Seeking Wisdom: From Darwin to Munger - Peter Bevelin (Highlight: 277; Note: 0)
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◆ Acknowledgments
▪ She is the wind beneath my wings.
◆ Introduction
▪ What do we want out of life? To be healthy, happy with our families, in our work, etc? What interferes with this? Isn't it often emotions like fear, anger, worry, disappointment, stress, and sadness caused by problems, mistakes, losses, or unreal expectations?
▪ I believe in the discipline of mastering the best that other people have ever figured out. I don't believe in just sitting down and trying to dream it all up yourself Nobody's that smart.
▪ patience to reflect or ponder for any number of years over any unexplained problem
▪ I am not apt to follow blindly the lead of other men
▪ The reading of all good books is like conversation with the finest minds of past centuries.
▪ Psychology Professors Daniel Kahneman and the late Amos Tversky’s work on decision-making has also been useful.
▪ Richard Dawkins
◆ What We Feel and Think Depends on Neural Connections
▪ it is not the number of cells that is important but the number of potential connections between them
▪ High levels of dopamine are believed to increase feelings of pleasure and relieve pain.
▪ mechanism called RNA interference that could"switch off" a gene by blocking this process. RNA interference plays a key role in our defenses against viral infections.
▪ Blue eyes are recessive.
▪ if both the child’s parents have blue eyes, the child has no choice but to be blue-eyed.
◆ Behaviour Is Influenced by Our State of Mind
▪ If we have to make a judgement, will it be the same in both cases?
◆ The Evidence for Evolution
▪ Evolution is at work today. Evidence of evolution is seen in pesticide resistance among insects and the antibiotic resistance of bacteria.
◆ A Tendency for Fear
▪ fear is our biological warning signal for avoiding pain
▪ if the situation is one that you’ve experienced before (since our brain is continuously being"rewired" with life experiences), the final reaction may be to calm down
◆ Seeking Explanations
▪ To understand how an event happened helps us predict how it could happen again. This is why we always look for patterns and causal relationships among objects, actions, and situations
▪ the brain seems particularly attracted to new information and novel experiences. Recent studies suggest that the brain responds to novelty
▪ finding new ways to deal with the world is superior to over-training old patterns
▪ Further studies suggest that we learn better when we mix new information with what we already know.
◆ Males and Females Have Different Priorities
▪ Once an individual has survived past the age of reproduction, the individual is evolutionarily useless.
▪ Since the goal of evolution is reproduction, a man should want to have sex with as many women as possible.
◆ Some Decisions Are Not in Our Best Interest
▪ The Prince
▪ we’re rational and we very seldom let extraneous factors interfere with our thoughts
◆ One: Misjudgements Explained by Psychology
▪ If you want to avoid irrationality, it helps to understand the quirks in your own mental wiring and then you can take appropriate precautions
▪ biases that often influence us subconsciously
▪ The more emotional, confused, uncertain, insecure, excited, distracted, tired or stressed we are, the easier we make mistakes.
▪ minimizing effort and a preference for default options
▪ behaviour that seems irrational may be fully rational from the individual’s point of view
▪ Most of the explanations are based on work done by Charles Munger, Psychology Professor Robert Cialdini, behavioural Science and Economics Professor Richard Thaler, Psychology Professor Robyn Dawes, Psychology Professor Daniel Gilbert, and Psychology Professors Daniel Kahneman and the late Amos Tversky.
◆ 1. Mere Association
▪ We can take bad news, but we don’t like it late.
▪ We see similar situations where they don’t exist because a situation resembles an earlier experience.
▪ Keep in mind
◆ 2. Reward and Punishment
▪ behaviour that is rewarded on an unpredictable basis has the highest rate of response and is the most difficult to extinguish
▪ The chains of habit are too weak to be felt until they are too strong to be broken.
▪ our experiences seem longer when broken into segments
▪ Immediate losses are preferred over delayed ones. Just as we don’t like bad experiences, we also don’t like waiting for them. We like to get over them fast.
▪ Don’t over-learn from your own or others bad or good experience. The same action under other conditions may cause different consequences.
▪ Tie incentives to performance and to the factors that determine the result you want to achieve.
