Hey Lykkers! Have you ever looked at a smooth, upward-curving growth chart and felt a little spark of excitement? That feeling—that sense of potential and promise—isn't accidental. In fact, it's deeply wired into how our brains work.

We're naturally drawn to patterns, optimism, and clear narratives—which is exactly what those elegant financial projections offer.

But here's the catch: our brains can also be tricked. That compelling chart might be telling only part of the story. Let's explore why we're so quick to believe growth projections and how we can become smarter interpreters of the financial stories they tell.

We're Wired for Stories, Not Spreadsheets

Human beings love stories. We always have. A growth chart isn't just lines and numbers—it's a visual story of success, progress, and future potential.

Our brains are naturally drawn to clear, simple narratives, especially ones that suggest positive outcomes. A chart pointing confidently upward taps into our innate optimism bias—the tendency to believe that things will turn out well for us, even when odds are uncertain.

This is why two companies with similar data can present wildly different projections. The one that tells a better story—supported by a clean, rising graph—often wins over investors, customers, and even employees.

The Allure of the Smooth Curve

Take a close look at most financial projections. Notice how smooth the line is? Real growth is almost never that clean. It's filled with dips, plateaus, and unexpected turns. But we find smooth lines reassuring. They suggest control, predictability, and expertise.

This is called the narrative fallacy—our tendency to prefer clean, straightforward stories over messy, complicated realities. We'd rather believe in a clear path to success than acknowledge the uncertainty and randomness that actually shape most outcomes.

"Investors often fall prey to cognitive biases that make them overconfident in projections and underestimate the role of randomness in financial outcomes."— Richard Thaler, Nobel Laureate in Behavioral Economics, 2017.

Seeing What We Want to See

Have you ever noticed how two people can look at the same chart and draw completely different conclusions? That's confirmation bias at work. We unconsciously interpret information in ways that support what we already want to believe.

If we're hopeful about a company or trend, we'll focus on the best-case scenario line on the chart. If we're skeptical, we'll zero in on all the reasons the projection might be wrong. The chart itself hasn't changed—but our filters have.

The Authority Aura

When a chart comes from a respected analyst, a fancy firm, or uses complex-looking models, we're more likely to trust it. This is the authority bias. We assume that because someone is an expert—or because a chart looks technical—it must be accurate. But even experts have blind spots, assumptions, and incentives that can shape their projections.

How to Stay Grounded When Reading Charts

So how can we benefit from projections without being misled? Here are a few tips:

- Look for the assumptions. Every projection is built on a set of assumptions. Ask what they are and how realistic they seem.

- Embrace uncertainty. Seek out projections that show a range of outcomes—best case, worst case, and most likely—not just one glowing line.

- Check the track record. Has this person or organization made accurate projections in the past?

- Remember context. A projection is a possibility, not a promise. It's a tool for planning, not a crystal ball.

The Takeaway

Growth projections are powerful tools—not because they predict the future, but because they help us imagine and plan for it. By understanding how our brains respond to these charts, we can appreciate their insights without being seduced by their simplicity.