In my last post I wrote about how Hedge Fund managers base their choices on “stories” they weave with the information they gather.

If you believe in rationality and evidence based thinking, the thought that these men responsible for such obscene amounts of money could be no better than grotesquely overpaid fiction writers, can be deeply disconcerting.
On one hand you can certainly understand the difficulty of the situation they face. They are confronted with an overflow of data, they cannot effectively analyze. But does this mean constructing a story is the way to go? How can stories, the stuff of movies, myths and entertainment, ever become the basis of consequential decision making?

The answer – because that is just how we are wired to process information.

Consider the following quote from Antonio Damasio’s book on the biology of consciousness The Feeling of What Happens.

Telling stories, in the sense of registering what happens in the form of brain maps, is probably a brain obsession and probably begins relatively early both in terms of evolution and in terms of the complexity of the neural structures required to create narratives. Telling stories precedes language, since it is, in fact a condition for language…

The brain inherently represents the structures and states of the organism, and in the course of regulating the organism as it is mandated to do, the brain naturally weaves wordless stories about what happens to an organism immersed in an environment.

The Feeling of What Happens, page 189 (paperback)

In other words, stories are an emergent property of the neural structures of our brains. There is no getting away from them. Narratives, in the form of who, what, when, where is the natural way in which we are wired to think.