And What to Do About It
We tend to think that memories are stored in our brains just as they are in computers. Once registered, the data are put away for safe-keeping and eventual recall. The facts don’t change.
But neuroscientists have shown that each time we remember something, we are reconstructing the event, reassembling it from traces throughout the brain. Psychologists have pointed out that we also suppress memories that are painful or damaging to self-esteem. We could say that, as a result, memory is unreliable. We could also say it is adaptive, reshaping itself to accommodate the new situations we find ourselves facing. Either way, we have to face the fact that it is “flexible.”
For most of us that usually means we recall a rosier past than we actually had, though some of us are tormented by memories of a painful past we can’t shake and that seems to get worse every time we revisit them. But for all of us that means an incomplete past.
Nothing brings this home better than the memories of witnesses in trials, one of the cornerstones of our legal system. All too many people have been put behind bars on the testimony of witnesses, who when challenged by more objective data have been later proved to be misremembering.
An extreme form of this is the unsettling phenomenon of those who confess to crimes they did not commit. According to a recent article in The New York Times, “False confessions have figured in 24 percent of the approximately 289 convictions reversed by DNA evidence.” (See, “Why Do Innocent People Confess?”)
Obviously these are not just simple matters of misremembering. False confessions can be motivated by a desire to avoid painful interrogations, to curry favor with jailors, or the false hope of getting the nightmare over with. But, then, all memories are motivated. It is just a matter of degree.
These facts are sobering for those of us who tend to rely on our unreliable memories, whether we are investors trying to recall what experts have told us or just going about daily business, trying to learn from our own experience.
It makes sense to keep objective records of our decisions and our acts. (If we use our computers for that, we can usually count on their invariant memories.) But we usually feel it is too much trouble to record so much information, and we avoid the task.
Much more pleasant and almost just as good is talking over our decisions with someone else. Indeed, if two or three or more people talk with each other regularly about their investment decisions—or any decision for that matter—they will not only help each other to recall their thinking more accurately, they will probably think better as well.
There is always the danger of Groupthink. But if you encourage disagreements and challenges, you are not only likely to avoid conformity but get better results.