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The Importance of knowing your Behavioural Blindspots

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The Importance of knowing your Behavioural Blindspots
By David Hobart

A behavioural blindspot often occurs when your actions are in conflict with your objectives. They are outside your conscious awareness (hence a blindspot) and due to this conflict, they leave you in a state of dissatisfaction. Few of us deal with these blindspots before they cause damage, whether it is losses in markets or friction in our relationships. Understanding the causes of these blindspots helps to illuminate them early, reducing their negative impact and allowing you to more fully experience the future you have consciously chosen. Due to the risk taking nature of the investment business, understanding the origins of behavioural blindspots is an invaluable addition to your knowledge base as an investment professional.

What is a behavioural blindspot?

A behavioural blindspot is a learned pain avoidance mechanism. They develop as a result of painful emotional experiences from early in life forged at the same time as much of our accepted identity. Consciously, we think that our identity in large part serves us well in the world, but the flip side to a well formed identity is the blindspots that cover up what we have been trying to avoid.

Identity and Blindspot formation – a personal example

Identity and the associated blindspots develop over many years up to around late teenagehood. They are formed as a result of a number of highly emotionally charged experiences that have similarities in terms of the emotions felt, even if the outward experiences are unrelated. One of the first such experiences that I can recall was when I was around five years old. My two older brothers and I went exploring around our house near a storm water drain which was deemed strictly off limits by our parents. As Murphy would have it, I fell into the drain and was then fortunately fished out by my eldest brother. When we arrived home, my father was a little suspicious of the mud covered state of my clothing and proceeded to interrogate us. The truth spills out, which was simply that I fell into the drain. My eldest brother proceeded to receive a flogging befitting a paedophile, my middle brother a lesser punishment, but not unreasonable for an armed robber. By this time I was howling like a banshee in the hope that Dad would take pity on me and subsequently I received little more than a pat on the backside that you might give your family pet for being playful. The strong emotional imprints left were that of guilt for my perception of it being all my fault and shame for getting out of what I perceived as a just punishment. My perceptions left the imprint, not the facts of the event itself.

I recall this event because of the strong emotion experienced at the time. While it was only one of a number of events with similar emotional linkages over the course of 10-15 years of my early life, it forms part of the fabric of my identity and blindspot development.

So how did this play out in terms of my blindspots and my identity?

It’s worth remembering that a singular experience like this is typically not enough to forge patterning of an enduring nature. Although given the strong emotion experienced and the linkages between parts of the brain (hypothalamus and amygdala in particular) and the autonomic nervous system, we have considerable physiological resources focused on identifying similar emotions and treating them as a threat. This is why when we have similar emotional reactions to different events, we tend to train ourselves to behave in similar ways as a defence mechanism.

As a result of this along with my perceptions around numerous other events over my early years, I developed a way to exist in the world which generally didn’t require me being at cause in other people’s lives. In my work, I became a trader, limiting my requirement to work in a team. I projected onto the world an identity of being an independent thinker and a contrarian. All of this enabled me to get away with not having to feel the shame of letting people down and it being all my fault. Trivial when looked at in the cold light of day, but we humans are a delicate bunch.

Of course, identity formation is a double edged sword. When I felt shame, I retreated and withdrew from the world. My overwhelming sense was that I could not be relied upon, so it was typically best if I removed myself to where other people were not. This impacted on my ability to relate to people consistently and meant that I missed considerable opportunity to collaborate and be a valued member of a community.

So where is the blindspot in all of this? Until I was able to uncover this dark edge to my identity, I was completely blind to what I was missing. I would find myself retreating from situations which my subconscious mind perceived as threat, while any rational being would construe these situations as opportunity. So when lacking awareness of my own blindspots, the opportunity loss was significant. In trading, this has meant that I’ve often been contrarian to a fault, leading to particularly long periods of missed opportunities when the markets have been trending.

So what?

Taking the time to identify your blindspots allows for a much richer experience of life. Much of our fears and trepidations are wired into us based on experiences from our past, not based on the facts as they occur in front of us. By understanding the double edged nature of your identity formation, you can experience greater freedom in your choices and be confident that your decisions are based on current realities, not past impressions.

About David Hobart

David has been a trader and portfolio manager since 1994. He has managed teams of traders for global investment banks and hedge funds including BT, Macquarie, ABN Amro and Blue Sky Alternative Investments. He has worked with numerous traders and portfolio managers as a trading coach/performance consultant. For a detailed review of David’s CV, please see his LinkedIn profile.

If you would like to find out more about David’s trading coaching/performance consulting programs or to book a session with David, click on the button below:

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