Collective mindset (herd mentality) and the implications for the economy worldwide
I have been working as an Executive Coach for 35 years and for the past 22 years I have focused on the importance of our mindset in creating the results we want in our lives. For the first 10 years I focused on changing behaviors as a way to create a result, and while it worked short term, it didn't have staying power and was quite labor intensive. Then I learned the power of "mindset", or the power of ones mind.
Today we are facing a collective mindset which has a proclivity towards seeing doom and gloom in our future and is driving us towards that very future. In the 2004 election it was fear that drove our decisions because of the fear promoted by the Bush/Cheney Administration to scare us into voting for another 4 year term for them, as they were the only ones protecting us from another attack. As sheep, many voted their fear and we got another 4 years under their leadership.
We now face the fear of a financial institution collapse and subsequent economic meltdown. This has precipitated runs on banks to withdraw cash, major drops in the stock markets and credit availability nearly at zero probability of getting any.
The collective mindset of fear is at work. How will we collectively get out of this spiral mess and what can you do? And what got us into this mess in the first place? Greed got us here and it is the flip side of the coin of fear. In part that is the answer to get us out of this at an unconscious level. The place where to look for a reversal will be in the stock markets. As stock markets go down precipitously, there is a point where some decide there is a chance to really make some money and they jump in in the final stages of the drop in stock prices, often called "Capitulation". Our stock markets have gone down almost 20%. They are ripe to drop more but there will be a bottom where the first courageous ones jump in and take a risk and buy stock. If the drop is severe enough, there will be a rebound. As the rebound is reported in the media, it should get those who have moved from fear to greed to start buying with a vengeance. The same process happened in the markets after 9/11.
It takes a lot of self confidence and control of ones emotions, to manage to do this as an individual. It is easier to be caught in the actions of a crowd and to go along with the crowd. Most individuals don't believe they really make a difference if they take an action. But the truth is that every individual does make a difference. So the way out of this is NOT to panic, not to wonder what everyone else is doing and follow along. It is best to decide what is right for yourself, being mindful whether you are following a crowd or assessing the situation for yourself.
Here's an example to test yourself. Think back when you made your last purchase in the stock market. Did you make that purchase on a day when the stock you were purchasing was going up or going down? Think about 9/11 and ask yourself did you sell at the first chance you had when the markets were closed for a week or did you buy? Most people Buy when a stock is going up quickly and they sell when a stock is dropping quickly. A select few sell when everyone is buying and buy when everyone is selling. This was the case most recently with Warren Buffet, America's finest financial Guru, when he invested in Goldman Sachs and GE.
We have a chance to influence the future we want. Barack knows that when he says "the change we need comes from the bottom, not the top" or "you are the change you have been waiting for". How can you help immediately. First, decide that the Banking industry is now under control. If you have cash you have withdrawn from your banks, return it to the bank. If we all have faith and we believe our deposits are insured now up to $250,000 from the $100,000 limit in place before the Rescue Plan, then we can help the government help the banks start to lend money again by returning our cash. We can continue to frequent our local restaurants so they don't go out of business and we can plan for a wonderful Christmas. Remember it is the Consumer who controls 2/3rd's of the economy, while the other 1/3rd is controlled by Corporate buying.
Let's ensure that our collective mindset is focused on seeing the future we want, not the future we have inherited. You have the power, as do I. Let's use it collectively for the good of all.
Today we are facing a collective mindset which has a proclivity towards seeing doom and gloom in our future and is driving us towards that very future. In the 2004 election it was fear that drove our decisions because of the fear promoted by the Bush/Cheney Administration to scare us into voting for another 4 year term for them, as they were the only ones protecting us from another attack. As sheep, many voted their fear and we got another 4 years under their leadership.
We now face the fear of a financial institution collapse and subsequent economic meltdown. This has precipitated runs on banks to withdraw cash, major drops in the stock markets and credit availability nearly at zero probability of getting any.
The collective mindset of fear is at work. How will we collectively get out of this spiral mess and what can you do? And what got us into this mess in the first place? Greed got us here and it is the flip side of the coin of fear. In part that is the answer to get us out of this at an unconscious level. The place where to look for a reversal will be in the stock markets. As stock markets go down precipitously, there is a point where some decide there is a chance to really make some money and they jump in in the final stages of the drop in stock prices, often called "Capitulation". Our stock markets have gone down almost 20%. They are ripe to drop more but there will be a bottom where the first courageous ones jump in and take a risk and buy stock. If the drop is severe enough, there will be a rebound. As the rebound is reported in the media, it should get those who have moved from fear to greed to start buying with a vengeance. The same process happened in the markets after 9/11.
It takes a lot of self confidence and control of ones emotions, to manage to do this as an individual. It is easier to be caught in the actions of a crowd and to go along with the crowd. Most individuals don't believe they really make a difference if they take an action. But the truth is that every individual does make a difference. So the way out of this is NOT to panic, not to wonder what everyone else is doing and follow along. It is best to decide what is right for yourself, being mindful whether you are following a crowd or assessing the situation for yourself.
Here's an example to test yourself. Think back when you made your last purchase in the stock market. Did you make that purchase on a day when the stock you were purchasing was going up or going down? Think about 9/11 and ask yourself did you sell at the first chance you had when the markets were closed for a week or did you buy? Most people Buy when a stock is going up quickly and they sell when a stock is dropping quickly. A select few sell when everyone is buying and buy when everyone is selling. This was the case most recently with Warren Buffet, America's finest financial Guru, when he invested in Goldman Sachs and GE.
We have a chance to influence the future we want. Barack knows that when he says "the change we need comes from the bottom, not the top" or "you are the change you have been waiting for". How can you help immediately. First, decide that the Banking industry is now under control. If you have cash you have withdrawn from your banks, return it to the bank. If we all have faith and we believe our deposits are insured now up to $250,000 from the $100,000 limit in place before the Rescue Plan, then we can help the government help the banks start to lend money again by returning our cash. We can continue to frequent our local restaurants so they don't go out of business and we can plan for a wonderful Christmas. Remember it is the Consumer who controls 2/3rd's of the economy, while the other 1/3rd is controlled by Corporate buying.
Let's ensure that our collective mindset is focused on seeing the future we want, not the future we have inherited. You have the power, as do I. Let's use it collectively for the good of all.
Labels: banks, capitulation, cash, Consumers, Corporate, fear, government, greed, mindset, stock market, Warren Buffet
posted by Charles Amico at 6:06 AM
2 Comments:
Charles, I agree that each individual needs to think and act for him or her self. However those of us who have disposable income probably, like me, don't need anything. And neither do our children or grandchildren. We have a surfeit of "stuff", so much that my daughter has begged me to not buy things, except for necessary items. Our four households lack any more storage space. Rather, I suggest that we each find a needy child or family and provide them with a "good" holiday.
CAM
Great idea. Thanks!
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