Sunday, November 1, 2009

Shut-up Stupid Sunday: Following The Herd

When I was five years old, I went with a group of kids, aged 5 to 10, to someplace with a huge raft. Naturally we all got on it. It held steady until someone spotted something on one side and everyone ran over to look.

With all the weight shifted to one side of the raft, that side started to dip into the water.

The other kids saw the water coming up over the edge and ran away from it, to gather at the other side of the raft.

I remember thinking how they were causing the raft’s center of gravity to shift from one side to the other, (Yes, I was a geek even at five) and the best solution would be to move into the center of the raft, and wait for the rocking motion to settle down and then move outward.

So as everyone else ran to the other side of the raft, making that side violently dip into the water, I calmly walked to the center of the raft secure in my knowledge that it was both the most stable place on the raft and by being in the center I was helping to stabilize the raft for everyone else.

When the raft dipped into the water on the side that the other kids ran to they all panicked and ran back to the side that had first dipped underwater.

I stood my ground and a 10-year old slammed into me sending me over the edge of the raft.

So I got soaked and everyone else only got their feet wet.

I got thinking about this event as I was wandering around a retail store trying to find a clerk to check me out.

For the last two years retail stores have seen their sales volumes dip and to keep their profit margins (or any profit at all) they have laid off workers. This has resulted in less money be circulated in the economy so fewer people have money to shop in their stores and with fewer employees those customers that do have money to spend aren’t being serviced as well so they spend less.

This means lower profit margins, leading to more lay offs, leading to lower profit margins, leading to more lay offs.

This situation is the same as the kids who were on the raft with me panicking and running from one side of the raft to the other. Those business owners who aren’t in a total panic are afraid of something that my 5-year-old mind didn’t think of being run down by the herd.

Its been awhile since the financial panic started but there are still people giving out financial advice saying either follow the herd or at least move out of their way.

That time has past, it is time for people to stand up and face down the panicked crowd.

It’s riskier standing up for what you know is right than just following the herd, but history has shown that when the time is right one person standing up for what they believe in can change the world.

So I say to everyone who thinks now is still the time to follow the herd in their mindless panic “Shut-up Stupid”.


Honkmofo said...

Well said.

Stephanie B said...

Whenever you find yourself on the side of the majority, it is time to pause and reflect.
--Mark Twain

I must admit I don't consider myself much of a herd follower. I have followed the prevailing opinions of the world from time to time, but only if that seemed to me the right thing to do after, well, I paused and reflected. I decide what to do independently, regardless of whether people agree with me. What everyone else is doing should have no bearing, in my opinion, on what one ought to be doing.

Panic and hatred are both enemies to critical thinking and rational behavior. If you find yourself unable to do anything but react to perceived threats, you should sit down with a paper bag and breathe until your brain restarts.

Much better to do the right thing whether you're fighting the good fight in the midst of like-minded fellows or standing alone, then to react emotionally to everything or you'll not only harm people unnecessarily when there is no real threat, but be useless if a real threat materializes.

askcherlock said...

This is certainly not a time to panic. Last March, maybe, but not now. The market will find its equilibrium and the raft will take a slow and steady course up the river.