I listened to someone explain poll-based decision-making. When faced with a difficult decision, you reach out to people in your network and ask which choice they think is correct. Then you do whatever the majority “vote” for. For example, you ask one hundred people if it’s a good idea to put all your money into a single stock someone told you about. If ninety-nine people say yes and one person named Warren Buffett says no, this person would make the investment.
This thought process has several flaws. I’ll discuss two:
- Credibility – It’s good to ask for others’ perspectives. But it’s important to ask credible people, meaning people who have experience or a track record of success in the area. People who have no experience or success in the area aren’t credible, and their perspectives should be discounted or, in extreme cases, ignored.
- Independent thinking – It’s important to take the time to figure things out yourself and reach your own decisions. Letting other people do the thinking for you—following the crowd—can be dangerous. You can factor in the perspectives of others to make sure you’re not missing something, but you don’t know how they made their decisions. If you rely on them, you could be exposed to serious errors. Frauds like Ponzi schemes grow because new investors take comfort from and rely on the fact that other people decided to invest. People who evaluate opportunities independently are more likely to see things that are too good to be true for what they are.
I’m all for getting perspectives from others before making decisions, but I’m not a fan of poll decision-making.