Why are we so gullible?
We’ve all gotten them: emails from a Nigerian price, offering us unimaginable riches if we will facilitate a cash transfer. Or someone we know has gotten a phone call from the grandchild in Mexico who is in trouble and needs money. Or we’ve gotten a call from the IRS telling us that we’ll be charge with tax-evasion if we don’t pay a past bill with a credit card.
We love to listen to stories. Whether it’s The Illiad or The Little Prince, or minds and hearts get engaged when we hear about someone who’s trying to get back home, or in a conflict with a clueless boss, or who has lost a family member. We project ourselves into that situation and ask, “What would I do? And what should I do now?” We get engaged, our sympathies aroused, and then the con-artist strikes. “Never give a hot mooch time to cool off,” one noted. “You want to close while he’s still slobbering.”
There are two types of thinking: propositional and narrative. Propositional thinking asks, is it true? Does it correspond to reality? How can it be tested? Narrative thinking asks, what’s the story? What happened? Where’s it going? The most effective cons are narrative. They allow their marks to project themselves into the plot-line in a role that the artist creates—as a lucky beneficiary, or a rescuer, or—ironically—someone who just avoids being a victim. The biggest cons, from Madoff to Charles Ponzi to the guy who sold the Brooklyn Bridge, know this.
Storytelling is part of the human psyche. We can’t make sense of the world without stories. The format may change—from ballad to book to blog-post—but the art of the narrative is pretty constant. Just be careful the next time you hear or read a story that pulls at your heart-strings. And check out the facts, before you pull out your wallet.
Douglas R. Tengdin, CFA
Chief Investment Officer