korrents

← Mental models

Your own biases

Your mind jumps to conclusions and defends them; look for the evidence against you and use checklists.

Our reading of the idea · 22 claims from 4 people, in their own words

The psychology of misjudgment is terribly important to learn, and terribly smart people make bonkers mistakes by failing to heed it

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway The elementary part of psychology—the psychology of misjudgment, as I call it—is a terribly important thing to learn. There are about 20 little principles. And they interact, so it gets slightly complicated. But the guts of it is unbelievably important. Terribly smart people make totally bonkers mistakes by failing to pay heed to it. A Lesson on Elementary Worldly Wisdom As It Relates To Investment Management & Business (USC Business School, 1994)fs.blog · c. 1994All korrents from this piece
    The elementary part of psychology—the psychology of misjudgment, as I call it—is a terribly important thing to learn. There are about 20 little principles. And they interact, so it gets slightly complicated. But the guts of it is unbelievably important. Terribly smart people make totally bonkers mistakes by failing to pay heed to it.

Reaching a conclusion quickly and then resisting any change in it naturally causes many errors of cognition

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway It is easy to see that a quickly reached conclusion, triggered by Doubt-Avoidance Tendency, when combined with a tendency to resist any change in that conclusion, will naturally cause a lot of errors in cognition for modern man. The Psychology of Human Misjudgment (revised text, 2005)fs.blog · c. 2005All korrents from this piece
    It is easy to see that a quickly reached conclusion, triggered by Doubt-Avoidance Tendency, when combined with a tendency to resist any change in that conclusion, will naturally cause a lot of errors in cognition for modern man.

Most people process new and disconfirming information so that their original conclusion remains intact, whereas giving priority to disconfirming evidence was a large part of Darwin’s result

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway Darwin’s result was due in large measure to his working method, which violated all my rules for misery and particularly emphasized a backward twist in that he always gave priority attention to evidence tending to disconfirm whatever cherished and hard-won theory he already had. In contrast, most people early achieve and later intensify a tendency to process new and disconfirming information so that any original conclusion remains intact. How to Guarantee a Life of Misery (Harvard School commencement address, 1986)jamesclear.com · 13 Jun 1986All korrents from this piece
    Darwin’s result was due in large measure to his working method, which violated all my rules for misery and particularly emphasized a backward twist in that he always gave priority attention to evidence tending to disconfirm whatever cherished and hard-won theory he already had. In contrast, most people early achieve and later intensify a tendency to process new and disconfirming information so that any original conclusion remains intact.

One is not entitled to an opinion on a subject until one can state the arguments against one’s position better than its supporters

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway I’m not entitled to have an opinion on this subject unless I can state the arguments against my position better than the people do who are supporting it.” I think only when I reach that stage am I qualified to speak. 2007 USC Law School Commencement Addressjamesclear.com · 13 May 2007All korrents from this piece
    I’m not entitled to have an opinion on this subject unless I can state the arguments against my position better than the people do who are supporting it.” I think only when I reach that stage am I qualified to speak.

The best antidote to excess self-regard is to force oneself to be more objective about oneself, one’s family and friends, one’s property and the value of one’s activity

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway The best antidote to folly from an excess of self-regard is to force yourself to be more objective when you are thinking about yourself, your family and friends, your property, and the value of your past and future activity. This isn’t easy to do well and won’t work perfectly, but it will work much better than simply letting psychological nature take its normal course. The Psychology of Human Misjudgment (revised text, 2005)fs.blog · c. 2005All korrents from this piece
    The best antidote to folly from an excess of self-regard is to force yourself to be more objective when you are thinking about yourself, your family and friends, your property, and the value of your past and future activity. This isn’t easy to do well and won’t work perfectly, but it will work much better than simply letting psychological nature take its normal course.

