Lesson 13: Your expectations will usually come true.

Author's note: I am a compulsive advice-giver-always have been.  When my own son was in high school, he wasn't interested in his old man's advice so I wrote it down in the hope that he might change his mind one day.  What follows is one piece of that advice.  I trust it applies to all of us, regardless of age.

You have to expect things of yourself before you can do them.

—Michael Jordan

It’s called the Pygmalion Effect—also known as the self-fulfilling prophecy—and it’s real. If we expect a positive outcome, we’ll probably get it. If we expect a negative outcome, it’s likely to happen.

A lot of research has been done on school children in this area. Robert Rosenthal and Lenoir Jacobson performed studies at elementary schools where teachers were given the names of a select group of high-achieving students. The teachers were told that because these kids were so intelligent, they would probably excel over their lower-performing classmates.

Sure enough, those smart kids performed like smart kids. They got good grades, and they generally showed significant improvement on end-of-the-year tests. There was only one catch: the “smart” kids weren’t really any smarter than the others. In fact, they had been chosen completely at random.

The real difference had been the expectations of the teachers—and as a result, their treatment of the students. Later studies have confirmed this effect in adults as well.

Your expectations become your own self-fulfilling prophecy. This applies to events both big and small. The reason is simple: if you really believe that you will do a great job, your subconscious mind will guide your behavior to be consistent with that belief, and you will indeed be an outstanding employee, student, or whatever.

If, on the other hand, you view yourself as not being good at something, you’ll have no motivation to improve. What would be the point? You know you can’t do it, so why waste your time trying to get better?

Do you see where this is going? Just knowing about the self-fulfilling prophecy can be a tremendous help to you in your life. Remember: you have complete control over your own thinking. It naturally follows that you have control over your own expectations.

So what’s it going to be? You can expect misfortune—and almost certainly bring it on—or you can expect great things from yourself. Just remember that you have no one but yourself to blame for your own expectations.

Lesson 7: Have a set of values and live by them.

Author's note: I am a compulsive advice-giver-always have been.  When my own son was in high school, he wasn't interested in his old man's advice so I wrote it down in the hope that he might change his mind one day.  What follows is one piece of that advice.  I trust it applies to all of us, regardless of age.

Beliefs constitute the basic stratum, that which lies deepest, in the architecture of our life. By them we live, and by the same token we rarely think of them.

—José Ortega y Gasset

Your values serve as your internal compass. They guide your actions. When you find yourself in a situation where you’re unsure of what to do, your personal belief system will tell you what is right to guide your actions.

This compass will be vitally important in countless situations throughout your life, especially when you find yourself under pressure. If you have a hard-wired set of values, you’ll be more likely to act in a way that you’ll be proud of afterwards.

In order to reap those benefits later, however, you have to take some time now to define for yourself what your values are.

You already have a set of values; you just need to clarify them in your own mind. Your values have been influenced over the years by your parents, teachers, mentors, role models, and friends. But while others have a hand in the process, your values must be your own—nobody else’s.

Fred “Mr. Rogers” Rogers once wrote, “I doubt that we can ever successfully impose values or attitudes or behaviors on children—certainly not by threat, guilt, or punishment.” That also holds true for adults, but it has never stopped people from trying—just human nature, I guess.

So the challenge for you is to separate the beliefs that belong to others from those that are really your own. Use your best judgment and try to sort through your own biases. Just as it doesn’t make sense to simply accept your parents’ values without testing them for yourself, it also doesn’t make sense to blindly reject those values out of youthful rebelliousness or a desire for independence.

If you believe something to be true, then it doesn’t matter where you first heard it. If it’s true, it’s true. Just make sure you can reconcile that truth in your own mind.

Understand also that your values and beliefs are likely to evolve over the years. But once you are clear about what you believe, you will find that the answers to tough questions will come much more easily.

Attitude and Change

1 - The local chapter of the American Association of University Women (AAUW) is meeting in the Depot Room this afternoon, and I am privileged to be giving the talk. The topic is New Realities in the Global Economy, and we will focus largely on emerging markets. This is not my first time speaking to the AAUW; they are always an engaging and challenging audience. They keep the speaker on his or her toes, and that is a good thing!

2 - The President followed up his recent budget proposal with a new proposal to change corporate tax rates. It has some very interesting aspects to it, which you can read in the article below. It's not likely to get much traction in an election year, and that's a shame. Is it just me, or does it seem to you that our leaders in Washington ought to be able to talk things over -- even if they disagree -- and work toward a common goal that everyone shares?

3 - It is a common belief that "attitude is everything." It's the theme running throughout my book The Graduate's Book of Practical Wisdom (sorry for the shameless plug), and I believe it applies even to investing. If you'd like to see what that means, click on this week's video below.

Have a rock-em sock-em week!

-Andy