I was in Global Health Convention for 4 days and it was followed by Australian Medical Student’s Association Convention and it is now on its 4th day. About a week of convention and one of the themes that keeps recurring is perception.
From Wikipedia, perception comes from the latin word percipio and it is the process of attaining awareness or understanding of the environment by organizing and interpreting sensory information. So from that definition alone, a same piece of information is probably perceived very differently by two different people because it is based on our own interpretation.
There was a talk given by Dr. Brian Davey, a deputy team leader working for the United Nations Special Comission biological monitoring inspections in Iraq, about chemical weapons. He stressed that chemical and biological weapons not only cause terrible physical harm to humans but also horrific psychological harm. He told us a few stories of terrorists using smoke grenades with no actual toxins being enough to scare an entire army and make them seek medical attention. Effectively removing them from the battle fields and wasting medical resources. An incident with anthrax in Japan caused 12 deaths but more than 5000 people seeked medical attention with the fear of being exposed. Imagine the stresses these perceived exposure to chemical weapons caused these people.
Some of you might have heard of Dr Charlie Teo, renowned neurosurgeon, he talked about one of his encounter with a patient. He had a quadriplegic patient who had a tumour in her spinal cord. Like all good doctors, he counselled and gave all relevant information to the patient in order to obtain informed consent. Like other neurosurgeons this lady saw before she came to Dr Teo for help, he implied that surgery would only buy her a little time and that being fully paralyzed from the neck downwards, quality of life wouldn’t be as good. He worded it better but that was the essence of his message to her. She got very offended and told him that he had no right to judge what quality of life is to her. She then went on to say that to her, being able to impart wisdom to her 2 teenage granddaughters is good quality of life. She didn’t need to be able to walk to be happy. So Dr Teo did the operation and he said a few years later, he saw her once again with her 2 granddaughters now no longer teenagers.
That to me was an excellent story on how we make assumptions based on our own perceptions. It is true that most of us regard ambulatory function as a major part of quality of life but we forget that being able to ambulate is not synonymous to good quality of life.
There was also a talk on the placebo effect. There was an experiment where 2 groups of patients were given the exact same sugar pill. One group was told that they were given standard top of the line pain killers and the other group was told that they were given almost out of date, ready to be thrown out pain killers. And the group with a perceived higher quality pain killer obtained better pain management. Remember that both are given sugar pills. A group of athletes that were told that they were given steroids when in actual fact they were given placebo pills ran faster than when they were not given any pills at all.
Now the opposite of placebo effect is the nocebo effect. For example, if you put a little probe on someone’s finger and gave them a little shock. Then you tell them that you are going to up the voltage and this time it is going to hurt. You give them the second shock with the exact same voltage and pretty much all of them will jump up and scream in pain. Once again, same voltage but very different perception to the shock.
I guess what I am getting at is that the markets are full of different perceptions. Some might even say that a price of a share is the net result of all human perception on that share’s future performance. A same news article can be read by 2 different people and be interpreted totally differently.
A company does not have to do badly to underperform. All that is needed is a group of people who thinks it is going to do badly.
It is hard but probably wise for us to consider more than one way to interpret information we receive. It is also probably wise for us to think about different perceptions to a same piece of evidence. It is up to us to identify nocebo effects and take advantage of the overreaction to negative news. If over selling occurs we can think about buying.
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Next post on Sunday!