Illusion of Control
Jan 2022

Dear Patrons,

On a busy city cross roads, a man waves his red cap during rush hours. That creates lot of disturbance to vehicle drivers. A policeman comes up to him and asks: ‘What are you doing?’ The man replies, ‘I’m keeping the giraffes away.’ ‘But there aren’t any giraffes here.’ Said the policeman.  ‘Well, I must be doing a good job, then.’ The man replies with authority.

This is ‘Illusion of Control’

On many busy cross roads in Europe, you can stop the traffic and cross the road at the press of a button. Actually, the button’s real purpose is to make us believe we have an influence on the traffic lights, and thus we’re better able to endure the wait for the signal to change with more patience. Such ploys are called ‘placebo buttons’.

Nobody understands why international events or some random statements of politicians can have such an effect on the market, but everybody reacts on it as they can control it. They are merely sounds waves. It is a real wake-up call if we realize the truth- that the world economy is a fundamentally uncontrollable system.

An investor putting extreme efforts in managing his investment is no better than the man with the red hat. He is trying to control something which is not even taking place. Therefore, focus on the few things of importance that you can really influence. For everything else: Destiny has its on way.

Nishit Siddharth Shah