In the famous book, Influence by Robert Cialdini, liking is one of the reasons for getting influenced or acting irrationally.
During the pandemic time, a lot of people started ordering from Zomato. In a few months, the company came up with an IPO. A lot of people associated liking ordering from Zomato to holding investments in Zomato.
A mere association with a company’s product/service led to positive signals about the IPO. Ideally, someone who wanted to invest in Zomato should have studied the company, performance, plans etc.
Common background
Imagine you get a message to connect over LinkedIn. Assuming the invite is from someone who has a similar background as you, the probability of establishing the connection is a lot higher. There is a general liking for that person.
You may not even look at the invite if it comes from someone who is not from your city and whose educational background does not match yours.
Listening
In the book, How to Win Friends and Influence People by Dale Carnegie, it is mentioned that you can influence people by just listening.
A salesperson is most effective when they listen to customers. Similarly, a financial advisor will be able to win a client if he/she just listens to them. People want to share, and they need an outlet for someone to listen. People who listen are LIKED by everyone.
You can massively increase your odds of being in the good books of others by just ‘listening’ to them.
Boring industries are disliked.
There are so many companies in rather boring industries. The share price of those companies even during a bull run is reasonable. One of the reasons is that people in general don’t like them. In the short-term, prices don’t move that much but in the long-term share price catches up with the fundamental performance.
You increase your chances of investment success by just associating yourself with boring things/industries. People in general don’t like boring industries and that will ensure you get a reasonable purchase price.
Narratives
Be very aware of how media plays with your mind. A certain narrative can have a massive influence on your mind. For example, when Hamas attacked Israel, pro-Israel sentiments prevailed, and when Israel started bombing, pro-Palestine sentiments prevailed.
Rather than sharing facts, opinions are planted, and people are managed by media houses all over the world. Unless I am aware of the facts of Israel/Palestine, Ukraine/Russia etc. how can I have my opinion? I need facts for my assessment, but the media is only interested in sharing opinions.
Expert opinions
A lot of finance experts come on TV channels to share their opinions (shown as facts). Better language skills and charisma can add to your liking for the finance expert, and you can indirectly develop a liking towards the opinion of the finance expert.
It is a different matter that often these finance experts have their agendas to be on TV. Maybe their suggestion of an investment product is driven by the wrong incentives by the product manufacturer.
Similarly, a stock name shared by the finance expert can influence you to act on it without doing your analysis.
There is no harm in getting influenced through liking for someone. However, the decision should not be based on the liking of the product or a person. Rather, it should be on its own merit and unbiased analysis. Not an easy task though.
コメント