Best of Habits Mindset Tip of the Week

Why has everyone got it so horribly wrong?

I read around five main topics. What’s frightening is that the prevailing paradigms are usually based on incorrect assumptions:
– Training for hypertrophy/strength
– Nutrition for body composition
– Learning and memory
– Religion and spirituality
– Personal finance

Nutcases, we salute you

There’s an unwillingness to change, to shift to a new paradigm. The early adopters are considered crazy, then the masses follow much later. It’s a delayed process: a well known concept in product innovation and technology adoption:
If someone told you in 1995 that TV and newspapers would crash and burn in a decade you’d look at them funny.
or death of the physical book.
or online dating.. early adopters seen as creepbags, now you’re a grandad if you don’t have a tinder profile
Posting our family photo albums publicly?
Or that best friends could sit together in a room in silence for hours absorbed in their phones… 
The same thing happens with ideas: the innovators and early adopters are the weirdos until it becomes commonplace. The earth isn’t round. Don’t be silly.

Post hoc ergo propter hoc

Otherwise known as ‘correlation does not equal causation’.
We do things a certain way, and get a certain outcome.

Naturally, we retrospectively think all of our behaviour was necessary to achieve the goal.

We think our diet worked because of our impeccable nutrient timing, or we got bigger arms because we did our curls with a little twisty.

We don’t challenge at the status quo, because we don’t have the time, inclination, or perception of expert knowledge.
If we’re particularly unfortunate we’ll even start to defend and justify our viewpoint violently. That’s when we’ve really imprisoned ourselves.

Worse still, we start to see data that would prove us wrong, so we start doing this.


Ego gets involved, then it becomes even harder to say

I was wrong’
It takes a certain kind of gall to say ‘you know what? In light of the newer evidence, I can no longer see a causal link between vaccinations and autism’
To call yourself a scientist, you need to know when you’re wrong, swallow your pride and admit it.

But it’s easier to just shout louder rather than risk your reputation…

The video above outlines what is effectively ‘mount stupid’ in fitness, and how to see past it.

'Mount stupid'
‘Mount stupid’


Another example is in assessment of risk. This is most commonly in a situation where an unsexy threat (heart disease) doesn’t stir up much emotion compared to a more dramatic, sexier one (terrorism). Here’s the data:

So let’s start with some things that we used to get horribly wrong:

1) Hypertrophy and strength


Status quo:
– Training to failure: drop sets, forced reps

– Take a pharmaceutical grade preworkout and ‘destroy dem biceps’

– Declare war on your legs and squat til you puke



What the data suggests:

– Puking is not anabolic.
– Training response is a result of adaptation to stimulus, not punishment.
– Just because a workout is ‘hard’ has no bearing on the gains without progressive overload.


– Focus on total volume, not muscular failure.
Skip the occasional workout if you need to.

– If you want to do more, train with more sets or higher frequency.


A classic case of 'post hoc ergo propter hoc'. And yet we fall for it hook, line and sinker.
A classic case of ‘post hoc ergo propter hoc’. And yet we fall for it hook, line and sinker.

Further reading:

1) No pain, still gain – focus on  regardless of failure:

2 – Nutrition for body composition:


Current paradigm:

– There are ‘healthy’ foods and ‘unhealthy’ foods. Eat less unhealthy foods and more healthy ones, and you’ll lose weight
– Breakfast is the most important meal of the day, and needed to kickstart your metabolism
Carbs are evil
Fat is evil
– Everybody is gluten intolerant, and it’s making you fat
– Eat every 2-3 hours to prevent metabolic slowdown
Superfoods are especially magical.
– Alkalise your body with the right nutrients to lose fat


What the data suggests

It’s any calories
– There’s no such thing as ‘clean’ food
Low carb vs high carb diets 
– Carbs/fat are not the problem, stupidity is
‘Gluten intolerance’ is mainly fear-mongering 
pH balance is incredibly tightly regulated without the need for your kale and spirulina intervention.
Occams razor: supposedly ‘alkaline’ foods (i.e. vegetables) are more filling, so you eat less food. More to do with volume than alkalinity – let’s not overcomplicate things.
We all seem to be moving in the right direction in nutrition, but we’ve taken our bloody time about it. 

