December 1, 2009
Retired Marine Corps Major Patrick Gould, Ph.D., tells a story of his friend Glen, the minefield commander at Guantanamo Bay, Cuba.
“We had dummy mine fields and we had real mine fields. Glen knew where every real mine was.
“I said, ‘Glen, if you came across a cordoned-off area in the center of the base, and it had minefield signs all over it, would you go in there?’
Glen asked, ‘There wouldn’t be any mines there?’ And I said, ‘Yeah, but would you go in there? You’re the guy who knows where every single mine is on this base. Would you go in there?’
“He thought about it … and said, ‘Well, no.’ It would take a very confident person to say it’s a fake and blow through it.”
Gould describes what he calls “the horns” of the dilemma: Does an opposing tank commander choose to drive right through the sign, effectively taking a gamble that the sign is lying and there are no mines in the ground, or stop and risk enemy engagement?
Gould’s point? To stress the value of decisiveness. A tank commander pausing to read the signs makes the irrationally conservative decision to do nothing rather than risk the mines. All Gould needed was the enemy to take this extra time; by that point, he could have already brought a significant amount of fire down on the enemy.
Gould relates this story as one of the lessons in his book, Prudent Decision Making in an Imprudent World, available via the link above. He lays out strategies for determining the best course of action, arriving at a decision well prepared and reasonably secure, and ultimately achieving the best possible outcomes.
Indecisiveness has its costs in investing, as Gould notes. The longer it takes for a person to decide what to do with his or her financial future, particularly when it comes to saving for retirement, the more opportunities to realize potential benefits they lose. As the book states, “No decision applied to your long-term financial welfare can be as destructive as a poorly made decision.”
His theories prove useful for understanding decision-making in all arenas, not just those that involve life-and-death decisions. He applies many of his theories of risk, reward, preparation, security, and asset management to the financial world, working from modern portfolio theory and ultimately offering a practical decision method.Gould draws heavily from his twenty-year career in the US military, during which he was a commander and instructor. The stories he relates share common bonds of preparation, information gathering, and risk management.
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