The Hindu Business Line : Magical thinking

My friend's neighbour always buys shares of Reliance Industries only on Mondays. When questioned about his trading behaviour, the neighbour said that he "discovered" over a period that he got a higher return if he bought the shares on Mondays.

The answer may leave you speechless. Yet, if you were to reflect on your behaviour, you might have sometimes displayed such sentiments. Have you ever worn your "lucky" shirt to your most important business meeting or to your exams, despite your mother or your wife telling you that the shirt had lived its life? There is a term to describe such behaviour. It is called magical thinking.

It refers to the behaviour that leads us to believe that there is a causal effect. Consider your "lucky" shirt. You may successfully write your exams or conduct your business meeting well every time you wear that shirt. And so may conclude that the shirt is, indeed, lucky. Yet, your shirt may have nothing to do with your success.

The few people who have not experienced such "magical thinking" may conclude that such behaviour is superstitious. They may be right. But as psychotherapists would agree, such behaviour can be used favourably through the power of positive thinking. How?

You believe that your meeting will be successful if you wear your lucky shirt. Such belief can lead to what psychotherapists call as the power of positive thinking. That is, your positive thinking can lead to a self-fulfilling prophecy. It was, perhaps, such positive thinking that helped my friend's neighbour profit from his Monday-buys of Reliance shares.

(The author is based in Ontario, Canada)

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