Skip to main content

"HALO EFFECT"

The halo effect is the tendency for positive impressions of a person, company, brand, or product in one area to positively influence one's opinion or feelings in other areas. The Halo effect is “the name given to the phenomenon whereby evaluators tend to be influenced by their previous judgments of performance or personality.” The halo effect which is a cognitive bias can prevent someone from accepting a person, a product, or a brand based on the idea of an unfounded belief on what is good or bad. 

      Generally, people always follow the herd as they want social proof(socially people recognize me or appreciate me). one of the great mental models by Nassim Nichols telab is alternative history(make some story after success). when interviewers ask why are you so successful then the person has some twaddle tendency ( person has to speak something), they will give you any emotional pitches by making alternative history. nobody knows that if they will follow that path step by step then they will succeed as life is not linear. Therefore, everyone has a different experience and different problems in their path. this type of thing always occurs in picking stock as people tend to find the next "Asian paints, HDFC bank", nobody knows before picking stocks that they will earn high CAGR and people always gives you an example of successful students or people but they don't understand the "base rate" behind success, for example when person win lottery from 1 in 100 then public follow that 1 person with a herd mentality, they are blind to see that 99 people who lost their money with just the following herd. this is useful in terms of finding your spouse, career, stocks, or anything. so the question is what should we do? 

      First, Avoiding big problems in the path is a great success, as Charlie Munger always says "All I want to know is where I am going to die so I will not go there" always think invert. if you want to become a good stock picker then think about how people fail to pick stocks then avoid that thing if you want a successful Career then think how can I make an unsuccessful career then avoid that, if you want to live a longer life then avoid early death and bad marriage or if you want to find good spouse then think what kind of girl will make your life misery then avoid that girl. secondly, you need to choose an enjoyable path, this is a path at which you are happy at your downside. Overall, thinking is the most important part of your life, people choose to die rather than think. your decision-making ability will make your life successful.

Comments

Popular posts from this blog

No More 'Buy and Hold' – Try 'Buy and Monitor' for Better Investments

Ever wonder how some people consistently make more money in the stock market? It's not magic – it's a mix of paying attention and making smart choices. Let's explore the simple tricks these successful investors use to get better returns than the average. Listen to Insiders: What They Know Matters Successful investors keep an ear out for insider trading updates. Why? Because if someone inside a company is buying or selling their own company's stock, they might know something good or bad is coming. Buybacks & Rights Issues: Company Confidence and Cash In Smart investors like it when companies buy back their own shares or offer existing shareholders the chance to buy more at a discount. It's like the company saying, "Our stock is a good deal!" IPOs & Big Corporate Announcements: Ride the Wave of News Beyond new companies going public (IPOs), successful investors pay attention when companies make Corporate   big announcements. Events like demergers, me...

Chemcrux Enterprises

Rural areas offer a more favorable environment compared to metropolitan cities. During my second wave of COVID vacation, I had the opportunity to spend time in my hometown and I discovered that it was a source of great inspiration and ideas. Although I have always been intrigued by stock market books, most of the ones I came across were from Western countries. This led me to search for books specifically focused on the Indian stock market, and that's when I came across an incredible book titled "How to Avoid Loss and Earn Consistently in the Stock Market" by Prasenjit Paul. I read the entire book during my journey from my hometown to Ankleshwar and upon finishing it, I was deeply moved by his story. While I generally have an independent mindset when it comes to my investments, I find myself giving a second thought to stocks recommended by individuals like Prasenjit Paul. What type of company makes wealth for shareholders? About Chemcrux Enterprises is a Gujarat-based comp...

FAANG

  This is a popular short name for the world's largest companies (F=facebook, A=Apple, A=Amazon, N=Netflix, G=google). I believe that they are not providing us basic needs in life. If we stay away from that, then we can save a lot of money, time, and attention, and, more importantly, we can save our economy.                 Facebook is  much more costly as attention and time. Amazon is costly as extra shopping or marketing. Google is costly as retained knowledge. and Apple is expensive for our wallets. Netflix can be expensive at time .