Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Silver and Gold - We Can’t Understand It for Them

Commodities / Gold and Silver 2016 Nov 23, 2016 - 07:17 AM GMT

By: Dr_Jeff_Lewis

Commodities

For years I have calmly, patiently, and for the most part rationally, listened to friends, family, patients, and colleagues grapple with the notion of precious metals.

The majority understand the basic reasons why some portion of portfolio allocation is necessary or prudent, but very few have (or will) taken action.

Often, people are shocked that I would be interested in the matter to begin with. I think subconsciously people understand to be a “Doctor” is to be a teacher, but on the surface most people find it odd and uncomfortable to accept my interest and quest in something that rarely occurs to them.


Occasionally, there will be debate. I don’t necessarily look for them. Experience with humans of all ages and from all walks of life has afforded me a healthy dose of humility. But I’m happy and proud to go as far as anyone would like about money, finance and especially silver.

No matter how tempting it is, no matter how strong the need is to be right and to feel vindicated, it is normally fruitless. I don’t know where I first heard it, but one of my favorite expressions has become:

“I can explain it to you, but I can’t understand it for you.”

Understanding requires a shift. One that, I feel myself almost cringing to admit, involves emotional intelligence. This goes against all rational logic.

Most people are polite. And I’ll admit to a tendency for avoiding conflict — especially given the context in which many of these (potential) debates typically arise.

I came across the following article by accident some time back. It immediately resonated with my own experience in wrestling with my own beliefs, but also the beliefs, world views, and opinions of people I care about.

And collectively speaking, the opinions and views of anyone with a pulse who cares about financial safety, justice, and wealth.

You are, I’m afraid to say, mistaken. The position you are taking makes no logical sense. Just listen up and I’ll be more than happy to elaborate on the many, many reasons why I’m right and you are wrong. Are you feeling ready to be convinced?

Whether the subject is climate engineering, the Middle East or forthcoming holiday plans, this is the approach many of us adopt when we try to convince others to change their minds. It’s also an approach that, more often than not, leads to the person on the receiving end hardening their existing position.

(Ed. For the subject of money and wealth, at the root lies the fear of loss – more powerful than the want of profit. People will do anything, and convince themselves of practically anything, to avoid loss.)

Fortunately, research suggests there is a better way – one that involves more listening and less trying to bludgeon your opponent into submission.

A little over a decade ago Leonid Rozenblit and Frank Keil from Yale University suggested that in many instances people believe they understand how something works when in fact their understanding is superficial at best.

They called this phenomenon “the illusion of explanatory depth”.

They began by asking their study participants to rate how well they understood how things like flushing toilets, car speedometers and sewing machines worked before asking them to explain what they understood and then answer questions on it.

The effect they revealed was that, on average, people in the experiment rated their understanding as much worse after it had been put to the test.

What happens, argued the researchers, is that we mistake our familiarity with these things for the belief that we have a detailed understanding of how they work.

(I’m sure you’ve experienced this with the topic of money and currency. We use the terms interchangeably, though they are very different in reality.  I’ll never forget the transformation I witnessed in a “Bitcoin aficionado” – arriving from the technological side of things – coming to grips with the store of wealth versus currency.)

Usually, nobody tests us and if we have any questions about them we can just take a look. Psychologists call this idea that humans have a tendency to take mental shortcuts when making decisions or assessments the “cognitive miser” theory.

Why would we bother expending the effort to really understand things when we can get by without doing so? The interesting thing is that we manage to hide from ourselves exactly how shallow our understanding is.

It’s a phenomenon that will be familiar to anyone who has ever had to teach something. Usually, it only takes the first moments when you start to rehearse what you’ll say to explain a topic (or worse, the first student question) for you to realize that you don’t truly understand it.

All over the world, teachers say to each other “I didn’t really understand this until I had to teach it.” Or as researcher and inventor Mark Changizi quipped: “I find that no matter how badly I teach I still learn something.”

Explain Yourself

Research published last year on this illusion of understanding shows how the effect might be used to convince others they are wrong.

The research team, led by Philip Fernbach of the University of Colorado, reasoned that the phenomenon might hold as much for political understanding as for things like how toilets work.

Perhaps, they figured, people who have strong political opinions would be more open to other viewpoints, if asked to explain exactly how they thought the policy they were advocating would bring about the effects they claimed it would.

Recruiting a sample of Americans via the internet, they polled participants on a set of contentious U.S. policy issues, such as imposing sanctions on Iran, healthcare and approaches to carbon emissions.

One group was asked to give their opinion and then provide reasons for why they held that view. This group got the opportunity to put their side of the issue, in the same way anyone in an argument or debate has a chance to argue their case.

Those in the second group did something subtly different. Rather than provide reasons, they were asked to explain how the policy they were advocating would work. They were asked to trace, step by step, from start to finish, the causal path from the policy to the effects it was supposed to have.

The results were clear. People who provided reasons remained as convinced of their positions as they had been before the experiment. Those who were asked to provide explanations softened their views, and reported a correspondingly larger drop in how they rated their understanding of the issues.

With some things, softening views open the way for deeper understanding and a renewed conviction. One that becomes immune to outside pressures. But “softening” is a misleading term. The softening comes as a result of work and of thinking. And in many cases, a difficult challenge to preconceived notions.

For example, the majority of people in our “camp” – including myself – have a difficult time grappling with the fact that price action drives the commentary.

The root of how and for which direction markets trade in our modern financial system is rigged. Everything else is a manifestation of that. Including what is left of the broken “organic” economy that lies hidden within.

People who had previously been strongly for or against carbon emissions trading, for example, tended to became more moderate – ranking themselves as less certain in their support or opposition to the policy.

(Again, experience shows that the deeper down the rabbit hole one goes with centrally designed policy, the more conflicts of interest shed a darkness all around.)

So this is something worth bearing in mind next time you find yourself trying to convince a friend that we should build more nuclear power stations, that the collapse of capitalism is inevitable, or that dinosaurs co-existed with humans 10,000 years ago.

Interesting analogy the author chooses.

Perhaps one might explain to him how the current collapse of capitalism began long ago.

Just remember, however, there’s a chance you might need to be able to explain precisely why you think you are correct. Otherwise you might end up being the one who changes their mind.

Ironically, the main reason I think I’m correct about silver and precious metals is precisely because of this phenomenon spread out collectively in the mass illusions of today’s society and culture.

1. To receive early notification for new articles, click here. 

2. Or to view all of our products and services, click here. 

3. Or...support the cause, and buy me a cold one! 

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2015 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules