Akira Kurosawa’s 1950 classic Rashomon was based on 2 stories by Ryunosuke Akutagawa.

The movie starts with 3 characters, a priest, a woodcutter and a commoner seeking shelter from a rainstorm.

As they wait the discuss a recent crime where the wife of a samurai was raped, husband killed by either suicide or murder and a thief arrested.

Kurosawa provides 4 different versions of the same event-from the perspective of the wife, thief, woodcutter and the spirit of the husband.

All 4 descriptions different from each other in terms of the detailing.

Rashomon Effect

The Rashomon Effect is a term used in psychology to describe the phenomenon of different people having different perceptions or memories of the same event.

There are different way to interpret it:

  • One way to look at it is how there is no single truth to any event
  • The other way to think about it is, how where we stand can affect our perception of a situation making it something different from what it is
  • Another way to think about it is what can you rely own when truth has different versions

Mark Twain once said, and I quote

“Truth is stranger than fiction, because fiction is obliged to stick to possibilities, while truth isn’t”

The movie “12 angry men” depicts the story of a jury trial where one dissenting juror turns around the case.

But the interesting thing is the interpretation of the same facts by different jurors’ basis their personal life experiences and biases.

Personal Applications

There are often, multiple versions of a story that we like to tell.

One is for us, and the other is for the audiences and as the audience changes so does our facts.

Which version is the more relevant to us though?

For example, in investing, often the price action changes the way we relate to the market irrespective of the fundamentals.

2 days the market goes up and the only thing, the anchor can think of is “how a bull run is upon us” and in the opposite case, a recession is just around the corner.

How does something fits into our version of the reality, which is these days also called “post truth determines the version we want to believe in and work with.

One of the reasons so many investors get scarred by the markets is this “unrealistic”, emotional response to money than anything else.

When you let outcome define success, the reality is not based on facts but your personal fiction.


If you, feel trapped, maybe it’s not the markets or advisors but it’s your own “fantasy world”, “post-truth” or “Rashomon effect” and has actually nothing to do with the reality.

Now the choice of getting out of the trap is with you, however, I can understand if you find it difficult to eject yourself out of it.

However next time this happens to you, instead of making yourself believe the post-truth, think about what happened and try to go with it for a change.

Maybe the actual reality compared to the alternate reality might help you survive the shock and move on

Thank you for Reading

Follow my twitter handle @manver1974 for more such shares

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