If you are sad that you are not Bitcoin rich, it is because your brain is wired for regret

“Boy, I wish I had bought GameStop stock.” That’s a phrase I’ve come across from dozens of people in the past few days. I’ve heard it from friends, internet commentators, and folks at the gym. But this time it came from my father. This is a guy who doesn’t have a credit card and often asks me to order things for him on Amazon and then pay me back in cash, but here he complained about the fact that he didn’t buy his way into a highly speculative stock market game that was made by Reddit users orchestrated and running on trading apps.

That kind of regret is rampant in the stock markets these days, and with the casual investor bragging about raising tens of thousands of dollars, it’s understandable. Bitcoin’s recent hikes offer FOMO similar opportunities. Turns out you probably shouldn’t be kicking yourself as much as you are for missing the $ GME bus to Mansion Land, but your brain is wired with regret.

Review is 20/20

“Regret is based on a counterfactual thought,” says Amy Summerville, an associate psychology professor at Miami University, Ohio who specializes in regret research. People tend to think what begins with statements like “If only I…” or “What if…” that we need to reconcile with the actual reality of the real world.

“Between the ages of 4 and 7, we acquire the ability to process things about reality and another imaginary reality.” In this case, that imaginary reality is one where you bought GameStop stock when it was cheap.

This type of thinking happens in relation to everything from choosing a restaurant to choosing which smartphone to buy. Regret comes from decisions that people make even when they are not consciously and explicitly making a decision.

A 1996 article by Neal J. Roese and James M. Olson sought to unify three conclusions that lead to regret:

  1. A counterfactual thought about how things could have been different
  2. Causal assignment to a decision point that caused the actual result
  3. A hindsight tendency where the person exaggerates how much they actually control the situation.

Review bias is a crucial piece of this puzzle because it helps us deceive ourselves that we could have made a better decision. “A broad theme of human knowledge is that we are pretty good at interpreting the world in selfish ways,” says Summerville. “We tend to envision possibilities over time that we didn’t really envision.” While buying GameStop seems like an obvious step back then, it may not take the current situation into account. Did you actually have any money left back then? And even if you did buy some, would you know when to sell them to avoid even more regrets if you left money on the table? Your brain would happily assume this, but the actual answers to these questions are complicated. We have seen the same regrets with Bitcoin for years.

We give each other a lot of recognition

“A broad issue in the human condition is that we are pretty good at interpreting the world in selfish ways,” says Summerville. “If you got rich and bought bitcoin, you probably think that you are a financial genius, and not based on a lucky guess or that you were given good information. The opposite is also true. “

While Bitcoin- and Reddit-powered “short squeezes” may seem new and truly novel, the ideas of investing, playing in the market, or even playing directly, persist. Just as we regret not investing in successful companies, we congratulate ourselves on avoiding failed companies. If you haven’t had Enron stock, watching the company collapse can reinforce your belief that even if you never really got the chance, it is a wise decision not to buy it.

“We overestimate our previous options,” says Summerville. “If you ask a group of college graduates whether or not they could have taken an extra class in the last year, the majority will say yes. When you ask real college seniors if they could take another class, they are asking if you are insane. “The distance of time distorts the way we perceive our situation. The best time to buy Bitcoin or that exploding stock has always been a while.

There are different types of decision makers

According to Summerville, you can break the types of decision-makers into two main categories, with the majority of people falling somewhere in between.

  1. A person who wants to make the absolutely optimal choice for the situation
  2. A person who has a list of requirements to define a successful decision, and any solution that meets them will work.

Apply this thinking to buying a stereo. Do you want the absolute best stereo on the market so that your choice cannot be compromised? Or do you just want something that suits your needs? It turns out that people who fall more into the former camp experience more regret.

The same goes for Bitcoin and investments as a whole. Some people are content with financial stability or even make a little profit, while others can get into the fact that some people have made millions of dollars and have achieved the optimal result.

When should you be concerned?

You can get small amounts of jealousy or regret over things like the gamestop run into simple human nature, but according to Summerville, there are a few things to watch out for, especially rumination. “It’s okay to say, ‘Geez, I wish I bought this,’ then put it down and do something else,” she says. “If you hold onto it and it comes to mind really strong and uncontrolled, then it’s problematic.”

The silver lining

While you may have missed the stock frenzy right now, the regret provides an opportunity to shape future behavior. When you take the opportunity to learn more about the source of your regrets, you can make decisions as well as you can perceive your past self.

So make it easier on your past because learning from those regrets can make your current self happier, even without a fat pile of Gamestop money.

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