Disclaimer: The following are random musings from the black hole that is my mind.
It seems it’s in our nature to explain things, even though they are many times unexplainable. It’s almost as though our minds our minds are machines that must create explanations to make sense of everything.
Blind to the random?
If we see or experience something every day, we believe it to be “the truth” or “the way”. Take for example the years of a run up on real estate. It was thought “that’s the way it “is”. The dangerous thing of being blind to the impact of the random or unexpected is they typically result in debilitating shock.
Other examples include the attacks on the WTC or the farm animal that is nurtured and fed its entire life only to learn one (final) day it’s being raised as food.
All you need is one
Since the random event often yields a devastating aftermath, it becomes clear that the things we don’t know are more important than what we do know. So, we look to authority figures to provide explanations so we can begin to “solve” and therefore potentially prevent such random occurrences for occurring again.
… the things we don’t know are more important than what we do know …
Check facts, not intelligence
It seems the more convincing the delivery the more we accept the explanation as fact. Should we dig a bit deeper to determine a potential motive in this explanation? Perhaps one that is monetarily motivated (i.e. journalists or gurus) or for political positioning?
Do we worry too late?
Does this explain our inability to understand randomness? We look to find patterns leading up to the random event so we can recognize them and anticipate them. This can be seen in predicting market crashes based on those in the past, or most recently, in airport security breaches that led to a change in rules when flying (no visits to the bathroom and nothing on your lap during the last hour of flight).
Real estate laden with randomness
We’re looking to the data for answers. All players in the value chain – buyers, sellers, agents, investors (owners of foreclosed properties) are looking to the data to tell us what to do. While that’s smart, is it empirical? It is, after all, historical data. How does the random event of this economic catastrophe negate the patterns we see from the data?
Is real estate burdened by randomness? If so, do buyers, sellers and agents suffer due to constantly second guessing their past actions in terms of what occurred, torturing themselves with questions: “If only I hadn’t bit off more than I could chew” or “If only I would have been prepared for the downturn”.
Waiting for the Big One
Being a San Francisco native (and Bay Area inhabitant) I know it’s going to happen. I don’t know the odds, and I shudder to think how we will be affected by it.
So, while I don’t know the odds, I do know the consequences and that relieves some of the uncertainty. I can mitigate what’s known. That I will need water, food, flashlight, etc.
Tell me below – Given that you can’t know the odds of a random event, but you can mitigate the consequences, what are you doing differently at this phase of your career?