
dangerous because we all know shortcuts
are convenient but sometimes they fool
us so I’m going to ask the audience to
participate in a couple of things so
while you are finding the handout I’m
going to give you an example of
something that your brain does
automatically that you’re very happy for
the first one is the Mexican dinner
theory now if you’ve ever been to a
Mexican restaurant and ordered the
burrito because burritos
they always bring out the plate and what
does the waiter universally say careful
because the plate is hot thank you glad
you nailed that one
and there are two kinds of people in the
world
person number one says thank you person
number two says ooh you’re right
incidentally the difference between
wisdom and experience what happens when
the person touches the plate
you immediately jerk your hand back
before you even know it hurt as soon as
it’s hot you have a nerve impulse
traveling at almost 400 feet per second
just shy of 300 miles per hour traveling
up to your mind but before you even
process it and send it back down you’ve
already pulled your hand away it’s a
reflex response it’s a shortcut it’s for
safety now how many people have ever
touched something cold and had the same
reaction or my favorite how many people
have ever waded into the water at the
beach and something brushed against your
foot and you jumped a mile out of the
water when you’re not expecting
something it’s a safety mechanism you
look down and you realize it’s nothing
but I overreacted our brains do that
constantly so this is the audience
participation part I want you to look in
I’ve given everybody a handout for those
of you watching online or on youtube
we’re going to do something clever stop
watching that we’re going to look at
this piece of paper and all I’m going to
do is on the right hand side I’m a draw
click X and you can do the same at home
any sheet of paper will do and then
about five inches to the left of the X
draw a dot were you aware that you
actually have a physical blind spot in
your eyeball it’s where the nerves
connect you can’t see it but just like
everybody smartphone when you take a
panoramic picture your eyes take the
information that’s available to them and
they fill in the blanks so that you do
not perceive it but we’re gonna find it
together okay so what you’re gonna do
first is let’s take the paper you’re
going to hold it up start by touching it
to your nose
take your right eye and look at the X
and close it and then you’re gonna pull
it back staring at the X there’s gonna
be a point somewhere and you’re probably
gonna want to get it far as far the ride
as you can see pull it in there and that
dot will disappear I’m just a few people
getting it right it goes away that’s the
part that your eye can’t see when you
open the other eye a tree appears magic
right it does it automatically so we’ve
done now we’ve seen that we have a
reflex reaction our brain will interpret
data for us automatically let’s play
another game I’d like to do some math
with everybody because we’re all sharp
right and math won’t lie so let’s do
this problem together real quickly I
have a baseball bat in the ball the bat
and the ball together cost a dollar ten
the bat cost a dollar more than the ball
how much does the bat cost as quickly as
possible
okay I’ll heard a lot of answers who
said all right how much does the
pitchers which one was which how much
does the bat cost no ten cents five s
who said five cents it’s correct it is
correct the bat costs a dollar more than
the ball five cents and a dollar five
together cost a dollar ten now be honest
how many got the math wrong it’s not
because you don’t know how to do math
it’s because you take mental shortcuts
and we all do it so what does this mean
in real life well first of all it means
we need to be aware of how we make
decisions because I already talked to
you about mechanical and now
intellectual what happens when we make
emotional mistakes it can be a disaster
well we could try to measure on a social
scale and it’d be really difficult so
I’m gonna go back to something that I am
a little more familiar with by trade I
work in the field of Finance so we track
the numbers and what we found is that
investors consistently make mistakes I
know because I did this in fact I turned
what could have been
an in-state college fund for all four
years into a couple of semesters yeah so
that is the voice of experience here
right the question is what do you learn
what we learned in general is that
investors underperform their benchmarks
consistently on average company called
dal bar tracked this for over 20 years
and it’s been a study that’s been going
on rolling 20-year periods the most
recent data Kamath Ian came at the end
of 2016 but you can track this back for
almost 30 years now and the results were
consistent what happened well investors
consistently made this decision right
about the time to feel good because the
economic cycle is doing fine is when
everybody decided to buy and then the
markets promptly turned around and went
down and at first everybody said well
maybe it’ll be okay then oh I’m not so
good and then we do what we
professionally call freak out and at
that point people would sell down here
now how do you make money as an investor
this is not a sophisticated question you
want to buy low and sell high and what
were people doing the exact opposite no
did they mean to do this no was it the
wrong decision yes was it the normal
decision absolutely the question is why
