Judgment: Flawed or Impaired?

PainAs I get older, I often find myself questioning very basic beliefs more and more.

I do, however, understand concepts such as why humans must have a mechanism to register pain.

For example, while it seems meaningless to have a kidney stone associated with pain, perhaps the utility of the pain is to send a message that you have to change some lifestyle choices.

That assumes, however, that human beings have the desire to practice preventive medicine or that they even have the ability to learn from past experiences.

Our judgment is often flawed, even in the presence of compelling data. I know and am constantly being told by Sugar Momma that I need to drink more, yet I continue a camel’s existence, coffee notwithstanding.

That kidney stone example may be stretching it a bit, just as it needlessly stretches that ureter, but more concretely, it’s probably a good idea to sense pain if you put your hand inadvertently on a hot stove burner. You really want to have some feedback mechanism that would give you the incentive to remove your hand before it became completely roasted.

Delicious, yet destroyed.

Forget about the more controversial beliefs, such as that of an expanding universe. Those more etheral thoughts are really getting harder to accept or even comprehend.

Human judgment is a strange thing. There’s no question that collectively we do learn from the past and as a species we are able to read the data and respond to reality as it evolves, so that as a species our ability to interact with the world constantly advances.

It’s on the individual level that I have my doubts.

Although an expanding universe seems to fly against the idea of neither creating or destroying matter, the ability to advance a species requires a positive sum game. The net balance after considering good outcomes from judgments has to exceed the bad outcomes.

You can argue that cows will not change their society because they neither create nor destroy outcomes based on their judgment. They will forever go on in the same way munching on whatever they can and marching into whatever abattoir to which they’re led.

Of course, if you sat around arguing about cows’ ability to advance their society, culture or species you’ve already made the bad judgment of spending time on that philosphical pursuit.

For anyone who has ever watched “COPS” it’s also obvious that human judgment can be impaired. Granted, on that show it’s hard to control for those felons that are purely acting on the basis of impaired judgment, as many who have such an obstacle to overcome are also faced with the obstacle of flawed judgment.

To do so, you’d have to assess the actions of someone who was normally in reasonable balance with the world and who has appropriate interactions with society, while successfully navigating through life.

Those can be fairly powerful filters and are useful in determining who to keep out of your life and away from your family members.

Impaired judgment was a topic touched upon a few days ago when writing about the Percocet prescription that I had been given and how it might effect both clarity of mind and purpose.

Obviously, there are many times that you really don’t know whether your decisions were appropriate until many years later. The perfect example of that is how an American President’s legacy is really only fully understood by future generations as the consequences of decsions play themselves out.

In that regard, your children are the same. It takes a while to know, although you certainly get some clues along the way. I’m reasonably certain that Bernie Madoff’s mother probably would have had some reason not to be completely surprised by the eventual path that he took.

Otherwise, most decisions that we make tend to have fairly quick consequences. Everything else being equal, quick feedback from decisions should be more efficient in effecting change in our ability to learn from experiences.

Although I repeatedly say that I never have regrets regarding stock market related decisions, that’s not to say that I don’t question my judgment.

Most recently, I’ve had reason to question my judgment regarding sale of yet another series of contracts on the stock that I’ve beaten to death over the past few days.


I also have already expressed my doubts regarding proper judgment when I actually purchased the shares on the same fateful day as I most recently picked up shares in Green Mountain Coffee Roasters and Amazon

Flawed judgment? Impaired? I don’t know, but I do know that the net balance of those decisions has been negative.

The question becomes whether or not I’m capable of learning from the decisions.

Probably not.

Most of life is predictable. You live, you die and then fairly mundane stuff there’s stuff in-between.

The unpredictable events are memorable only becasue therre are so few and their outcomes are magnified as the mind begins to believe that “the exception proves the rule.”

That kind of philosophy probably arose from someone trying to justify a lifetime of bad decisions when faced with obvious facts.

I very vividly remember my first kidney stone attack about 7 years ago. Not only do I remember the pain, I also remember the words of advice. It’s just that I decided to fall back on relying on flawed judgment to disregard the advice.

I wasn’t impaired. At that point the pain was gone. My flawed judgment might have been averted if the impairment had continued.

The stock market, despite so many people living and dying on the basis of charts and algorithms, has never really proven itself to be predictable.

What I wonder about Netflix is how so many “smart people,” and presumably the very recent price rise had to be driven by deep pockets, which usually are found on people that are self-diagnosed as “smart” could have occured?

What kind of judgment was necessary to believe a rumor that on every level really didn’t make sense? Then compound that with the judgment that it was an investment worth pursuing.

It’s not terribly likely that it was the universe of individual investors that acted irrationally. The total sum of discretionary funds available for investment by that universe is dwarfed by funds that are professionally managed.

Today, an analyst was exceptionally blunt about Netflix.

Michael Pachter, of Web Bush Securities, may have taken his cues from the recent GOP debate tactics and didn’t even bother nuancing his words when calling out Reed Hastings, Netflix CEO, when he said “he’s crazy. He has lost his mind.”

It wasn’t much better for Whitney Tilson, who had previously been very wrong on the short side with Netflix and subsequently took on long positions in Netflix.

Here was a case when the filter wasn’t on. Was that good judgment or bad judgment being so blunt about fellow ‘smart people?”

From my perspective, Pachter was “pain,” but in a good and necessary sense.

When you do make a bad judgment regarding an investment, the pain may not be physical other than for the physical amount of money that you have left at the end of the day. The pain is emotional and obviously stress can effect physical well being, as well.

Pachter was sending that warning signal, although in this case, it was probably the individual investor that drove prices down an additional $2 after his pointed comments, as they scurried to get out.

My guess is that Hastings and Tilson also believe that Pachter is a pain, but not in the good sense.

Now couple that with the report that since December 19th, 2011, the only down trading hour of the day was from 2 to 3 PM. which happens to be when Street Signs is on the air.

Coincidence? Maybe, but among the reasons that I enjoy Street Signs is that the hosts, Mandy Drury, Brian Sullivan and Herb Greenberg don’t serve as cheerleaders. Instead, they serve out caveats and often give great reasons to be circumspect about “the facts.”

You have to like people that preach prevention and want to help spare you some unnecessary pain.

Oh, and they may also have been the ultimate judges in selecting this years’ “Word of the Year.”

In that regard, great judgment.




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