2021-06-14

With the exception of 2020, the UEFA Champions League usually takes place at the end of May. However, due to the pandemic it took place in August last year. As a Chelsea and Champions 2021 fan, I would just like to share my joy and my optimism with you. The last such triumph was in 2012. At that time I was living in London, a few hundred yards from Stamford Bridge, FC Chelsea’s football ground, and was fortunate to have a few friends and hard-core supporters, that I joined to see the games.

As Albert Camus said: “Because, after many many years in which the world has offered me a lot to see, in the end, everything I know about morality and the obligations of men, I owe it to football.” Camus was a great writer, literature Nobel prize winner, a native of Algiers and of very humble origin. Reminiscing of his experience as a young goalie for the local team, he added: “I learned right away that a ball never came to you on the side where we believed. It has served me well in my life and especially in the Big City (Paris) where people aren’t always bold and trustworthy.”

In football, as in life, there are optimists and pessimists, winners and losers. At the brink of the UEFA Euro 2021, which is starting across Europe in few days, it feels like a timely and appropriate introduction to the second round of the psychology of misjudgements, namely:

Self-serving tendencies and optimism – epitomized by this example of quite a few football fans: when the team triumphed “We beat Man City!” and when it wobbled “They lost against Man U”. 

The poet Edward Young said: “All men think all men are mortal but themselves.”  Most of us have this cognitive bias, we believe we are better performers, more honest and intelligent, have a better future, etc., but we can’t all be better than average. A survey done in 1981 on 161 students in Sweden and the United States, asked them to compare their driving skills and safety to that of other people. For driving skills, 93% of the U.S. sample and 69% of the Swedish sample put itself in the top 50%; for safety, 88% of the U.S. and 77% of the Swedes put themselves in the top 50%.

On another subject, we tend to overestimate our ability to predict the future. We tend to put a higher probability on desired events than on undesired events. For example, we are over-optimistic about the outcome of a planned action. Optimism is good, but when it comes to important decisions, realism is better.

There is nothing like success to blind you of the possibility of failure. When times are prosperous, when Mr. Market goes up, as it does now, ego and arrogance go up too. When our investments turn into losers, we had bad luck. When they turn into winners, we are geniuses. This way we draw the wrong conclusions and don’t learn from our mistakes.

Experts love to extrapolate their ideas from one field to other fields. They define problems in ways that fit their tools rather than ways that agree with the underlying problems. Give someone a tool and they’ll want to use it and overuse it, whether it is warranted or not.
In the truth of science, physics professor Roger Newton observed: “Scientists are human, they sometimes succumb to weaknesses such as jealousy, vanity, and, on very rare instances, dishonesty.”

On how to identify people that may cause problems, Warren Buffett says: “You can’t take 100 people and take a look at them and analyse their personalities or anything of the sort. But I think when you see the extreme cases – the ones that are going to cause you nothing but trouble and the ones that are going to cause you nothing but joy – you can identify those pretty well.”

And Charlie Munger concludes: “It is pretty simple. There is integrity, intelligence, experience and dedication. That’s what human enterprises need to run well.”

To be continued.