3 – Learning & memory


Current paradigm:

– Schooling of independent pockets of data in unrelated subjects.
– Didactic, linear teaching
– Massed repetition: cram for your exam, then stop and move on to the next subject
– Learning by rote

– Teaching facts in isolation



What data suggests:

– Active processing/engagement with subject matter
– Comprehension and conceptual links
Spaced repetition enhances recall
– Visual associations


Screen Shot 2013-08-29 at 01.49.54
Image source: GMS
 Memory recall is produced from the base elements of the brains analytical system. Images are generated upon request from a stimulus via the principle of resonance (adding energy to a system at a given frequency increases amplitude of that frequency).
Teaching unconnected facts by rote does not account for a fundamental principle of memory that it is impossible to learn pure data in isolation without an association. As a result, things are learned by attrition with a low success rate. Therefore the ‘attrition’ approach effectively causes learning by accident, where the raw data is inadvertently associated with a sound, the phonological loop of the words, or some other incidental circumstance that coincided with the learning event.


4 – Religion & spirituality

A debatable metric to use, but at least a measurable one: Happiness.
Assuming the goal of religion is to make humans happier through union with God, then it doesn’t appear to produce a clear advantage in the data[1] [2] [3]. In some cases using religion as a coping mechanism is associated with higher levels of depressive symptoms.[4]


Those with an intrinsic religious orientation appear to be happier than those with an extrinsic one. ‘…and happy people see their religion not so much as something they “do”, as what they “are”.

Perhaps this explains the murkiness of the data. The amount of religiously motivated violence in the world relates to an extrinsic focus, suggesting someone maybe misheard the instructions along the way.
So it seems like there is a missing link, distinct from religious ‘belief’ or ritual alone.

It’s no coincidence that ‘the world’s happiest man’ Mathieu Ricard is a Buddhist monk

Worlds happiest man according to University of Wisconsin MRI metrics
The happiest people, the enlightened characters [5][6][7][8] often sing the same tune: that anthropomorphising a deity is literalising what the holy men of history have tried in vain to communicate. “The map is not the territory”.
“Truth has nothing to do with words. Truth can be likened to the bright moon in the sky. Words, in this case, can be likened to a finger. The finger can point to the moon’s location. However, the finger is not the moon. To look at the moon, it is necessary to gaze beyond the finger, right?” – Huineng

Eastern philosophies, including Hindu, Buddhist, Taoist and Sufi approaches, are sophisticated and elegant. They can provide, particularly for the Western mind, powerful new tools to deconstruct or reconstruct the heavily-conditioned mind into a more holistic model and potentially even to transcend it completely. Unfortunately, what often results is yet another religion with rigidified beliefs, certainties and practices far from the understanding of its founder(s). It does, however, provide many opportunities for new, exciting and endless philosophical discussions. Philosophy can be a great ally on the path to awakening, but it can be a terrible master. – Gary Weber
They consistently state that doctrine is a pointer to encourage introspection and meditation to cultivate our own happiness. So in my opinion, intrinsic focus is the missing link between happiness and religion. Something critical to well-being, yet missed by the majority.


5) Personal finance


Status quo:

– Live for payday, maybe even go for a payday loan at 2000% APR
– Multiple credit cards, maxed out
– Buy your car on finance
– Always looking for a pay rise
– Salary as the main source of income
– Invest in actively managed mutual funds, chosen by a financial advisor, got to leave it to the experts ey?

What the data suggests:

– In the long run, 86% of actively managed funds underperform their benchmark before fees. The ones that do outperform the benchmark often erode profits with fees. I’ve worked for a fund manager – can confirm it’s a very labour intensive process operationally to run. Management fees bleed away returns.

A typical credit card charges 18% APR. Find an asset that pays you 18% and I’ll give you a million pounds. (lol if you find that, you won’t need the million pounds).

Via Robert Kiyosaki

Further reading:

“Winning the losers game” – Must watch documentary on active vs passive funds. 
Robert Kiyosaki has some excellent books on flipping the above model on its head.


There’s a few from us. I’m sure all areas of knowledge are prone to folklore, error and cognitive bias – I’d love to hear about where you see this in your particular area of expertise.

6 replies on “Why has everyone got it so horribly wrong?”

On finance (because it’s the only one I know anything about):

(1) Hold passive, not active

I think this advice follows for “finance”, but not “personal finance”.

The efficient market hypothesis at least seems to hold in its weak form, if you’re solely looking for returns in equities alone, passive probably works better.

But in the real world, very few people are just looking for returns, and even fewer on just stocks. Very few people invest in a pension that’s just comprised of shares. Most people are so risk averse that they also want to hold less risky assets (stocks, cash).

So actively managed multi-asset investments probably do make sense for a lot of people – as it’s impossible to hold “the index” across financial assets broadly, how would you determine composition?

This gets particularly tricky when you consider classes that have both investment-y and consumption-y property (art, wine). How do you determine how much of their value is investment, and so how much a cross-class index should hold in them.

(2) Don’t use an 18% APR credit card

First, I’d contest that APR isn’t a useful metric here for the same reason it is isn’t useful for payday loans – it doesn’t work for short time periods.

