Decisions and Outcomes

Good decisions, Good Outcomes -sometimes

Decisions affect the trajectories of our life. Consciously or unconsciously, we make choices every day from what to eat to what we read and what, who we hang around. This, in little accumulating ways, change our lives. 

When we make a decision, we judge the decision by the outcome. A good decision should produce a desirable/ positive result. A bad decision should provide a negative result.

Sometimes, it works out that way. Good decision, good outcome, but sometimes it doesn’t. 

Sometimes we make good decisions and end up with bad outcomes. Or bad decisions and the result is good.

Outcomes depend on a lot of factors, and those factors are usually out of our control. What’s important is our process to arrive at the decisions we are making. Here is an example of a conversation between a manager and his employer.

Employer: It looks like we made a poor decision

Manager: No. We made a good decision. The outcome was poor.

Manager: There were many unknowns, and we decided based on what we knew.

Manager: Never judge a decision by its outcome.

In the investing world, events you have control over happens and a good decision gives a bad outcome. While the decision isn’t wrong, the result, however, goes sideways.

On the flip side, decisions that aren’t right(based on emotions) would turn and produce a good outcome.

In both cases, the result has almost nothing to do with the correctness of the decision. It might just be luck.

However, to be sure an outcome isn’t luck, you have to ask if it is sustainable.

Actions/Investments based on bad decisions aren’t sustainable even when the previous outcome has been good. Investment or action based on good decisions would eventually produce a good result.

James Clear explains in his book, Atomic Habits.

“Your outcomes are a lagging measure of your habits. Your net worth is a lagging measure of your financial habits. Your weight is a lagging measure of your eating habits. Your knowledge is a lagging measure of your learning habits. Your clutter is a lagging measure of your cleaning habits. You get what you repeat.”

A piece of advice when you make good decisions and get bad outcomes is to view the outcome as a good thing or at least something necessary. It is necessary to overcome the valley of disappointment before you can experience exponential results.

In the words of  Friedrich Nietzsche, a German philosopher

"My formula for greatness in a human being is Amor fati: that one wants nothing to be different, not forward, not backward, not in all eternity. Not merely bear what is necessary, still less conceal it—all idealism is mendacity in the face of what is necessary—but love it."

Keep taking the right actions, making the right decisions, building the right habits, and the result would follow.

And that wraps it up for this week. See you next Sunday.