Analysis Paralysis Syndrome

[kcowan]

I am a stock picker and the search for 10-baggers can be exhausting. 2 out of 10 are 10x and 2 out of 10 are duds. The other 6 are regular performers. I have been doing this for 20 years and I get ahead by quickly divesting the duds.

But there is a wealth of information now compared to 20 years ago and that causes a problem. Has it improved the results? Well the results are better but I think the wealth of information is just more confusing. We are getting better at dealing with it.

On the little sh*t like household items, DW and I are pretty efficient. Same with cars. We make an educated guess, but it is easy to fix if it turns out wrong. Having said that, we have only had one wrong one!

We just sold our aluminum powder coated patio furniture for $325 on craigslist after 21 years. Reason? A color change was needed. That was a good buy!

 

[Koolau]

My paralysis has less to do with analysis and more to do with not really knowing how to proceed (in a technical sense.) For instance, I decided within minutes on our last several homes. But I would never have proceeded without a realtor. YMMV

 

[Sycamore]

You might want to try this: what is the difference between the odds of running into trouble if one only shifts withdrawal rate from 3% to 2.5%. Likely it will be: almost no difference at all given all the other factors in life that can make a difference (health, unexpected events).

If you are 99% certain to be dead by 95 years old, and the difference between 3% and 2.5% is a 5% higher chance of hitting rock bottom at 95, you are pondering a 0.05% effective difference. Bad example maybe, hope you get what I mean.

Totoro, Good point you made through your example, thanks for that input

 

[Milton]

I can make a pretty quick decision on a car or an investment, even a house, if I'm informed. The investment, for sure, comes down to a numbers/risk decision, and there's no personal taste "will I like this in a year" kind of factor to labor over. Looking at clothes on a rack, though, I can be stumped at times.

Makes sense. We are all a bit conflicted, and who really knows how their personal tastes may evolve in the future?

Another consideration: when one buys a 'blue chip' stock, one can have confidence that its market value is unlikely to seriously decline and that it can be sold on without too much time, trouble or expense. That can't be said for chattels, which are typically harder to accurately value and/or have huge depreciation.

While I do analyze a lot, once a decision is made, we move forward. Now, what I don't do is continue to analyze choices. I don't want to start kicking myself for not getting a better deal had I waited.

You don't have to worry much about that prospect: most people have a huge capacity for subconscious rationalization of their past decisions. See generally Daniel Gilbert, Stumbling Upon Happiness (2006).