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The Challenge of Understanding the 10% Rule.

March 18, 2010

This one is for the intellectual dude among you who challenged me last week that my blog isn’t unique. If you can face the truth of what I say today, you are something else, “kol hakavod.” I just described on a technique I invented 40 years ago in counseling in California that was ignored by my colleagues! I have used the technique successfully over the years in my practice, teaching, and in my relationships. I wanted my followers on this blog, The Psychology of Investing blog, to benefit in their financial dealings by understanding the concept.

Normal people accept solutions to their financial problems on the basis of 2 perceptions; the solution appears to work, and the behavior is within the Zeitgeist. The “10% Rule” is defined as “Rejecting the top 10% of great solutions to a problem because the information is “too good to be true” or the expected behavior is outside the “box or zeitgeist.”  The “10% Rule” implies that, (i) sometimes what works best is not “politically correct” to use. I was ones fired by a clinic for curing a patient of a neurosis using hypnotic guided imagery, and (ii) sometimes you reject something great because it appears absurd, abnormal, unreachable, magical, unethical or controversial. My supervising psychiatrist in a mental hospital once rejected my suggestion that one of his patients who was “acting weird” was clinically normal  (based on Freud’s assertion that if you can hold a steady job and you can have a productive relationship, you are not mentally ill no matter how weird you act).

Now, my intellectual friend, do you have the courage to apply the “10% Rule” in your life?

1. You now know why your portfolio is making less money than you expect.  (You ignored the top 10% advice).

2. You now know why you missed that opportunity to buy low and sell high. It was too good TBT.

3. You now know why you don’t consider behavioral investing as your best approach to accumulating wealth.

4. You now know why your money is in mutual funds.

5. You now know why you are not “hot” about preparing for an IPO. Your top “10%” thinking is “hiding.”

6. You now know why you have your account at a bank and not at a credit union.

7. You now know why you didn’t marry that boy or girl you once knew.

8. You now know why you accepted a medical treatment that was not the best.

9. Now you know why you didn’t select the other vacation that you thought about.

10. You say, “Yes, life could be better, but I’m doing fine.”

Oh, give me (yourself) a break! Don’t you want the challenge of discovering the top 10% you are missing in business, social life, personal life, medical life – and spiritual life?

2 Comments leave one →
  1. March 19, 2010 2:09 am

    In addition, if your writing is full of mistakes, your audience may think you are incompetent or simply not understand your message. Mutual Fund

    • March 22, 2010 7:43 am

      I checked you site, good stuff. You make a good point. I always wondered about writing English sentences since English is my second language. Having surveyed my students in California for over 30 years, about 2% thought I was incompetent, 20% didn’t understand my massage. Having done many conferences, I think about 40% of the professors attending didn’t understand my message. In one conference on The Socratic Dialogue, Psycholinguistics, and Critical Thinking Skill, 90% of the attendees didn’t understand what I was talking about. And finally, now that I teach behavioral investing and ran a BI club, so far it’s not encouraging. You have put your finger on the most important issue in communication: Should Einstein continue to talk about Relativity and Quantum Mechanics or go back to lecture on the ‘easy’ stuff of Newtonian Physics that everyone in Academia understands? Thanks!

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