Objectivity maintenance routines are totally required for correct thinking

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway objectivity maintenance routines are totally required in life if you’re going to be a correct thinker. 2007 USC Law School Commencement Addressjamesclear.com · 13 May 2007All korrents from this piece
    objectivity maintenance routines are totally required in life if you’re going to be a correct thinker.

A loss hurts much more than an equal gain helps

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway The quantity of man’s pleasure from a ten- dollar gain does not exactly match the quantity of his displeasure from a ten-dollar loss. That is, the loss seems to hurt much more than the gain seems to help. The Psychology of Human Misjudgment (revised text, 2005)fs.blog · c. 2005All korrents from this piece
    The quantity of man’s pleasure from a ten- dollar gain does not exactly match the quantity of his displeasure from a ten-dollar loss. That is, the loss seems to hurt much more than the gain seems to help.

People have an automatic tendency to think and act as they see others around them thinking and acting

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway For some such reason, man’s evolution left him with Social-Proof Tendency, an automatic tendency to think and act as he sees others around him thinking and acting. The Psychology of Human Misjudgment (revised text, 2005)fs.blog · c. 2005All korrents from this piece
    For some such reason, man’s evolution left him with Social-Proof Tendency, an automatic tendency to think and act as he sees others around him thinking and acting.

Learning to ignore the examples of others when they are wrong is a skill few skills exceed in worth

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway Learn how to ignore the examples from others when they are wrong, because few skills are more worth having. The Psychology of Human Misjudgment (revised text, 2005)fs.blog · c. 2005All korrents from this piece
    Learn how to ignore the examples from others when they are wrong, because few skills are more worth having.

Liking and loving act as a conditioning device that makes the lover ignore faults, comply with wishes, favor associated things and distort other facts

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway One very practical consequence of Liking/ Loving Tendency is that it acts as a conditioning device that makes the liker or lover tend (1) to ignore faults of, and comply with wishes of, the object of his affection, (2) to favor people, products, and actions merely associated with the object of his affection (as we shall see when we get to “Influence-from-Mere-Association Tendency,” and (3) to distort other facts to facilitate love. The Psychology of Human Misjudgment (revised text, 2005)fs.blog · c. 2005All korrents from this piece
    One very practical consequence of Liking/ Loving Tendency is that it acts as a conditioning device that makes the liker or lover tend (1) to ignore faults of, and comply with wishes of, the object of his affection, (2) to favor people, products, and actions merely associated with the object of his affection (as we shall see when we get to “Influence-from-Mere-Association Tendency,” and (3) to distort other facts to facilitate love.

Pressure from many psychological tendencies at once accounts for extreme results such as the Milgram experiment and the success of some cults

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway This tendency was not in any of the psychology texts I once examined, at least in any coherent fashion, yet it dominates life. It accounts for the extreme result in the Milgram experiment and the extreme success of some cults that have stumbled through practice evolution into bringing pressure from many psychological tendencies to bear at the same time on conversion targets. The Psychology of Human Misjudgment (revised text, 2005)fs.blog · c. 2005All korrents from this piece
    This tendency was not in any of the psychology texts I once examined, at least in any coherent fashion, yet it dominates life. It accounts for the extreme result in the Milgram experiment and the extreme success of some cults that have stumbled through practice evolution into bringing pressure from many psychological tendencies to bear at the same time on conversion targets.

A thinking person needs to assemble their skills into a checklist used routinely, or will miss much that is important

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway It is also essential for a thinking man to assemble his skills into a checklist that he routinely uses. Any other mode of operation will cause him to miss much that is important. The Psychology of Human Misjudgment (revised text, 2005)fs.blog · c. 2005All korrents from this piece
    It is also essential for a thinking man to assemble his skills into a checklist that he routinely uses. Any other mode of operation will cause him to miss much that is important.

