Jun

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The Appeal of Cynicism, from Russ Sears

June 30, 2011 |

There are several reasons that cynics are on the rise in my opinion.

1. People assume the cynic is the expert. The cynic has an aura of authority.

2. Cynicism is masked as realism.

3. People assume the cynic is a healthy skeptic. On first encounter these two are hard to distinguish.

4. The cynic guards against disappointment.

5. The cynic creates an “us” against “them” world. "We won't be fooled again" by "them".

6. It is easier to find a problem than create a solution or even understand how complex creativity works.

7. It is easy to ignore the positive. Hard to ignore the negative.

8. People assume their bias is only one sided: When they like something too much. People recognize their biases when there is favoritism but justify their biases when there is disdain or prejudice. The cynic reinforces that their biases are the only morally defensible ones.

9. The cynic has many times when he is proven wrong, but it is often hard to pinpoint the opportunity cost to that cynicism (for ex. the profit he missed by staying out). However, when he is proven right, it is very easy to see how much he has saved.

10. The belief that Type II errors or believing falsely in a person are much more damaging than Type I errors or not giving a good person a chance. Despite the time it takes for a person to prove she is proficient and the moment it takes to lose trust-worthiness.

11. The cynic is elevated as “your own man” by the media and politically. Thus becoming the “go to person” when they want something said or done. This creates all sort of side agreements and quid quo pro understandings. Every TV program needs the phone numbers of a few favorite cynics.

12. Ironically, the person most likely to publicly be called down for their cynical tendencies is the person that is cynical towards the celebrated cynic.

Con-artists understand deeply the appeal of cynicism and use it against their prey.

The cynic is the ultimate champion for the status quo. The cynic can define people by their weaknesses not their strengths. Since everybody has weaknesses, they can dictate who is important by defining who is not important. Old man’s disease is giving in to the appeal of cynicism.

Rocky Humbert writes:

"A cynic is a man who, when he smells flowers, looks around for a coffin."

H. L. Mencken

In the spirit of not being a cynic, I note today's news story reporting that volunteers in Japan are being asked to grow sunflowers to produce seeds … so even more sunflowers can be grown in areas contaminated by radioactivity from the Fukushima disaster. The proponents say sunflowers can efficiently absorb radioactivity from the soil in a process known as phytoremediation. Here's the news story.

The skeptic (as opposed to cynic) in me thought that this sounds like an example of "green" people confusing Flower Power with nuclear physics. But a little bit of research reveals a bit of "sunny" science for the weekend. There is REAL science here! Sunflowers (and certain other plants) CAN decontaminate radioactive soil faster and cheaper than many other approaches. Chernobyl was a large-scale proof of concept. Here are 2 of academic papers on the subject:"Screening of plant species for comparative uptake abilities of radioactive Co, Rb, Sr and Cs from Soil,"Gouthu et al ; Journal of Radioanalytical & Nuclear Chemistry" and "Uranium Absorption Ability of Sunflower, Veiver and Puple Guinea Grass," Roongtanakiat et al (2010)

SO THE MORAL OF THE STORY IS: "A cynic is a man who, when he smells flowers, looks around for radioactive contamination."

Pitt T. Maner III comments:

The phytoremediation and bioremediation fields have bloomed to aid companies tasked with difficult cleanups. Even earthworms can be useful with certain contaminants (PCBs).

Larger trees also can be used to influence the flow of impacted groundwater so that contaminants do not move offsite—effectively they act as small pumps (think of all the Florida maleleucas used to drain wetlands, now designated as "noxious weeds"). Trees can help with the treatment process through the uptake and concentration of contaminants or the breakdown of contaminants in the bacteriologically-rich portions of the root system .

