Don’t Confuse Brains with a Bull Market



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This is the 36th episode of the Effective Executive podcast. In this episode, Tripp Babbitt helps executives recognize attribution bias..  Download our Effective Executive Starter Kit.

Show Notes

The Effective Executive – Episode 36 – Don’t Confuse Brains with a Bull Market

Attribution Bias

Crypto Mania and the Dot-Com Bubble

Artificial Bull Markets




[00:00:00] This is the 36th episode of the Effective Executive podcast, and I named this episode. Don’t Confuse Brains with a Bull Market and. You know, I sit here and watch on occasion the financial channels and, you know, everybody’s been in an uproar over crypto currencies and all of this and how it’s always going to go up and all these things. And I almost feel sorry for people. And this is something, I guess, that comes with age. But after going through the dotcom bubble in nineteen ninety nine, I almost see the same pattern happening here. I owned a lot of different dotcom stocks. Two of them panned out, which was Priceline and Amazon at the time. But the rest of us want to let you know, they just basically went to zero and you know, I remember when Mark Cuban and his partners broadcast Dotcom, sold their company for billions of dollars type of thing, and, of course, then even that. Flat tire, so you have a tendency when things are going well and it’s it’s and it’s something called attribution bias, which is we have this ability to attribute success to ourselves and failures to others. And I thought this was a good subject to cover for executives because with all this investor hysteria just kind of got me going. And sometimes when I work with organizations that are doing really well and lots of revenue and and, you know, nothing could go wrong, it always does.


[00:02:03] But the attribution bias is not confusing brains with a bull market that they’re in a good trend. And, oh, I don’t need any help from the outside because of course, we’re really good. I’ve never seen an organization that is that good. Everyone can always use help from the outside to see things that they can’t see in themselves. So anyway, with all the crypto and everything going on, I thought what a great, great subject to cover. And, you know, you’ve got all these people that are portrayed as superheroes right now, like Cathy would with her innovation fund who’s never been in. And well, I don’t know if she personally has, but her fund has never been through a bear market. So she, in essence, has this money. You know, everybody has this Maita. Oh, she’s the guru. Well, not really. She’s you know, she don’t confuse brains with a bull market. And Dave Portnoy, you know, is out. He was on TV, TV a few months ago. And I remember him saying, you know, oh, the market always goes up, you know, don’t worry about it. And it may eventually. But you can really get damaged in times like these.


[00:03:23] I see all these people and executives that I’m talking to, you know, jumping into crypto right now. In my mind, it’s kind of at its peak. And again, I may be wrong, but I don’t think so. But anyway, that I see the same kind of mentality of, you know, with the executives that, you know, when they’re selling umbrellas in the rain, everything’s perfect. And, you know, I don’t need any help. I I’m really good. And like I said, it will eventually you’ll run into some adversity, adversarial type of situation, whether it’s from a competitor or some unforeseen circumstance within organizations. And so that’s that’s one of the things that, you know, I think executives especially have to guard against. I mean, people in your organization are going to tell you it’s their ego, which we all have an ego, a certain degree. But attribution bias is something that we all carry when we have a real success being it was a great type of thing. And then there’s what I call kind of the artificial bull markets, which is where people manipulate their financials in order to hit their targets. And, you know, I’ve had to stop working with organizations where I saw the manipulation going on, where they’re kind of fudging the numbers, if you will, in order to hit their targets for that particular quarter.


[00:05:03] Just in the long run, it hurts you. You might get your bonus that month and be gone the next quarter. You know, as an executive, sometimes it’s been found out and sometimes it’s just, you know, it catches up with you because you have to cut corners. And it might be because you you gouged the customer or you know, and I’ve seen all of these things go on and especially in industries where trust is needed, whether, you know, you always think of the occupations like attorneys. I’ve worked with many of those. But think of things like fact companies and plumbing, you know, those types of organizations where the customer really doesn’t know what a good prices or really if there’s something wrong or not. But I always find it. It comes back to haunt an organization when, you know, when they try to get some type of extra profit or kind of, I guess, lack of a better term, screw over the customer. So, you know, you have to, especially as an executive, have to. Wait for the the next downturn and kind of be even keel about what’s going on in your particular organization, otherwise attribution bias will take over. I mean, you attributed it to you alone.


[00:06:37] No one is is very wrong or to a person, especially in my system, where ninety five percent of your performance is going to be attributable to the system you work in and only five percent to an individual or special cause or event that that’s happening with your organization. And so. I just thought it was a good thing to bring up kind of check yourself maybe as an executive on what’s happening and, you know, this thing with the economy is going to run its course and you know, where people may be doing very well right now. I foresee some really hard times in the next six to 12 months, and I hope not. But but in the next six to 12 months, because, you know, we’re doing things and it lets the US economy that that’s going to cause some problems, you know, down the road. And I just want to everybody to kind of calm down if you’re doing really, really well, because now is the time to be looking for the downturn. And conversely, if you’re down right now, you know, good times could be ahead, too. So it’s just the way life is. And now, you know, the words associated with it are attribution bias and that you shouldn’t confuse or don’t confuse brains with a bull market.


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