Everyone loves a good story. From being a baby to adults we are read, or read, stories of fiction, fact, news and gossip. Our fascination for a story is possibly more than meets the eye (or ear). This is something I have been thinking about over the last few weeks.
I am beginning to think the story is so important to us, that it we have assumed the story as part of our egos, the story has become the person and the person the story. The reality we believe we are in is nothing but a story. A damn intricate one at that. As Morpheus says in the matrix:
“Have you ever had a dream, Neo, that you were so sure was real?
What if you were unable to wake from that dream? How would you know the difference between the dream world and the real world? …
You’ve been living in a dream world, Neo”.
My analysis started with reading the Black Swan book by Taleb. He talks about what he calls the narrative bias. This is where we have a tendency to construct a story and then retro fit future facts into our story. He specifically talks about analysts retro fitting data into a normal distribution curve when in actuality it is not a normal distribution, thus drawing incorrect conclusions. This is done because the tools available are biased towards normal distribution encouraging analysts to use them.
The concept of a story however, goes much deeper and is way more interesting than normal distribution.
The story of the person
When you meet a new person, how do you know you can trust them?
We find out about their story; Who else do they know?, What is their history?
We construct a story around them and weave it into our own experiences to see if their story is compatible to our own. This is how we integrate new experiences and people into our lives. We take a part of the experience and weave it into our own story.
But what is the fabric of a story or even our own personal story?
An obvious example of a story is the CV (resume). A CV is a way of presenting a story. A good CV introduces the person and backs up this intro with a story with ‘the facts’ of where they have worked and what duties they performed. A CV provides the storyline and should invite the next employer to continue the story, to make the existing story part of their own.
Another example of a living story is Facebook. I am continually amazed at the amount of time people spend (waste) meticulously reconstructing their life story, presenting their life on a web page profile to others. The projection of the story into the ether, to intertwine with other peoples stories is the heart of Facebook. This intertwining of stories is where the fun and social interaction occurs.
This blog is a story. It has been deliberately constructed as one, with ‘the journey’ category being the entire blog listed in one category so the blog can be read like a story. It is my financial journey story.
Imagine not having a story. Imagine your friends not having a story. How would you plan your next action? Why be friends with one person over another? What purpose would you find for anything?
The story of the person weaves these things into a construct enabling us to function, make meaningful relationships, gives a sense of the passing of time and gives us a sense of purpose.
I therefore define the individual’s story as:
The story of the person is one of picking out seemingly pertinent items from the perceived past and weaving them together to form a short narrative to sum up the person for a given purpose.
The story of the world
How can we understand the world we live in, when there is so much going on at any one moment. The sheer volume of data is so overwhelming; no one person could possibly interpret it all. We need to pull out certain facts and construct a narrative to make some kind of sense. We can then weave this world story into our own to see how we fit into the bigger picture.
So the story of the world is similar to the story of the person. It is a selection of facts, sewn together to construct a simplified version of the whole.
The story of Data
I have just finished the chapter on constructing samples of population data to represent the whole, on the CFA course I am working on. Collecting samples of data is used when analysing the entire population of data is not possible, perhaps due to the data not being available or being too costly or time consuming to complete.
There are scientific methods used to construct samples so that they closely resemble the entire population of data they are trying to represent. One such method is to take many different small samples and to find their mean average. This hopefully reduces the sample error of a single result.
The sample process is analogous to constructing a story. The story is not the actual data but an approximation it.
How do we know if the story is sound? We can test our story with data not used in our samples to see if it holds and we can find supporting reasons for the story to be true. We can submit our findings for peer review and compare our results with other people’s findings. This is forward testing.
This holds true for the person and the world story as much as the data. We discuss the world and other people, comparing our views, drawing conclusions and always weaving the findings back into our own story, our view of the world.
The elements of a story
It seems to me then, given the above, that there are two key factors that play the most impactful part of our stories. These are the items that we choose to put into our story and the way in which we weave them together.
The way in which stories are weaved together I believe comes from our underlying psyche. A simple example is whether you are feeling in a good mood or feeling down. If you are feeling good today then the elements of the story are chosen in a positive fashion and the way in which they are woven together is to boost the positive feeling. It is an upwards cycle. Conversely, the opposite is true; if you are in a negative state of mind the story elements chosen may have a tendency to be negative also. This is a fairly gross example of the weaving process, but hopefully illustrates the way in which our psyche chooses the way we weave.
The elements are constructed partly by the filters our psyche have used and partly by what information is available.
It is therefore beneficial to make sure that a good and varied source of information is available to use in life to make the best possible stories.
The source of information
The source of information is important. By mixing with negative people, the source of information for our own stories becomes negative and this is what we weave into our lives. Likewise, if we read negative news, then our world view will be negative.
Sites like the BBC news continuously pump out extremely negative stories of murder, rape, torture and other crimes that go make up our view of the world. How many other things are going on right now, that are not reported that are amazing? How many acts of kindness go unreported? (Check it out, go to the BBC news site and count the number of negative stories they report on their home page compared to positive events)
If we read the news we should make sure we get it from as many diverse sources as possible.
Retrofitting the facts
The stories we construct into our lives are developed over years and years. We have a lot invested in our stories. Most often, we don’t want to have to rewrite our whole story. It takes time and effort and is much simpler to ignore small elements which may on closer inspection threaten the story. And so as Simon and Garfunkel write:
“All lies and jests
Still a man hears what he wants to hear
And disregards the rest”
So we retrofit the facts, choose what supports our stories and it is not until the story drifts so far from underlying facts we get a ‘correction’ back to reality.
And as Bill Hicks says:
“’Shut him up! We have a lot invested in this ride. SHUT HIM UP! Look at my furrows of worry. Look at my big bank account and family. This just has to be real.”
Aligning our stories with the underlying population (reality)
In financial analysis, as with the stories of our lives, these corrections can be painful. This is the black swan in Taleb’s book. This is the relationship that went wrong and caused pain and heartache, this is the European (and American and Asian and China) debt crisis, and this is all the places where the story didn’t match the underlying reality.
Why have stories?
Even if stories are the cause of corrections, there are obvious uses for the story. According to Taleb, stories are a form of compression; A way of storing large complex ideas or volumes into smaller more digestible forms. I think this is true.
In NLP there is a saying ‘Don’t confuse the map for the terrain’. The digestible chunks we use to weave our world are all that our thinking brains can process. We must remember this is not the world. Only our story. Our story may contradict other people’s stories, but that is OK as they are just the stories, not the people themselves.
Protecting against the story
The story is a tool. A weapon. A useful construct. It is all these things but it is not real.
How do we penetrate the story and see the entire picture? Is this even possible?
For the past two years I have been practicing the art of Yoga meditation and intuition. By practicing methods of self-realisation whereby the stories fall away and a feeling of transcendental bliss is found, intuition springs forth and provides a new view of the world.
This view goes beyond the story. The view is not a mental one and has no need for compression as it does not need to fit into the mind to be comprehended by thought. The intuitive faculty of man is undeveloped and untapped. It is this we must turn to, to rise above the mundane.
Through meditative practice and the growth of intuition, we will find the stories drop away and the underlying reality will show through, it is this that guides us and focuses us and allows us to make the decisions we need to make and also gives us purpose beyond the world of the day to day.
The story has its place, but it is the domain of the mundane. To remove the story is my primary goal, both in my financial interpretation of the world and in my personal life.
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