The economics can be interesting and one can only imagine what they are in the Japanese case and how they affect current land values. Those with an understanding of the actual risks involved and the ability to cost effectively clean properties have in certain instances done well:

"Acquisition, adaptive re-use, and disposal of a brownfield site requires advanced and specialized appraisal analysis techniques. For example, the highest and best use of the brownfield site may be affected by the contamination, both pre- and post-remediation. Additionally, the value should take into account residual stigma and potential for third-party liability. Normal appraisal techniques frequently fail, and appraisers must rely on more advanced techniques, such as contingent valuation, case studies, or statistical analyses.[11] Nonetheless, a University of Delaware study has suggested a 17.5:1 return on dollars invested on brownfield redevelopment.[12]"

Kevin Depew writes:

Why do you believe cynicism is on the rise? In my opinion, the < 35 generation doesn't really understand it or ignores it. I don't have access to it now, but I saw some large scale polling data on Friday that was remarkable in the cross section spreads between < 35 and those over, especially > 65. The gist, based on this polling data, is that if one is > 65, one is likely to find the country going to hell, the economy going to hell, that politicians are evil and stupid and that all bankers and finance people are crooks by a wide, wide margin over younger subset. If interested I'll forward data when I get back in office Monday. I was looking at it in the first place because there is a wide divergence between consumer comfort and confidence data vs market that is outside of 25 year norms and was just curious about the asymmetry in both economy and the polling data.

Victor Niederhoffer writes:

Artie wrote a book on cynicism in the police force that attributed cynicism as a variant of the authoritarian personality. He believed that police became cynical because they saw so much evil that their own persona looked relatively good compared to all the evil, and their cynicism and corruption was a natural outgrowth of the impossibilities of fulfilling all the requirements of an all too demanding job with conflicting goals. I believe we become cynical on the list because we see such ephemeral behavior by the public and funds, and such inside maneuvering by the cronies and flexions. It's hard to maintain a proper chivalrous attitude when confronted by these things day after day.

Jeff Watson adds:

But that cynicism, if allowed to fester, will have profound effects on one's trading. I've seen it happen too many times to people and they end up losing their edge.

Ken Drees writes:

Cynicism towards markets and politicians is healthy, but toward general mankind or society, probably not so well placed since hope and belief in goodness of the total gives one an overall positive tendency towards world view but also a well placed skepticism at certain segments.

The idea of erosion is interesting where the rigors of the job or the constant focus on conflicting outcomes that collide with the overarching worldview wear down the person's belief in good. One thought along these lines that I have is that by the end of one's life you are so distilled down in terms of your true character that its impossible to change. You are either that positive and generally nice old person, or a frown wearing old crank; the thoughtful scientist who never stops learning, or a worn out 24/7 TV watcher.

Russ Sears adds:

I believe it also has to do with the narrow vision we have of public versus personal life of the cynic. We do not see that like a partying narcotic addict, the soul has been sold for a very narrow gain. The personal life is full of turmoil and eventually rots the productivity out of the person. Think about the cynicism required of the steroid user or EPO user for example.

I believe that many companies demise starts when a new "C" position arrives within it- the Chief Cynic. If not confronted as Artie did, often this position is allowed to become an all consuming cultural force.

Vincent Andres adds:

"the cheaper money tends to drive out the dearer"

(the money of lower value drives out the money of higher value)

–Nicolas Oresme

(« la mauvaise monnaie chasse la bonne » )

