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#4 — Are you wearing your “glass half full” glasses today?

January 29th, 2016

By Andrew Craig

Reading time: ~ 4 minutes

I’ve written in the past about how we humans are hard-wired to be negative.

Historically, this kept us alive. In a world of scarce resources and where other human beings were more likely to inflict physical harm on you than not, it paid to expect the worse. It is for this reason that the vast majority of our headlines continue to be negative.

99.99% of the things that will happen across the whole world today will not be violent murders, terrorist bombs or someone contracting the latest tropical disease but 99.99% of our headlines will be about those things which is actually very bad for our mental health.

I was thinking about this in the context of a few recent news stories over the last few days:

First, Google’s tax situation. I don’t want to get into a political debate here but I think “Nasty Google isn’t paying enough tax” is a great example of a “glass half empty” stance and makes a series of simplistic assumptions that are worth interrogating. I would argue that Google creates extraordinary value for a vast number of us every day. They don’t get paid for much of this. How many times have you used their search engine this week? How much did you pay them for that extraordinarily value-added service? Zero! Only yesterday, I used Google Translate to communicate with a hotel in Brazil and I use Google Earth / Maps pretty much every day to find my way to appointments. My business is also one of thousands which probably couldn’t exist without Google. These businesses employ people and pay tax that wouldn’t be paid if Google didn’t exist.

With your “glass half full” glasses on, you might argue that it is absolutely amazing that this organisation gives us any tax at all. You might argue that in terms of the creation of a social good, Google spends money far better than the British Government does and the £130 million they just paid would be better off in their hands. What might they create next that enriches our lives for free?

Compare that to the £460 light bulbs and myriad other things on which we know the British state regularly wastes our money

If you want to see just how horrendously wasteful the state is, do check out David Craig’s excellent if enormously anger-inducing book Squandered.

I appreciate this is a pretty controversial stance and to a certain extent I am playing devil’s advocate.

If I’m honest, I’m not entirely happy with paying tax at a rate more than ten times Google’s but I do think it is important we all stop and think in a slightly more nuanced way about these issues rather than unthinkingly go along with the braying mob.

Changing tack completely but making a similar point, I also read a typically depressing article about homelessness this week, the thrust of which was that about 7,500 people slept rough in London last year at one point or another. In no way do I wish to belittle the tragedy that is homelessness and I wish the likes of Shelter all the luck in the world eradicating it completely.

That said, I think it is a shame that in any debate about it, no-one ever makes the point that 7,500 as a percentage of the 8.5 million people that live in London is nothing short of utterly remarkable. In the Victorian slums of 150 years ago or in Samuel Pepys day, a meaningful percentage of London’s population had no place to call home and starved to death in the cold. With our “glass half full” glasses on we might wonder why we don’t ever see headlines proclaiming the joyful news that in this day and age:

“Only 0.09% of people in London don’t have a roof over their head, warmth, running water and sanitation”

When you think about it, this is actually yet another truly extraordinary achievement for which we must thank the powerful combination of capitalism, financial markets and modern democracy.

You might ask what on earth my broad point here is and what the relevance to investment is. The answer, is that this ability to reframe things from a different perspective is actually hugely powerful in any endeavour. There is copious evidence from the literature of psychology, sociology, management studies and so forth that people with a “glass half full” approach to life do significantly better than the Victor Meldrews of this world. If you want to be happier, healthier and wealthier it is worth taking this on board.

This requires discipline as it doesn’t come naturally to most people.

Whatever you want to achieve, a good strategy is to pro-actively choose to approach life with your “glass half full” glasses on every day, if only to inoculate yourself against the daily bombardment of negativity that comes at you from television, internet, radio and newspapers.

This is particularly the case where investment is concerned. Warren Buffet isn’t the only famous and successful investment professional to have made the point that:

There is always a bull market somewhere

At times like these, when the headlines are full of doom and gloom, rather than sink into despair and decide that investment isn’t for you (a very bad idea), the far better strategy is to reach for your “glass half full” glasses today and realise that there are just as many opportunities at this point in the economic cycle for the informed individual than there are when the bull is running, possibly even more.

The world is a wonderful place with your ‘glass half full’ glasses on.

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