Checklist routines avoid a lot of errors, and a checklist is the procedure that works best for putting elementary wisdom to use

  1. Charlie Munger Warren Buffett's business partner and vice chairman of Berkshire Hathaway Checklist routines avoid a lot of errors. You should have all this elementary wisdom and then you should go through and have a checklist in order to use it. There is no other procedure that will work as well. 2007 USC Law School Commencement Addressjamesclear.com · 13 May 2007All korrents from this piece
    Checklist routines avoid a lot of errors. You should have all this elementary wisdom and then you should go through and have a checklist in order to use it. There is no other procedure that will work as well.

Forming an impression very quickly leads to spending the time confirming it rather than collecting evidence, so a wrong first impression is unlikely to be corrected.

  1. Daniel Kahneman Psychologist and Nobel laureate (1934 to 2024) there is the way in which people form impressions very quickly to form an impression and then you spend most of your time confirming it instead of collecting evidence and so if accidentally your impression was in the wrong direction we are going to confirm it and you don't give yourself a chance to correct it Daniel Kahneman | The Knowledge Project #68youtube.com · 12 Oct 2019 · 0:33:10 into the videoAll korrents from this video
    there is the way in which people form impressions very quickly to form an impression and then you spend most of your time confirming it instead of collecting evidence and so if accidentally your impression was in the wrong direction we are going to confirm it and you don't give yourself a chance to correct it

    Watch from 0:33:10 plays here

    ↗Daniel Kahneman | The Knowledge Project #68youtube.com

    12 Oct 2019 · video · 1h 06m · spoken · machine transcript

Strong intuitions that seem clear lack a way of calibrating, which makes people wildly overconfident about what they know and reluctant to accept they may be wrong.

  1. Daniel Kahneman Psychologist and Nobel laureate (1934 to 2024) we have no way of calibrating ourselves so that makes us wildly overconfident about what we know and reluctant to accept that we may be wrong Daniel Kahneman | The Knowledge Project #68youtube.com · 12 Oct 2019 · 1:05:35 into the videoAll korrents from this video
    we have no way of calibrating ourselves so that makes us wildly overconfident about what we know and reluctant to accept that we may be wrong

    Watch from 1:05:35 plays here

    ↗Daniel Kahneman | The Knowledge Project #68youtube.com

    12 Oct 2019 · video · 1h 06m · spoken · machine transcript

The desire to feel right overpowers the desire to be right, because the ego pushes toward feeling right at the expense of being right.

  1. Shane Parrish Founder of Farnam Street (fs.blog) and host of The Knowledge Project podcast our desire to feel right overpowers our desire to be right the ego urges us to feel right at the expense of being right STOP Playing Life on HARD MODE! | Shane Parrishyoutube.com · 3 Oct 2023 · 7:49 into the videoAll korrents from this video
    our desire to feel right overpowers our desire to be right the ego urges us to feel right at the expense of being right

    Watch from 7:49 plays here

    ↗STOP Playing Life on HARD MODE! | Shane Parrishyoutube.com

    3 Oct 2023 · video · 11m · spoken · machine transcript

Trying to prove how right one is leads to ignoring the evidence to the contrary.

  1. Shane Parrish Founder of Farnam Street (fs.blog) and host of The Knowledge Project podcast when you try to prove how right you are you ignore all the evidence to the contrary STOP Playing Life on HARD MODE! | Shane Parrishyoutube.com · 3 Oct 2023 · 8:37 into the videoAll korrents from this video
    when you try to prove how right you are you ignore all the evidence to the contrary

    Watch from 8:37 plays here

    ↗STOP Playing Life on HARD MODE! | Shane Parrishyoutube.com

    3 Oct 2023 · video · 11m · spoken · machine transcript

Holding wrong opinions one is attached to and does not stress test may be the greatest tragedy of most people, and putting ideas out to be stress tested raises the probability of being right.

