WORLDVIEW: Westminster’s reminder that cool heads win in investing and life

By Alec Hogg.I received two unsolicited emails yesterday that were violently anti-Muslim. One claimed Europe's problems began when the Nazi's killed 6m Jews, and the subsequent guilt opened the doors to 20m Muslims. The other extolled the virtues of Japan's decision to stop Muslims from entering the country. .Apart from repulsive, like most Internet fables these widely circulated emails are mostly false and easily disproven. For instance, Japanese immigration forms have no place for the applicant's religion. There are numerous mosques in a country which is estimated to have 100,000 Muslim residents. Also, it is definitely not illegal (as claimed in the email) to take the Koran into Japan..___STEADY_PAYWALL___.This kind of email is sure to mushroom after yesterday's attack in Westminster, London by a bearded Asian man who used his 4×4 and then a large kitchen knife as murder weapons. Eerily reminiscent of the Nice murders, the terrorist drove a vehicle into pedestrians and fatally stabbed a Bobby before being shot dead. Such was the fear that within minutes of the news breaking, a "safety check" circulated on Facebook so Londoners could declare to friends they were not hurt..That sounds like an overreaction, but is entirely logical given the human condition. Negative episodes have a far bigger impact on our species than do positive ones. How much bigger depends on who you listen to – the extreme example being nine-to-one claimed by the founder of Bikram Yoga..Although not quite so specific, Nobel prizewinner and best selling author Daniel Kahneman has no doubt of this reality. He defined this triumph of fear over hope in terms of "loss aversion", proving through numerous experiments that homo sapiens would rather avoid losing than gaining something..It makes sense. For most of the 16 people who have previously walked the earth for each of the seven billion here today, a rustle in the reeds was an existential threat – a signal to run from a possible predator rather than to explore whether it was potential sustenance..One of the biggest secrets of investing is to train yourself to overcome this instinct by acting rationally at all times. As Warren Buffett keeps reminding us, when buying assets the best time to be greedy is when others are fearful. Opportunity knocks loudest when mass emotion is temporarily trumping logic..For those who were crossing Westminster Bridge yesterday, the deranged driver obviously posed an existential threat. But that doesn't mean the other 8.6m Londoners will stay indoors tomorrow. In the same way as it doesn't mean every bearded Asian is a potential lunatic. A cool head will always ensure the job is done better. In investing and life. Something to remember before distributing scary emails. Or being scared into selling those equities.

WORLDVIEW: Westminster’s reminder that cool heads win in investing and life

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