At times like these, it is tempting to seek a secure prediction of the future, after all, we have been living through uncertain times for most of the last year or so, from floods to fire, back to floods and then a pandemic. Many of the people I talk to have been increasingly asking me questions which begin with “What If…”. Whether it is followed by “they don’t find a vaccine” or “the economy tanks” or “Trump wins the election” or “the Martians finally invade”, I am being asked to predict the future.
I have previously written about my out of tune crystal ball here. Sometimes you just have to wait and see what the future brings. This does not mean that you cannot be prepared. You can minimise the impact of “What If” by placing yourself in the position where you are best able to confront any situation which arises, whether it is the one you are worried about, or perhaps the one you had not thought of.
As I write this Joe Biden has been declared the winner of the US election. In the last 24 hours, I’ve heard multiple versions of what might happen if one or the other candidate wins, and none of them is going to be true, or completely true – nobody knows or can know. For some time, investment markets have been behaving as if they thought a Biden victory was certain, but for a while, in the last couple of days, they might have been a little concerned about that prediction. Let’s remember that investment analysts are largely paid to make educated guesses as to likely outcomes, and even they, as well educated as they are, can make mistakes.
It is usually the most anxious among us who worry about “What If”. That Martian Invasion could really upset the apple cart, and who knows how badly it will affect us. I’m not even sure if Martians are two feet or ten feet tall, but what if they’re 20 feet tall, how bad would that be? Exercising caution is one thing, but worrying about an uncertain future to the point of inability to act is quite another.
My friends don’t really want to hear “I don’t know” when they ask me “What If”. The sub-text is usually that they are afraid to make a decision and use the uncertainty of the future to avoid making it. They don’t want me to have an answer really, because then they could stop worrying and get on with it. Fear of making a decision is one of the three Fs of change I referred to here
What if we could predict the future though? Would the knowledge of future events change your behaviour? We have many examples in our lives where we can point to irrational actions in the face of certainty around outcomes. We know that if we contribute a little extra to super we’ll get a better result, but we use the excuse of the uncertainty of investment returns not to do so. We know that driving at speeds above the limit can lead to financial and perhaps other costs, yet we use the uncertainty of getting caught as a reason to speed. We know that summer on the beach will almost certainly lead to sunburn, yet we still hit the sand without a hat or a shirt. We still do things even when we know there will be negative consequences, so why worry about them at all?
What if we had no surprises? I like surprises, well pleasant ones anyway. If I knew what was coming, I could never be surprised. If I could predict the future there would be no point watching sport, because I would know the winner before the game began. If I could predict the future I would never need to try anything new. There would be no need to explore new ways of doing things in business because I would already know whether it was going to work. There would be no point in trying a new dish in a restaurant because I would know whether I was going to enjoy the experience. What a sad world that would be.
So let’s take a deep breath and wait and see. Let’s see whether Trump finally concedes the election loss. Let’s see whether scientists discover a working vaccine for COVID-19 (we all hope so), let’s see if the economy recovers (it will, but when?). Let’s be prepared to act when the time is right, but not paralyse ourselves with worrying about “What If”.
I read an article the other day about the detection of regular radio signals coming from outer space. Might be those Martians….
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