  1. Ray Dalio Founder of Bridgewater Associates I think the greatest tragedy of mankind and the greatest tragedy of most people is to hold opinions in their head that are wrong that they're attached to and that they don't stress test it's so easy to take those ideas and properly put them out there in an idea meritocratic way and have them stress tests which raises the probabilities of being right Ray Dalio: Principles for a Life Well Lived | Knowledge Project Podcast Archiveyoutube.com · 27 Sept 2022 · 0:13:22 into the videoAll korrents from this video
    I think the greatest tragedy of mankind and the greatest tragedy of most people is to hold opinions in their head that are wrong that they're attached to and that they don't stress test it's so easy to take those ideas and properly put them out there in an idea meritocratic way and have them stress tests which raises the probabilities of being right

Asking "how do I know I'm right?" and triangulating, instead of assuming one is right, gives the humility to balance audacity and brings open-mindedness.

  1. Ray Dalio Founder of Bridgewater Associates I went from thinking you know I'm right to asking myself how do I know I'm right in other words how do I triangulate it gave me the humility I needed to balance with my audacity and so then it gave me an open-mindedness Ray Dalio: Principles for a Life Well Lived | Knowledge Project Podcast Archiveyoutube.com · 27 Sept 2022 · 0:12:18 into the videoAll korrents from this video
    I went from thinking you know I'm right to asking myself how do I know I'm right in other words how do I triangulate it gave me the humility I needed to balance with my audacity and so then it gave me an open-mindedness

A pre-mortem makes it possible to voice doubts when a group is nearing a decision, a point at which dissent is otherwise hard to raise.

  1. Daniel Kahneman Psychologist and Nobel laureate (1934 to 2024) it's beautiful because when people are coming close to a decision it becomes difficult to raise doubts or to raise questions people who are flowing the group down when the group's is nearing a decision a perceivers really you know person I mean you know this you want to get rid of them and the pre-mortem legitimizes that sort of descent and that sort of doubts not only legitimizes that too much rewards it Daniel Kahneman | The Knowledge Project #68youtube.com · 12 Oct 2019 · 0:49:03 into the videoAll korrents from this video
    it's beautiful because when people are coming close to a decision it becomes difficult to raise doubts or to raise questions people who are flowing the group down when the group's is nearing a decision a perceivers really you know person I mean you know this you want to get rid of them and the pre-mortem legitimizes that sort of descent and that sort of doubts not only legitimizes that too much rewards it

    Watch from 0:49:03 plays here

    ↗Daniel Kahneman | The Knowledge Project #68youtube.com

    12 Oct 2019 · video · 1h 06m · spoken · machine transcript

Keeping track of decisions and how they turned out allows later evaluation of the procedures that produced the good and the bad ones.

  1. Daniel Kahneman Psychologist and Nobel laureate (1934 to 2024) I would advise people make a lot of decisions to keep track their decisions and of how they turned out so that later you can come and and evaluate your procedures and and see whether there is anything that is in common with those decision that turned out well and then not so well Daniel Kahneman | The Knowledge Project #68youtube.com · 12 Oct 2019 · 0:54:21 into the videoAll korrents from this video
    I would advise people make a lot of decisions to keep track their decisions and of how they turned out so that later you can come and and evaluate your procedures and and see whether there is anything that is in common with those decision that turned out well and then not so well

    Watch from 0:54:21 plays here

    ↗Daniel Kahneman | The Knowledge Project #68youtube.com

    12 Oct 2019 · video · 1h 06m · spoken · machine transcript

A basic rule for better decisions is to slow down, especially when there is an immediate conviction.

  1. Daniel Kahneman Psychologist and Nobel laureate (1934 to 2024) one basic rule is slow down especially if you if you have the immediate conviction slow down Daniel Kahneman | The Knowledge Project #68youtube.com · 12 Oct 2019 · 0:26:31 into the videoAll korrents from this video
    one basic rule is slow down especially if you if you have the immediate conviction slow down

    Watch from 0:26:31 plays here

    ↗Daniel Kahneman | The Knowledge Project #68youtube.com

    12 Oct 2019 · video · 1h 06m · spoken · machine transcript

More in judgment and risk