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Editor’s Note: The following is an adapted excerpt from Stephen R. Foerster’s book Trailblazers, Heroes, and Crooks: Stories to Make You a Smarter Investor (Wiley 2024).
Autopilots Gone Wrong
In aviation, autopilots are designed to assist pilots in flying the aircraft, but what happens when these systems go wrong? Let’s take a look at a tragic incident involving Aeroflot 593 in 1994. The flight was on its way from Moscow to Hong Kong when a series of events unfolded, leading to a devastating crash.
Take Your Kids to Work
The story takes a dramatic turn when the pilot’s children are invited into the cockpit to experience flying the plane. A simple gesture to let them “take the controls” turns into a catastrophic chain of events as the autopilot is overridden, leading to a loss of control over the aircraft.
Autopilot Override
While autopilots have revolutionized aviation, they are not infallible. The story delves into the history of autopilot technology and how a simple act of overriding the system led to a fatal outcome in the case of Aeroflot 593.
“Why Is It Turning?”
The harrowing moments leading up to the crash are described in detail, highlighting the confusion and desperate attempts to regain control. Despite the pilots’ efforts, the plane ultimately crashes, claiming the lives of all 75 individuals on board.
Warnings Then “Everything’s Fine”
The aftermath of the crash serves as a cautionary tale about the dangers of overriding autopilot systems and the importance of adhering to safety protocols. The pilots’ struggles to stabilize the aircraft underscore the catastrophic consequences of human error in a high-stakes environment.
Autopilots for Investors
Drawing parallels between aviation and investing, the narrative shifts to how investors rely on autopilots in the form of index funds and stop-loss orders to navigate the financial markets. The significance of understanding the limitations of these tools and avoiding emotional decision-making is emphasized.
Overall, the story serves as a poignant reminder of the need to learn from past mistakes and approach investing with a cautious and informed mindset. Just as in aviation, recovering from setbacks and analyzing failures can lead to valuable insights for future success.