Why People Like Monkeys Triangulate Based Upon Others Around Them

ByPrimary Researcher

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Executive Summary

  • Humans pretend that they do their own thinking when it comes to decisions. However, in reality, they simply copy what those around them do.

Introduction

One of the frustrating things about investing is that the process is not logical. Frequently people will talk about “fundamentals”; however, what something is worth is not merely based upon its fundamentals. This is because what people will pay for something greatly depends upon what people think the item is worth, which is what others think it is worth. This is why investing is actually more about crowd psychology than fundamental analysis. And this gets into the topic of triangulation of groupthink.

Video on Research Into Human Decision Making

Using primates is a perfect experiment because, of course, we are related. Every time I am around primates, I am struck by how close they are to me. I see a money yawn, and then they shake their head a bit — and I think, “Hey, I do that too.” This is my argument around triangulation.

This video describes that fear increases heading behavior. 

This quote describes the negative impact of being right versus being wrong when not following the herd.

If we go against the crowd and are right, we are seldom rewarded. If wrong, often punished.
If we go with the crowd and are right, we squeek by unnoticed. If wrong, we can blame others.

In 2021, jeans that have been ridiculously ripped have become popular. There is no advantage to such ripped jeans and many disadvantages. This me they look ridiculous. However, this illustrates how ridiculous ideas or fashion are accepted, as long as other people buy them. 

This video describes the crowd insights of Gustave Le Bon.

Conclusion

Financial sources tend to emphasize fundamental analysis as that makes the financial system appear more rational. However, a great part of what drives financial markets is people triangulating what other people are doing. Even technical analysis is ultimately the study of what those that invested in and sold the asset did — not the “underlying” value of that asset.