No-one pays APR on the latter (no payday loan provider lets interest roll over for a year), but regulators mandate that APR is displayed.

And this advice is essentially, don’t take debts where the costs of servicing those debts don’t at least match the expected return of whatever you’re using that cash for.

Depending on your discount rate, you may be able to find cases where this condition is met. Certainly for younger people.

If this wasn’t true, it certainly wouldn’t make sense to ever borrow to fund your way through University/college (most of us in the UK don’t do this for undergraduate study, but plenty do for Masters-level qualifications).

But of course many take this route. The sacrifice of debt payments later makes sense for a lot of reward now. You’re effectively bringing forward higher expected income from future periods. It’s rational!

Thanks for the input Peter

1) I see what you’re saying in that there won’t be an ETF for every remit compared to active funds – I think the issue with holding multi-asset portfolios is that ultimately people ARE seeking return with a perceived protection from risk that an actively managed fund supposedly gives them. The problem is that as stock-pickers with a benchmark, they:
– rarely outperform the index
– often have long-only mandates so have little to no protection from downside risk. Or worse, maximum cash limits during high volatility periods. Effective exposure increases during high volatility so any hedge fund manager would consider it ludicrous to have limits on how much they can de-risk.

I’ve got a major problem with claims of ‘diversification’ protecting your downside. Yes, during times of market health holding uncorrelated assets may minimise volatility but as we’ve seen this last week, previously uncorrelated assets converge to a correlation of 1 during extreme selloffs.

So I’d argue that it’s the deliberate asymmetric information that sustains the illusion that active funds are superior for a specific purpose. Bear in mind I’m talking about benchmarked funds, not hedge funds here, where cash is an option.

2) Totally agree with your point on expected return – perhaps the issue is more with marginal discounting of utility (or maybe just carelessness!), in that it’s a very avoidable problem by being a step ahead of yourself with a reserve account (at 0% APR lol).

Not convinced that APR doesn’t work for shorter periods though – the fact that the debt isn’t held for the full year doesn’t change the rate? Would be good to see a daily/weekly rather than annualised rate in the adverts though for those without a calculator

1) Yes, the industry as a whole spends a lot of money trying to convince punters that active, smart management can beat all the other dumb investors out there – it’s all tosh.

But I think almost all of these points are correct from a “finance” perspective, just not a “personal finance” one.

Would you recommend that someone saving for retirement should buy and hold the SP500, or the MSCI World Index? Same thing applies if we’re just talking about benchmarked funds – people saving for their funds won’t be considering these alone.

Your example of the last week speaks to the same thing I think. I’d distinguish between “trading” and “investing”, and say that would be retirees should be thinking more about the latter, not about what happens during particularly weird moments.

Those with equity-heavy portfolios can and do suffer if they take retirement at the same time as a heavy correction in stocks. Some loss protection makes sense for them

2) Think this argument over whether lending is appropriate – people’s risk aversity/discount rate is wrong – is just over whether people’s preferences are wrong or not.

Of course it’d be better if it was avoidable for everyone, but on many occasions people find themselves backed into a financial corner and have to accept a lesser evil.

As for APR, it doesn’t work because it’s unnecessarily scary. It leads to advertising on Wonga loans having to display 5,000-6000% APRs, which are needlessly fear inducing – no customer will ever pay them.

These products are structured so that the payments never compound over anything like this time period (even when creditors fail to repay), so the APRs are entirely fictional.

My preference would be for lenders to display representative amounts of interest a customer will end up paying, and displaying what amount you will be paying on your particular loan agreement (which I believe most still do voluntarily).

1) Agreed on distinction between investing and trading – so then assuming the pension investing route, it’s a level playing field except for the actual fund/ETF selection. So I guess that’s the final information barrier before we can make a direct comparison between active and passive if someone doesn’t know what their parameters should be (guessing that was what you meant by SP500 vs MSCI). In which case a financial advisor *should* be able to close the gap and advise the layman on a selection of passive funds that match their timeframe. Except they’re naughty and don’t always put the clients interests first.

2) I also prefer your policy. In for Pete Spece Wonga CEO 2k15. Robert Kiyosaki’s main idea is that people being backed into this kind of corner is unnecessarily prevalent, even among those with decent salaries due to prematurely upsizing their liabilities. i.e. that the whole paradigm is upside down

[…] Comments like this betray a fundamental misunderstanding of how insulin works, and a refusal to update their understanding. As you’ve seen over the years, we’re pretty open about the evolution of our thought, our blunders and wacky ideas. The industry perpetuates this asymmetry of information: it’s goal is to keep punters in the dark so that they keep buying the programs, spinning their wheels and never really knowing why. More on this here. […]

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