What do Iranian secret police, information flow, and investment decisions have in common?
Dopamine.
One of the most sophisticated and, at the same time, cruelest sensory deprivation techniques is White room torture. It is widely used by the Iranian secret police.
The prisoner is placed in a perfectly soundproof room, where everything is white. There are no windows, books, or TV - just smooth white walls, a white bed, and white pottery. Intense white light is maintained in the room 24/7. The food is no exception - prisoners are fed only white rice. Even the guards walk with special shoes that do not make any noise.
At first glance, it sounds like an eccentric but pointless torture technique. However, it works flawlessly. The reason is that dopamine levels reach critically low values by placing a person in an environment without visual or audible stimuli.
When everything around us is blindingly white and deafeningly quiet, we don't get the stimuli to trigger dopamine release. Happiness, motivation, and memory are directly linked to dopamine levels in our bodies. Complete sensory deprivation suppresses the dopamine below the healthy threshold.
At this point, our consciousness begins to fragment. Simply put, we start to go crazy. Our memory becomes erratic. The motivation to exist dissipates. We are desperate for external stimuli to boost our dopamine, so we are willing to do anything. Even physical torture during interrogation transforms into a desirable experience.
The ruthless efficiency of white room torture lies in precisely this - it deprives our mind of external triggers, resulting in slow but inevitable mind fragmentation.
Without enough stimuli to maintain adequate dopamine levels, we would go mad. However, the opposite is also true. Overexposure to dopamine turns us into reactive consumers. The information we absorb defines our thoughts, our thoughts define our decisions, our decisions determine our actions, and our actions predetermine our performance.
Eventually, we wonder why we get the same results after devouring the same low-quality information—or rather, why we don't get what we want.
The dopamine economy
We live in the eternal now, inundated by a colossal amount of information noise. We are increasingly trained to regard this noise as a signal and to seek it out at all costs. We transform into dopamine slaves.
The attention economy can be called the dopamine economy. The following graph illustrates its development.
The three columns illustrate traditional, modern, and dopamine cultures.
Traditional culture equals active entertainment. We love football, then play; we adore piano, then practice; we enjoy painting, then paint. What all three have in common is our conscience engagement.
In the middle column is entertainment—movies, music, and sports. These no longer require active participation but still demand our time and attention. The duration of a music album or movie is often over an hour. We have to stay focused for at least 60 minutes.
Although passive, even one hour is too long these days. We are desperate for dopamine shocks every few minutes. A case in point is the short videos. They are our trusted dealer of ephemeral happiness, available at scroll distance. From consumers of entertainment, we become consumers of distraction.
How does this tie into investment?
A growing number of market participants fall to the far right of the table. They treat information as something in between entertainment and distraction. However, this comes with a steep price tag.
Investments and dopamine
If we add another row at the bottom for financial media, the three columns (from left to right) will look like these: specialized books → blog posts → short videos.
The return on information, i.e., its utility, decreases the further right we go. ROI is the highest for specialized literature, average for blog posts, and (almost) non-existent for video content. At the same time, the majority concentrates just on the videos. Thus, most investors and traders watch the same videos, hoping to achieve different results.
If everyone in a room eats burgers and cakes, they will inevitably achieve a similar outcome—obesity. The same goes for our information diet. Our achievements will be indistinguishable from the majority.
When everyone thinks alike, no one thinks enough. As market participants, one of our main tasks is to filter our information sources. Only in that way can we develop critical thinking.
The guiding criterion is not the dopamine high. It is the quality of the information and its source. Information quality means informational, predictive, and operational value.
It is decisively simple but challenging to accomplish. A foolproof trick is to inverse the process: first, weed, then seed. The Pareto rule is an excellent starting point—a massive portion of the value comes from a single-digit percentage of information sources. Let's not forget that an essential prerequisite for consuming quality information is first to stop consuming low-quality one.
If we follow ten media outlets, at least 8 bring only noise and no signal. Their creators aim at one thing - to make their content a (bad) habit for us. We stick to media X because of the reward, a short-lived dopamine rush. And so, we spin on a merry-go-round, thinking that the more information, the better.
The more hooked we are, the weaker our ability to think independently. If we outsource our thought process, the results will follow sooner rather than later, and we won't like it.
Investment books are not spared from mediocrity, either. Most published in the last twenty years should have been blog posts. They can be summed up in a few paragraphs.
In summary, we have no business on the far right of the graph. Once we stop cramming ourselves with low-cost information, the less complicated part follows - finding reliable sources.
It's our job to detect and remove distractions. This is the first step in our healthy diet. It is the only way to allow quality information to work for us. Only under these conditions does our critical thinking flourish.
Information diet for investors and beyond
Nothing in life is black and white. The same applies to human physiology. Dopamine is necessary for our everyday functioning as individuals. As with food, we must choose our sources of dopamine carefully. A balanced information diet keeps our mental health in check without becoming dopamine junkies.
The quality of our investment decisions is directly proportional to the quality of information we absorb. Three of the simplest yet proven ways to generate dopamine are:
>Reading books (in the old-fashioned way)
>Dissecting your thought (writing comes to mind)
>Exploring the world (the tangible one)
Reading books is the best legal substance for mind expansion. Choose your stimulants carefully. Reading is a proven method of cultivating independent thinking. I strive to read books that provoke curiosity. Each book is like a portal: Reading one leads to reading the other three.
Writing organizes our chaotic thoughts. Thinking is a horizontal process, while writing is vertical. Every moment, a series of disorganized thoughts wander through our heads, too often having nothing to do with each other. When we express our thoughts in writing, suddenly, chaos gives way to order.
Stepping away from the digital noise, we begin to hear silence. In silence, the answers to those questions we seek are found, so the unsolvable problems become solvable.
Dopamine is a good servant but an awful master. We choose our role, to command or to obey.
As with nutrition, so with dopamine, it is not only the quantity that matters but also the quality. An informational diet is a must if we are to think differently and achieve distinct outcomes from the majority.
The secret is that there is no secret. Our task is to cut the noise and keep the signal. Fortunately, the tools have been with us for centuries: mind-expanding books, handwriting sessions, and real-life adventures.
very well written, thanks you
A great article!