At its core, gaslighting is a form of psychological manipulation where a person or entity seeks to make someone doubt their perception, memory, or judgment. In the investment world, this might manifest as companies or advisors trying to manipulate data, narratives, or opinions to present a more favorable image than what might be the case.
Signs of Investment Gaslighting:
- Dismissal of Concerns: If a company or an advisor frequently dismisses or downplays your concerns without proper justification, it might be a sign of gaslighting.
- Over-reliance on Jargon: Overcomplicating information to create an aura of expertise and make it harder for the average investor to understand or question can be a tactic.
- Selective Information Sharing: Only sharing positive information and withholding or downplaying negative information.
- Shifting Goalposts: Consistently changing metrics or benchmarks to paint a better picture.
- Overpromising and Underdelivering: A track record of making big promises and then not delivering or frequently deferring the timeline.
Steps to Protect Yourself:
- Diversify Sources of Information: Don't rely on a single source, especially if that source is directly tied to the investment.
- Educate Yourself: While you don't need to be an expert in every field you invest in, having a basic understanding can make it harder for someone to gaslight you.
- Question Anomalies: If something doesn't seem right, ask about it. If the answer isn't satisfactory, dig deeper.
- Seek External Expert Opinion: Especially when considering larger investments, it might be wise to consult with an industry expert or an unbiased third party.
- Avoid Emotional Investment: Stay rational and avoid being too emotionally attached to any particular investment or narrative.
- Network with Other Investors: Sharing insights and concerns with fellow investors can provide valuable perspectives and act as a check against potential manipulation.
Real-life Examples:
While the case of Elizabeth Holmes and Theranos is well-documented, the case of Sam Bankman-Fried and FTX is still unfolding.