When we learn to run before it, we have to learn to stand up, to walk, to lift our weight. We cannot be directly born and start running from the very next day. It is like 1st day of the gym and the expectation of lifting 80kg of weight and coming out with 17 inches of biceps. Nature has created such a process of progress. We also have to keep it in mind. We started taking baby steps for shifting towards the B and I quadrant.
We have to remember that those who do something are much better than those who do nothing.
By looking at the financial statements of all three categories, we can understand what we should focus on and where we have to control.
The author has mentioned seven steps that help us to find our financial fast track and achieve our goal of the B and I quadrant. I will continue with those seven steps from my upcoming articles.
Authority bias comes when we put an extreme trust on authority, expert of a particular field. We just follow what they say and do not doubt on their opinions.
Whenever you are about to make a decision, think about which authority figures might be exerting an influence on your reasoning. And when you encounter one in the flesh, do your best to challenge him or her.
Business – Corporate has authority bias as founder, CEOs, directors pass an order and everyone follows it. If someone has viewed with proper data, facts and logic then also cannot challenge their order.
Successful business houses have the practice to invite better ideas from different employees group or department so that they get better insights for improving efficiency and operation.
Investment – Comeback to the stock market, we follow many of the celebrated investors, fund managers and we consider them as an authority. We do not argue on their opinion, investments thesis. We also tend to follow what they are doing. This behaviour is very rapidly affecting the majority of the participants. If Mr XYZ has bought ABC stock then the majority of us do not think anything and just run to buy ABC.
We should work on the preparation of process & checklist from listening, reading each guru, books etc. The process should be on what suits our temperament. It may be possible that few aspects may not be accepted by our process what authority says then we should not to do. Evolve from this bias can help us with becoming an independent investor rather than being depending on the authority.