Don’t be a bad ass(umer)

Sonnie Bailey

16 April 2021

There’s a saying that if you assume something, you run the risk of making an “ass” of “u” and “me”.

Ie: ASS = U + ME

The reality, however, is that we all make assumptions, all the time.

On this basis, we’re all ASSes.

The question is: are you a bad ASS?

When we plan for the long-term future, we assume that there’s a future to plan for: that we (or our loved ones) will be around, and that the world will be fundamentally similar to its current state (ie, we’ll be living in a civil society with rule of law, electricity, and working sewage systems).

As much as we’d love to be able to make decisions based on the “gold standard” of evidence (ie, based on randomised, double-blind, prospective studies), it’s simply impossible.

Most of the time this type of evidence isn’t available, or it’s impractical or impossible to acquire.

Most of the time, our decisions are based on very unique circumstances that have never been modelled before.

We need to make assumptions, and have degrees of confidence about our views.

When new information comes to light, we need to be able to adjust our assumptions.

But we’re still working with assumptions.

Want to make an ASS out of U and ME? Make bad assumptions, and don’t adjust ever adjust them when new information becomes available.

Want to be less of an ASS? Work hard at making better assumptions.


Other articles you may like:

SLB on FTX and SBF

SLB on FTX and SBF

An unplanted seed never grows! A proposal for a charitable service for providing financial advice. Any takers?

An unplanted seed never grows! A proposal for a charitable service for providing financial advice. Any takers?

Wholesale fund managers aren’t toddlers but the FMA seems to treat them like they are

Wholesale fund managers aren’t toddlers but the FMA seems to treat them like they are

Why I’m preoccupied with existential risks – and you should be, too

Why I’m preoccupied with existential risks – and you should be, too

Unregulated finfluencers and educators

Unregulated finfluencers and educators

Unregulated financial coaches: I’m not sure how they do it!

Unregulated financial coaches: I’m not sure how they do it!