I've taught thousands of people make smart decisions without getting lucky.
Here is a thread on 5 of the biggest reasons we fail to make effective decisions.
1. We’re unintentionally stupid
We like to think that we can rationally compute information like a computer, but we can’t. Cognitive biases explain why we made a bad decision but rarely help us avoiding them. Better to focus on these warning signs something is about to go wrong.
Warning signs you’re about to do unintentionally something stupid: You’re tired. You’re emotional, in a rush, distracted, operating in a group, or working with an authority figure.
The rule: Never make important decisions when you’re tired, emotional, distracted, or in a rush.
The legendary activist investor talks about lessons he’s learned growing up, raising a family, what drives him forward and back up from failure, consuming information and ideas, and facing criticism.
The Founder and CEO of Social Capital reveals what it means to be an observer of the present, how to think in first principles, the psychology of successful investing.
And it is one of the most powerful thinking tools you can incorporate into your daily life.
Here's how you can use it to think better.
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The trick to inversion is simple: figure out what you don’t want and avoid it.
Charlie Munger, the legendary partner of Warren Buffett summarized inversion when he said, “All I want to know is where I’m going to die, so I’ll never go there.”
Problems get easier when you turn them around. Rather than ask what you can do to be happy, avoid all the things that make you miserable.
There is a concept known as probabilistic thinking.
Here is how you can use it in work and life.
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Probability means different things to different people.
Probabilistic thinking is essentially trying to estimate, using some tools of math and logic, the likelihood of any specific outcome coming to pass.
The core of probabilistic thinking is understanding that nearly infinite alternative outcomes could have taken place than did. This means nearly infinite possibilities are possible going forward, which doesn’t mean they are equally probable.