Sometimes we focus so hard on something we think is important, we become oblivious to significant events right under our noses. This is the idea behind The Invisible Gorilla, a book based on a series of experiments by Christopher Chabris and Daniel Simons.
The centrepiece of their work is a short film in which two teams of three people pass a basketball between them. Viewers are instructed to count the number of times the team in white passes the ball. About half the people who watch the film are concentrating so hard on the white team, they fail to notice a person in a gorilla suit enter the scene, stop to beat their chest in the middle of the screen, then stroll casually out of shot. Those who spot the gorilla are usually caught-out by more subtle experiments with similarly obvious tricks.
The experiments are among the many that begin to help us understand how investors behave and they suggest that people are easily seduced by glamorous investment stories that dominate the news. Right now, for example, all eyes are on the US and how people are reacting to public sector workers being sent home. That’s the ball-passing game people are fixed on and so pages of analysis suggest what impact it will have on the economy, the dollar, interest rates and Wall Street. Yet this focus on the ever-changing headlines is often at the expense of more important slow-burning truths – the biggest perhaps being that holding on to a well-balanced mix of investments is generally more successful than endlessly chasing the news. This is the gorilla that people miss.
Sometimes we are smart-witted creatures capable of great feats of intelligence. But other times, much of our behaviour is governed by instincts that were hard-wired into our brains tens of thousands of years ago. This means that, sometimes, we fail to spot the gorilla.