What is The Mandela Effect?
It refers to a phenomenon where a large group of people collectively misremember or recall an event, fact, or detail in a consistent way, despite evidence to the contrary.
The term originated from the false memory of many people believing that Nelson Mandela, the former South African president, died while imprisoned, when in reality, he was released from prison.
Several theories attempt to explain the Mandela Effect, including confabulation (the brain’s tendency to create false memories), suggestibility (the influence of external factors on memory formation), and collective consciousness.
Examples
Investors may collectively misremember significant economic events or market trends. For instance, some might believe that the financial crisis saw several years of negative returns, when in fact the stock market was actually up in 2007, 2009, 2010, 2011, and 2012. The stock market was only down one year (2008) during the financial crisis.
More recently, during the outbreak of Covid-19, many people believe that when the stock market crashed in 2020, the stock market was negative for the entire year, which was not the case. In fact, in 2020 the stock market was up over 18%.
Recollection of News Headlines
Individuals may misremember news headlines reported by the media, which can impact and influence decisions based on inaccurate information.
The Mandela Effect serves as an interesting example of the complexities of human cognition and the malleability of memory.
-Paul R. Rossi, CFA