As you might guess, financial planning is something that lots of
people at the Google care about, which is to say that it is something
that lots of people at the Google argue about. I am an Efficient
Market Theory believer myself, because its guiding principle of
"nobody knows anything, and anybody that claims to know anything
is trying to rip you off" fits nicely with my established
worldview. So I was looking in the Burton Malkiel
book for the names of some index ETFs, and happened to read
something that I found hilarious:
Psychologists have also identified a tendency for individuals to be
fooled by an illusion that they have some control over situations
where, in fact, none exists. In one study, subjects were seated in
front of a computer screen divided in two by a horizontal line, with a
ball fluctuating randomly between the two halves. The people were
given a device to press to move the ball upward, but they were warned
that random shocks would also influence the ball so that they did not
have complete control. Subjects were then asked to play a game with
the object of keeping the ball in the upper half of the screen as long
as possible. In one set of experiments, the device was not even
attached, so the players had absolutely no control over the movements
of the ball. Nevertheless, when students were questioned after a
period of playing the game, they were convinced that they had a good
deal of control over the movement of the ball. (The only groups
that were not deluded by the illusion of control were those who had
been clinically diagnosed with depression.)
(The emphasis is mine.)
21 Aug 2007 00:56 PT
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