I came across this chart below which examines the most common lies that people tell on their CV’s.
Source – YourGovUK
It is fairly obvious that the most common lie relates to either education or qualification and this is a point I have some personal experience with. Many, many years ago when I was silly enough to have staff we had an employee who stated on their CV that they had degrees in Economics and Commerce. Eventually it came time for licencing to catch up with employment and some piece of bureaucracy required a copy of the individuals academic transcript which was not forthcoming. So I rang the university where these degrees had supposedly been obtained and lo and behold the university had never heard of them. Confronted with this the employee insisted that they had been to university and did have both degrees, they even wanted to ring the university to fix the problem. What had transpired was that this individual had constructed a carefully crafted lie to appease his family after they had failed to gain entry to university. The lie was so complete they had forged any and all manner of documents to cover their tracks. I would even suggest that the lie was so complete that they actually believed it themselves.
We are all in some manner delusional about ourselves be it something simple and reasonably innocuous such as our level of skill at a certain activity through to delusions that probably border on the definition of mental illness, This is also undoubtedly true of people and their trading ability. I have met legions of professional traders who are convinced they are sensational at their job – most are rubbish. Paradoxically I have met private traders who are exceptional at their job but remain unconvinced and this lack of confidence is just as debilitating and destructive as the profound overconfidence suffered by most of the professional community. I have also found over the years that people who have an over inflated sense of their ability are also disconnected from the data that tells them otherwise – they either dont collect data or do not process it themselves in any meaningful way. When I first started trading there was no such thing as a portfolio manager – you recorded everything by hand, now there are a plethora of such tools that do almost all the work for you. For years I was on the quest for the perfect portfolio manager and I have used most, from low tech solutions to very high end professional products. But then I realised that the most complicated and efficient a portfolio manager become the more I was disconnected from what was actually happening with my trading. My results were at arms length to me, as such I didn’t notice small patterns and perturbations that were important Things such as strings of losses were not really noticed – the system recorded them and I saw them but I didn’t register them and because I didn’t register them I didn’t really perform any review to see if there was an underlying problem.
This situation came to an end when I dumped all portfolio managers and went back to using spreadsheets that I had constructed. My system now only displayed the information I wanted instead of reams of crap and I had to undertake the first two steps of data input – I was now reconnected with my data. Inputting data yourself dose not remove the possibility for delusional behaviour but it does cut down on it because after awhile it becomes hard to lie to yourself. Think of it this way – when people are attempting to lose weight there is a brutally effective tactic that is somewhat make or break but which when it works it works very well. Take a photo of yourself in the nude in front of the mirror everyday, the camera does not lie to you about your progress or lack thereof. Likewise taking the time to build your own portfolio manager and input your data yourself removes some of the lies we tell ourselves about our perceived ability.