Did you expect a market crash in 2020?

How bad did you think the market crash would be?

How quickly did you think the market would recover?

Are you sure that’s what you thought?

Our minds play tricks on us. The worst part is knowing about it doesn’t help. Hindsight bias is one such trick that messes with our memories in a couple of different ways.

• We tend to look back on our past predictions as being more accurate than they were.
• We tend to look back on events as being more foreseeable than they were at the time.

Richards Heuer, in Psychology of Intelligence Analysis, related a couple of examples. Continue Reading…

John Henry Patterson took a company that three previous owners failed to make profitable, built it into a global success, and changed how businesses worked. He did it selling cash registers.

There was just one problem. Nobody had a clue why they needed a cash register.

The cash register was invented in 1879 by a man named James Ritty. Ritty tried to make it into a business but failed. So he sold to another guy. He failed too and sold it to a local group of investors, who also failed.

When Patterson bought the company in 1884, not much had changed in those five years. Other than a few sales to saloon and store owners, most people were skeptical of the machines. In fact, local business owners mocked Patterson for buying a horrible company that had no demand for its product.

So Patterson set out to create demand. Continue Reading…