In the 1990s, South Korean airlines had the worst safety record in the world. In fact, the odds of being killed or maimed on Korean flights was so high, U.S. government agencies banned staffers from flying in the country’s airlines.
On the surface, it didn’t make sense. Korea is a nice place. It’s far beyond up-and-coming. Seoul is a megacity with every luxury you can imagine.
Plus, Korean airlines flew western planes. The Boeing and Airbus jets were exactly like those flown by western carriers.
On top of that, Koreans are plenty smart. Put them up against any other culture…they compete. That’s why the incredible fatality rate made no sense.
For instance, Korean Air cargo flight #8509. The Boeing 747 was the same model of plane used by U.S. presidents. The newer 747-8 model costs ~$400 million today.
Back in December 1999, flight #8509 took off from a London runway late one night. Once in the air, the pilot banked left following the pre-planned flight path. For some reason, he kept banking left. Like holding a car steering wheel in the left position after a turn, the plane continued left until it dove into a nearby forest. The crash destroyed the plane, and its cargo. It also killed the crew.
This wasn’t a terror incident. It also wasn’t suicide. Kamikaze, hara-kiri, and the like, are a part of Japanese cultural history, not Korean. There was no sensible explanation.
Two years earlier, something similar happened with Korean Air flight #801. Only this time the plane carried passengers, not cargo. The 747 descended three miles southwest of the airport on the tiny island of Guam. The captain, an experienced commercial pilot with military training, attempted an instrument landing. The cockpit crew followed his lead.
The flight recorder showed a telling mistake. Five seconds before impact, the first officer politely suggested a “missed approach.” This means pull up, circle, and start over.
One second before the crash, the engineer said, “go around.” It was too late. The jumbo broke into several pieces. Only 28 people lived.
Time and time again, the crashes made no sense. All the way back to the 1980s when Koran Air flight #007 inexplicably flew over restricted Soviet airspace. The Soviets shot the plane down.
These were all preventable errors. Western investigators ruled out every possible explanation. Equipment, weather, sabotage, and even suicide. None were to blame. Things didn’t add up. Until they figured out the true cause…pride.
Offended by Facts
Finally, western experts discovered the unlikely explanation. The cockpit culture of Korean aviation had to change.
Like the conversation recorded seconds before flight #801 crashed in Guam, there was a structural problem in the cockpit. The first officer and flight engineer politely suggested a fresh approach. Their view of instruments told them the plane was about to land on the side of a mountain, 3 miles from the runway. In an American cockpit, there would have been swearing, shouting, and maybe fists thrown later.
The issue is, Korean culture forbids disrespectful dialog with a senior officer. Back then, the cockpit of a passenger jet was no exception.
Suggesting he’s 3 miles short of the runway might offend the captain. Once he has his mind made up, that’s that. There’s no room for new information, unless he sees the error himself.
A junior officer pointing this out might dishonor the captain, and in turn relegate the junior to some unwanted future. Nobody seemed to think through the wishes of the 229 people who died as a result.
Western pilots put a stop to this. They explained this type of information, where hundreds of lives hung in the balance, was not offensive. “Sir, engine 3 is on fire” is not an insult… in fact, it’s the opposite.
Being Right Can Bankrupt You
This type of thing happens all the time with money. People don’t die, but hard-earned savings does.
Investors get fixated on an idea. They just know they’re right. They ignore any fact suggesting otherwise. When the trade goes against them, they double down. Sending good money after bad…they focus more.
Soon they argue with friends and family who question them. It becomes ideological. They seek out media that validates their idea. They criticize contrary opinions. It becomes personal, a battle of wills, them versus the world. The truth is, it’s them versus the facts.
But investing doesn’t work this way. It’s not a battle of wills. It’s a battle of who has the most open mind.
Of course, it takes time for ideas to work. Things don’t happen in an instant. Success favors the patient investor. But patient and intractable are polar extremes.
Maybe the saying should go, success favors the patience and open-minded investor.
Investing success is a long-term game. I don’t know many people who stumble into a fortune and handle it well. There are shows about lottery winners who struggle with this. The money comes faster than the wisdom needed to keep it.
It’s not easy for the new investor to keep an open mind. New information triggers a fear of failure, or being wrong. They need validation from peers, and being wrong might get the opposite. They lose site of the process.
The trick is, be willing to change your mind when the facts change. We did this last issue with our recommendation, and we’ll discuss your reaction in the next section.
Not one of us is naturally open minded. Successful people try to be, and that’s often enough to outpace peers.
To notice the facts changing, stop taking yourself too seriously. Listen more than you talk. Seek out smart, younger people who are opinionated, and lack wisdom that naturally comes later in life. They are information geysers.
The problem with experience is you lose your fearless edge. You become risk-averse, or at least more risk-aware.
There’s no formula for keeping an open mind. Some people call it a flow state. Anyone who tells you they have it mastered is over confident.
Best case scenario, you can limit the damage by doing a few things. I’ll share one them with you. But remember, the knowledge is one thing, using it is another.
The Dogma Test
Dogma means you believe so strongly, you can’t take in any contrary information. It’s a dangerous condition. You could even put a jumbo jet down in the woods when the instruments in front of you warn against it.
While some people call this conviction, it tends to end in losses when it comes to money.
There’s a test for dogma. It works better on others than when self-administered.
If the answer to this question is “no,” you’ve got a real problem.
Tread lightly if you ask someone this. People caught in the grip of dogma don’t let go easily. It’s like getting between two fighting dogs. People defend dogma until they’re out of options.
Remember, we don’t want to be right, we want to be successful.
Our Latest Recommendation
We did something last issue that surprised a lot of people. I think it was the right move, the facts seem to support it. We’ll see if we’re right in time.
Keep reading with a 7-day free trial
Subscribe to The Tucker Letter to keep reading this post and get 7 days of free access to the full post archives.