let’s understand how we deal with
decisions real quickly first of all when
you are otherwise unstressed or maybe a
little bit stressed but capable of
managing it you process information
actively and above the line to make a
decision what happens when you get
really stressed you drop below the line
and use shortcuts and the problem with
shortcuts is they sacrifice accuracy for
speed so if we are sacrificing accuracy
f’s accuracy for speed we are now in the
fight-or-flight response it makes sense
that we would make immediate reactions
and they are reactions not responses to
the data our subconscious is doing the
heavy lifting so no problem right will
simp
we make sure that we are making
conscious decisions what happens when we
find ourselves believing that we are
making conscious decisions but they are
in fact being misinterpreted
welcome to the data danger zone where
our emotions are filtering things and we
are not actively aware of it how do we
do this and why by show of hands how
many people believe that you are biased
I am grateful that I’m seeing lots of
hands because I got to tell you if you
didn’t I will introduce you to our first
bias it’s called the blind spot we’re
biased because our brains are constantly
learning when I started this talk what
did I use no cards every one of them
blank it was simply to give you an
incongruity point your expectation was
better when you don’t have the
expectation met you find yourself in a
state of cognitive dissonance and your
brain is saying well where does the
cognitive dissonance come from it’s all
built upon previous experience if you
don’t recognize that you’re staring at
your blind spot just like that eyeball
you know there are lots of biases out
there we’re just gonna highlight a few
that you need to be aware of 9 out of 10
dentists agree this toothpaste is the
best right
remember that’s the bandwagon effect or
what we would call consensus bias and I
think we can all agree that the world
used to be flat nine out of ten people
would have told you the earth was flat
just because the group thinks it doesn’t
make it right confirmation bias you’ve
had that argument on Facebook with your
crazy cousin who believes the opposite
of your political belief and Springs all
the data and what do you do you go out
and bring a dozen other websites in that
prove your point
confirmation bias you only look for the
data that agrees with what you want to
see overconfidence biased I’m right
because it’s me how many people are
above average drivers in this crowd
right if you’re raising your hand you
might have an overconfidence bias
somebody’s below average we can’t all
raise our hands and another favor to
mind the halo effect business
professionals be wary if you’ve ever
been golfing with somebody and they’re
great at golf and you believe that
they’re great at everything that’s the
halo effect it’s also the idea that
pretty people must be more talented
maybe not probably not I don’t know but
I will tell you that that is a halo
effect so what do we do well first you
gotta recognize when you’re processing
data that your subconscious wants to
inform using your experiences you have
to actively reach below that line pull
it back up and scrub the data how I’m
going to give you a very simple process
I’m gonna divide data into two primary
types objective and subjective
subjective data is easy you get to
measure it hot cold tall short all
relative to your own perspective
objective data stuff that you measure
with an independent source and then tell
me are you actively processing that data
are you using your gut because when
you’re actively processing object of
data you’re on pretty firm ground we can
call that stuff rock metaphorically
subjective data that we are processing
actively and trying actively to get good
decisions with we’ll call that dirt
because it’s still firm and it will
brush-off if we make a mistake but it’s
not as firm as the rock is it because
it’s subjective but when you get below
the line we get into the caution zone in
the danger zone objective data that we
are using our gut on is where we get
fooled so be careful subjective data
where we are using our gut there’s where
we can get trapped and I call this the
quicksand quicksand zone and this is
also the stuff you want to be careful of
if you’ve ever had a episode of road
rage or washing out your kids because
you’re mad something like that
you are not processing the data you are
reacting to it so be aware
finally why because when you are
actively processing you’re engaged in
the process when you are not you are
much more easily manipulated we live in
a world where the media is busy selling
you everything why if you’re not paying
for the product you are the product so
they edit Oriya lies the news to get
below the line to attract your attention
things like silly little shiny objects
why would I point this out because it
commands your attention and every one of
you picked up and engaged in the process
with me why as a credible source you
would simply follow me because I asked
you to so I will ask you in the future
to do this when processing data slow it
down
scan it well slow down consciously
analyze the data keep it above the line
reach down to yourself conscious and
yank it back up so that at the end of
this I can tell you when you turn on
your brain and think and then scan the
data I can ask your gut with much better
confidence how does that make you feel
[Applause]
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