Comments

10 Comments so far

Andre Wallin on June 27, 2011 8:26 am
am 27 and was a cynic to my own detriment greatly caused by studying philosophy and the market crash. how could anyone not be a cynic after what happened? if there wasn’t a time in one’s life when they were a cynic they haven’t lived nor do they know who they are.
jeff watson on June 27, 2011 10:03 am
Mr Wallin, you’re too young to be a cynic, and a market crash should bring optimism, not cynicism, pessimism, or permabear attitudes. Market crashes spell opportunity and the big money can be made by the canes. Anyways, one of the best books ever written is Dimson’s book, although long out of print, is a great read. http://tinyurl.com/3errxdd They have copies at Amazon, and I suggest you get a copy and digest it. Even though it’s ten years old and published before this bear market, it’s not out of date at all. In fact, the equities has been in a bull market for 200+ years with a few panics and glitches along the way. Look at the following chart from 1902-present and tell me if this looks bearish to you. http://stockcharts.com/freecharts/historical/djia1900.html I disagree with your last comment as being a cynic at one time is not a measure of self knowledge or joie de vie. There are many optimists at this dinner party from the Chair down to me. What isn’t there to be optimistic about? …..and this is coming from a guy who made Job’s test look like a Sunday picnic.
Gene on June 27, 2011 12:20 pm
Hmm. I have to wonder what your REAL motivation is for a writeup on cynicism.
Steve on June 27, 2011 3:08 pm
Great article.

“The cynic has many times when he is proven wrong”

I have seen this in a lot of areas of life just not in politics!
Russell Sears on June 28, 2011 11:38 am
Gene,
At least my conscience reason to write this was to two-fold.
First, as I am getting older well past my prime running years, I find myself getting tending to have more cynical thoughts about the fine young athletes which are doing amazing things. This I believe can spill into the rest of my life including my investments. So it is to guard against this in my personal life.
Second, on studying this I found that it helped me identify those that are becoming cynics and those con-men that are using cynicism to lure their prey. So it is to rid myself of these negative influences, by either ignoring them or by contradicting their biased arguments, once identified as cynicism.

In short all must guard against this bias because it does have an appeal.
Andre Wallin on June 28, 2011 11:46 am
Mr. Watson, have read that book at the library and also am not a perma bear. In fact I bought Wells Fargo at the bottom during February ‘09, early but still a good trade. I was a cynic on human beings, their motivations, and their focus on the current. Also, people’s love of worshiping idols and those idols profiting immensely. The market teaches you how weak the mind of human is and especially a year ago I see it everywhere, weaknesses are everywhere. But, it’s ok now as it doesn’t bother me as much as it used to. Transforming yourself into an independent speculator requires one to probably go through a period of cynicism of one’s past life, choices, and where is your edge on those around you.
jeff watson on June 28, 2011 7:49 pm
Mr. Wallin, You said, “Transforming yourself into an independent speculator requires one to probably go through a period of cynicism of one’s past life, choices, and where is your edge on those around you.” I would have to strongly disagree with that statement. I’ve been independent all my life, and have speculated for a living with varying degrees of success and failures all my life, and have never had a cynical thought in my life, ever. Another thing, the most successful local speculators in the pits have been largely without cynicism. The failures in the pits tended to be the most cynical, and that I say without reservation. I would be curious as to what the esteemed trading Doctor, Janice Dorn MD. PhD. would say about this subject.
Andre Wallin on June 29, 2011 7:31 pm
Either you spent a lot of time in academia getting ready or you worked for a firm who molded you . Soros didn’t have these and he saw a psychologist at some point in his life. This clean path to success that you speak of is your own hubris.
Biggle on July 1, 2011 7:42 am
just a suggestion: “A cynic is a man who, when he smells flowers, pulls out his Geiger counter.”
Trader Kevin (Penn State Clips) on July 1, 2011 10:41 am
Andre Wallin: “if there wasn’t a time in one’s life when they were a cynic they haven’t lived nor do they know who they are.”

Ridiculous. I have more than 20 years of life experience on you and while I view some groups (i.e., politicians and Wall Streeters) with a degree of cynicism, I have never been a cynic. And yes, I’ve lived plenty and have no doubts about who I am.

It’s impossible to be a cynical evangelical Christian when I see the work my church is doing to feed the homeless, build AIDS orphanages and schools in Kenya, encourage adoption over abortion, help ex-cons become productive members of society, etc.

Andre Wallin: “This clean path to success that you speak of is your own hubris.”

If this comment was addressed to Jeff Watson I can only conclude that you don’t have a firm grasp of the definition of “hubris.”

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