I’ve been a history junky for decades…
Reading about ancient battles, famed generals and the historical events that shaped the world has fascinated me since I was a young boy.
And there’s one story, written by the late Peter L. Bernstein, in particular, that I want to share with you today.
In his masterful study of risk, Against the Gods, Bernstein – a financial historian and economist himself – tells the story of a celebrated professor of probability and statistics in Moscow during World War II.
During that time, aerial bombardments of the city were unyielding. Even so, this Soviet scholar avoided air raid shelters. After all, Moscow had seven million people. “‘Why should I expect them to hit me?'” he would say glibly.
However, one night in late winter, the professor suddenly appeared in one of the shelters.
Several of his comrades happened to be there as well and were shocked to run into this “Doubting Thomas.”
They all wanted to know: What caused his shift in attitude?
His response was: “‘There are seven million people in Moscow and one elephant,'” he explained, “‘Last night they got the elephant.'”
Now, I have to admit that this book is easily one of my favorite reads. The writing and storytelling that Bernstein employs is just masterful.
But I love this interaction in particular for a reason…
It encapsulates the biases human beings have in regard to recent events.
Now, we’ve talked in length about biases – which simply mean the way we are hardwired to think about – and approach – investing.
Unfortunately, for us, most of those biases are what make us lousy investors.
But today, we’re going to dig a little deeper and talk about the most dangerous bias of all – The “Single-Elephant.“
View this page online: https://10minutemillionaire.com/2017/07/what-happens-when-someone-shoots-the-elephant/