Admiration also causes or intensifies liking or love. With this “feedback mode” in place, the consequences are often extreme, sometimes even causing deliberate self-destruction to help what is loved.—CHARLIE MUNGER, HARVARD UNIVERSITY, 1995
People tend to ignore or deny the faults of people they love and also tend to distort facts to facilitate that love.
We are more influenced by people we like, and perhaps more importantly by people who genuinely like us.
There are obviously positive aspects to this tendency for society, but they rarely have a place in making business decisions.
You may like or even love your friend or relative, but that does not mean that you should trust him or her with your money. Loaning money to relatives is fraught with danger.
It is usually a far better idea to simply give away money to needy friends and relatives—or, if you do make a loan, to never expect it back. Relatives and friends in receipt of your money as a loan too often acquire a short-term and fuzzy/selective memory.
Another example of this tendency arises when people fall in love with a company and make business mistakes about that company as a result of that love.
One way that some companies leverage this tendency is to have their salespeople sell to people they know at parties. Tupperware parties are a classic example of this principle in action.
One valuable check on this liking/loving tendency is to seek out wise people who are not afraid to disagree with you.
I’ve picked up an interest in Charlie Munger’s work (Warren Buffet’s partner, you know him?) especially his genius mental models and I’ll be throwing many of them around. Don’t say I didn’t warn you.
Here’s one more quote from Charlie;
“A year in which you do not change your mind on some big idea that is important to you is a wasted year”.