URSABLOG: Buyer’s Remorse

Why is it that sometimes we do things which are not in our best interests? And even when our actions bring about the results that others have warned us to be afraid of, we double down and carry on doing them? There is a stubbornness in all of us that sets it face against reality, and so we carry on regardless, blaming others for our misfortunes, unwilling to do the easiest thing of all – to change our minds – especially if changing our mind will make us happy.

You can see it in children. “Don’t do that” you say, “you will end up hurting yourself.” And the child carries on doing it, and gets hurt, and cries. And you comfort the child, hoping that it will live and learn, until the next time the warning is ignored, and the inevitable crash comes again. The best-read and cultured people, with access to stories, examples, facts and arguments will continue to argue in the face of reality, happier to be isolated and wrong in their ever-decreasing comfort zone than to face the truth of what is only, surely, common sense.

Part of this, I suspect, is that we hate being proved wrong, and the person that hates it most is us. However shakily the foundations are for our course of action, it is difficult to change that course when we feel we have something to prove – even when nobody else really cares – and being proved right becomes more important than anything else. Too much emotion, strength and human capital is wasted when the course undertaken leads straight off a cliff.

Being resolute and determined is admirable of course. Margaret Thatcher – “the lady’s not for turning!” was seen as rallying cry for the Conservative Party in the early 1980s as she took on the challenges of governing, and the multiple confrontations she was facing in the years ahead. And indeed she was a formidable opponent, but it was arguably those same qualities that condemned her in the end, as her party turned on her, rather than to her, when she was seen as part of the problem, not the solution.

Those people who change their minds – I am fond of quoting John Maynard Keynes – are seen in retrospect  wise and far-seeing, but in the short term a change in direction is see as weak and vacillating – flip-flop, U-turn are the usual insults thrown in such a case – even when a U-turn is obviously needed when you find you are going in the wrong direction. But there is great danger in taking U-turns; they have to be executed cautiously and safely.

Caleb Ragland, American Soybean Association president and Kentucky soybean farmer, was this week reported by the American AG Network as being uneasy – to say the least – about the latest escalation of tariffs between the US and China, considering China remains US soy’s greatest export market:

“We run the risk of immediate impacts this growing season, along with the impacts a prolonged trade war with China will inflict on our industry once again. The short-term disruptions are painful, but the long-term repercussions to our reputation, our reliability as a supplier, and the stability of those trading relationships are hard to even put into words. We’re still reeling from TW1—Trade War One—and are certainly not thrilled about an extended TW2.”

Mr Ragland – it should be noted – is a three-time Trump voter. He carried on:

“We appreciate this pause – this opportunity for discussions that can bring resolution, but we ask the administration and China both to press pause with one another, as well, and pursue a Phase 2 trade agreement that will address U.S. trade concerns in a constructive way while preserving the markets we rely on.”

It is not reported whether Mr Ragland regretted his vote. I mention this because he could forgive himself for voting for Trump in 2016, because he didn’t know that TW1 would break out. But surely he knew – I knew, and I live in Athens, Greece not Kentucky, and neither am I the president of the American Soybean Association – what Trump was going to do when he got into office. Tariff is a beautiful word, after all.

But I can sympathise too. Voting, especially for big elections, carries a lot of weight with it in terms of loyalty, history, the quality of the opposition and community views. I remember speaking to friend of mine shortly after the Brexit vote.

“Well I thought ‘Remain’ would win, and in all honesty I wanted to stay in the EU, but I’d had a shitty day, and it was raining when I got off the train, and I was pissed off when I got to the Voting Station so I voted ‘Leave’ because I was cross and irritated, and I thought it wouldn’t count.”

I wonder how many other ‘Leave’ votes were made this way. At least my friend had the grace to admit his error – or maybe he was just saying that because he was talking to me, a committed Remainer – but whatever the case, he knew it was a stupid thing to do, even before he did it, but did it anyway.

I have no wish to add further to the commentary about Trade Wars and tariffs – there is nothing useful I can add, especially as things are changing every day – but this puzzling phenomenon about sticking to your guns even when you are running out of ammunition (and everybody else is shooting at you) is everywhere, including markets.

I cannot tell you how many times I have lost a deal because either a buyer or a seller has insisted on a price, and are unwilling to split the difference, even when the market is going against them. At this point the broker – me – feels it especially keenly because he or she thinks that they could have come up with some other argument, or pushed their client harder or generally done something differently. It must be said however, that the broker feels it most keenly in these situations because they are left without a deal, whilst the seller still has their ship, and the buyer still has their cash. Shipowners have the option to convince themselves that they were right in the long run, or forget about it completely once they enter into fresh negotiations.

The much under-rated author John le Carré talked about buying a fake painting in The Pigeon Tunnel: Stories from My Life. He bought what he believed was a valuable painting, only to later discover it was a fake. But instead of being outraged, he appreciated the artistry of the forgery and used the experience as a metaphor. For le Carré, the fake painting represented the blurred lines between truth and deception, something he was intimately familiar with from both his career in espionage and his writing. The story wasn’t just about being conned; it was about the nature of truth, the allure of illusion, and the way people often want to be deceived. He saw the incident as emblematic of espionage: full of beautiful lies and carefully crafted illusions.

The world of shipbroking – I would argue – is also full of beautiful lies and carefully crafted illusions, especially when no-one knows what will happen in the future. We are – to a greater or lesser extent – selling hope. Shipowners – sellers or buyers – have learnt to filter a lot of the more outrageous claims that shipbrokers make, but nonetheless there is an element of wanting to be deceived. Many brokers I know will be horrified about this assault on their integrity and honesty, but perhaps the more experienced, reflective and honest – at least with themselves – ones will recognise this. I know shipowners who bought a ship at the most spectacularly wrong time, but still believe it to be a good ship because the specifications or the quality of the maintenance. No amount of good quality – whether in machinery, construction or maintenance – will ever make up for the money that they lost as the market fell immediately afterwards, but nonetheless the purchase of their ‘fake painting’ has to be justified. The broker’s role in this case is not to willingly sell what they know is a fake painting but to carry out their client’s desires and instructions. They will surely do that to the best of their ability.

The root of our stubbornness – the child continuing to try in the face of all warnings to the contrary only to fall in pain and humiliation, the president of the American Soybean Association voting three times for Trump, and the buyer of a ship at the wrong time – is perhaps this desire to be deceived one way or the other. Maybe they want to prove others’ wrong, maybe they think that this time will be different, maybe their self-deceit – and false sense of themselves – pushes them to acquire things when they know it is unwise. But they go and do it anyway.

There are so many – justifying and justifiable – reasons that we can point to when we have made the wrong decisions. But just as the child can only learn to walk by falling down, so can we only make sense of the world by failing. That we continue to deceive ourselves along the way not only adds to the rich tapestry of life, it is many times the necessary catalyst for action in the first place. And without action – whatever its motivation – we are nothing.

Simon Ward