Perception and Reality – an opinion piece by Alexander Ineichen

Alexander Ineichen- Founder

Ineichen Research and Management AG



Alexander Ineichen provides research services to Sovereign Wealth Partners.

We include this article to illustrate some of the difficulties in translating incoming news flow into sensible and defensible portfolio responses.


In “Scared to Death,”* the authors coin the term “nyktomorophic effect”. It applies to almost all scares, global warming, coronavirus, etc. Remember, many people fear air travel (c. 626 deaths per year***) but not driving a car (c. 1.2 million deaths per year). Or SARS (overall 774 deaths) but not the common flu (c. 56,000 deaths per year.)


  • The nyktomorphic effect is a trick of perception.
  • Because initially not enough is known about the true nature of a supposed threat, due to its complexity and unfamiliarity, it plays on people’s fears, becoming inflated out of all proportion. Only as more information becomes available does it become possible to assess risk realistically.
  • For a full-fledged scare to take off, it requires the participation of particular group of “pushers”. These can include scientists, media, lobby groups, politicians, officials, campaigners, almost-US-presidents, and, in modern times,
  • The scientists are the most important pushers. A scare requires plausibility. That’s where the scientists and experts come in.
  • Scientists and experts are fooled in three First, correlation is confused with causality. Second, those persuaded by the apparent causality develop an obsessive interest in pursuing it that they become biased, leading them to overlook any evidence that might contradict it. Third, the promoting scientists become so carried away by the rightness of their cause that they are prepared actively to suppress any evidence which contradicts it. They become “activists”. The role of the IPCC (UN’s Intergovernmental Panel on Climate Change) in global warming is an almost perfect example of these three steps.
  • Once stage three is reached, one can observe how the science behind it is being further manipulated by its “politicization”. So great is now the momentum of the scare that, in the academic, corporate and official bureaucracies it has become the established orthodoxy. The WEF in Davos this year is a case in point with nearly everyone paying lip service to the scare de jour. Prince Charles of the UK even bowed to Greta Thunberg.
  • Money ie., research funding, has the role of amplifying the effect. Funding is controlled by government. University departments and big business all want part of it; changing their behaviour accordingly. Elon Musk and his Tesla plant outside of Berlin is a case in point.
  • Once governmental grants are involved, many groups depend on further funding just to survive. They become cheerleaders of the scare, keeping media and teenagers entertained. The cheerleaders have an interest in sustaining the scare as long as possible. It is no coincidence that the same people and groups who scared us with population bomb, immediate ice age, New York becoming the next Atlantis, nuclear war, nuclear power, nuclear waste, etc. are now in the climate scare business.


*Booker, Christopher, and Richard North (2007) “Scared to Death – From BSE to Global Warming-How Scares Are Costing Us the Earth,” London: Continuum, p. 455. **Ibid., p. 333. ***Average past 20 years.


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