How to Use The Concept of Invisible Histories to Fight Regret

by | Aug 13, 2020

I heard a story once of a guy who in a meeting referred to his $250,000 motorcycle and when someone commented “wow, that is super expensive, what kind is it” he responded, “it’s just a normal motorcycle that cost me $10,000 — $250,000 is what the Microsoft stock I sold to buy the bike would be worth today.” Ouch.

We can be plagued by remorse due to actions we took that didn’t work out, and also by actions we didn’t take that in retrospect we should have taken. These are known as errors of commission and errors of omission. Sometimes these regrets over our actions, or our failure to act, can eat us up inside. We ruminate and wish we had done something different. What can we do to limit our feelings of regret?

A Story About Selling Out of the Market At the Wrong Time

One powerful mental model we can use to help us find peace with our decisions is the concept of invisible histories. I’ll illustrate it with a true story of two friends, one of which I’ll call Beau and the other I’ll call Peep.

Beau and Peep each had investment portfolios of mostly stocks back in 2008 when the Great Financial Crisis hit. In the midst of the crisis, near the market bottom, they each were very worried about the health of the global financial system and concerned that the stock market was going to fall significantly more. They had hit the limits of their risk tolerance. So, they each sold a chunk of their respective portfolio of stocks at a big loss to have the cash to ride out the volatility.

What happened? The market recovered and by the time Beau and Peep each re-invested their cash in the stock market they had missed out on a lot of gains. So, Beau and Peep took the same actions and were in the same boat. But they looked back on their decision to sell out of the market very differently.

Beau looked back on his decision with regret. Whenever he thought about the gains he missed out on it made him physically ill. Every time he looked at his portfolio he saw the ghost of the additional money he’d have if he hadn’t sold those stocks. His decision haunted him.

Peep took a different view. She realized that she made the best decision she could at the time with the information she had. Importantly, Peep realized that things could have turned out differently than they did. The financial crisis could have deepened. The economy could have tipped into a depression and the stock market could have declined a lot more than it did. In other words, Peep recognized at the time she decided to sell stocks that there were many possible future outcomes but only one happened. She thinks of these alternate histories that could have happened but didn’t as “invisible histories.” In fact, Peep says that if she had to do it over again she would have made the same decision.

This concept of recognizing that there are invisible histories is important. At each point in time we make decisions the future is not set. We can’t see around the corner of time.

Invisible Histories Diagrams

When we look back at the past with the benefit of hindsight, here’s what events look like:

(I made these diagrams myself)

When you are sitting at event/time “D”, the past looks linear and causation is obvious. It seems as if “A” caused “B” which led to “C” and resulted in “D”. We all tend to look back and kick ourselves that when we were at point “A” that we didn’t realize that it would lead to “D”.

The above clean link of “A” to “B” to “C” to “D” only exists in retrospect.

In reality, when we are sitting at point “A” we don’t really know what will happen. What we don’t realize is that there is a multitude of “Bs” “Cs” and “Ds” when we are sitting at point “A”. Here’s what reality looks like this from point “A”:


At point “A” you don’t know which “B” will occur and you definitely don’t know which “C” or “D”.

If you could see all the invisible histories, once you are at “D” and look back, it really looks like this (the green arrows are the true path):


If you take out all the noise, here’s what it really looks like in hindsight:


How to Use Invisible Histories to Fight Regret

How to use the invisible histories mental model?

First, when you make a decision realize that there are many unknown future possibilities; the future is uncertain. There is an infinite number of possibilities that collapse into the one reality we experience.

Second, when evaluating a past decision know that things could have turned out different. You did the best you could with the information you had. Only one actual history happened, but there is a multitude of invisible histories that could have happened and in some of those possible outcomes your decision would have been a good one.


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Subscribe To The IFOD

Get the Interesting Fact of the Day delivered twice a week. Plus, sign up today and get Chapter 2 of John's book The Uncertainty Solution to not only Think Better, but Live Better. Don't miss a single post!

You have Successfully Subscribed!

Share This