▪ If we reward people for doing what they like to do anyway, we sometimes turn what they enjoy doing into work. The reward changes their perception.
▪ But a reward that feels controlling and makes us feel that we are only doing it because we’re paid to do it, decreases the appeal.
▪ We are generally the better persuaded by the reasons we discover ourselves than by those given to us by others.
◆ 3. Self-Interest and Incentives
▪ Advisors are paid salesmen and may trick us into buying what we don’t need.
▪ Investment bankers have every incentive to get initial public offerings (IPO) deals done, regardless of the company’s quality.
▪ they don’t talk about the limits of their knowledge. Their careers are at stake
▪ People who are rewarded for doing stupid things continue to do them.
▪ projections or forecasts. They create an illusion of apparent precision.
▪ Since the risk of losing is more motivating than the chance of gaining, we stand a better chance changing people if we appeal to their fear of losing something they value - job, reputation, status, money, control, etc.
▪ It is better to convince people by asking questions that illuminate consequences. This causes them to think for themselves and makes it more likely that they discover what's in their best interest.
◆ 4. Self-Serving Tendencies and Optimism
▪ we can’t all be better than average
▪ When we fail, we blame external circumstances or bad luck.
▪ We also underestimate luck and randomness in outcomes.
▪ Give someone a tool and they’ll want to use it, and even overuse it, whether it’s warranted or not.
▪ integrity, intelligence, experience, and dedication. That’s what human enterprises need to run well
◆ 5. Self-Deception and Denial
▪ Wishful thinking is rooted in denial, offering us a more pleasant reality. In business, this is one reason for project delays
▪ Refusing to look at unpleasant facts doesn’t make them disappear. Bad news that is true is better than good news that is wrong.
◆ 6. Consistency
▪ Devising reasons why we might be wrong doesn’t come easily.
▪ The task of man is not to see what lies dimly in the distance, but to do what lies clearly at hand.
▪ In the labelling technique, people try to get us committed by first applying a label to our personality or values that is consistent with the behaviour they want us to take.
▪ They make us first agree to a small request, so small that no one would refuse. This way they create a commitment. Then they make a second and larger request (the one they wanted all along).
▪ the researcher asked the subject to"please watch my things" which they all agreed to do
▪ Never underestimate the power of ideology.
▪ Heavy ideology is one of the most extreme distorters of human cognition.
▪ Decisions should be based on where you want to be. Not where you’ve been.
▪ What do I want to achieve? What causes that? Considering what I know today and what is likely to happen in the future, how should I act to achieve my goal?
◆ 7. Deprival Syndrome
▪ We dislike losing the things we have more than we appreciate gaining the things we don’t have.
▪ This is why many companies offer money-back guarantees on their products. Once we have taken possession of some item, we are not likely to return it.
▪ One of the important things in stocks is that the stock does not know that you own it. You have all these feelings about it: You remember what you paid. You remember who told you about it - all these little things. And it doesn’t give a damn. It just sits there.
▪ To forbid us something is to make us want it.
▪ Forbid someone to do something and they find it more attractive than they did before it was forbidden.
▪ fear of scarcity encourages hoarding
◆ 8. Status Quo and Do-Nothing Syndrome
▪ Nothing will ever be attempted if all possible objections must first be overcome.
▪ We prefer to keep things the way they are. We resist change and prefer effort minimization. We favour routine behaviour over innovative behaviour.
▪ Predicting rain doesn’t count; building arks does.
▪ Deciding to do nothing is also a decision. And the cost of doing nothing could be greater than the cost of taking an action.
◆ 9. Impatience
▪ Short-term suffering may lead to long term pleasure.
◆ 11. Contrast Comparison
▪ After we buy the big ticket items, the add-ons seem cheap in comparison.
▪ If the change is slow enough, we don’t notice the change.
◆ 13. Vividness and Recency
▪ it is a notorious fact that what interests us most vividly at the time is, other things equal, what we remember best.
▪ we relate to stories better than to logic or fact
▪ We give too much weight to information we’ve seen, heard, read or experienced most recently.
▪ Accurate information is better than dramatic information. Back up vivid stories with facts and numbers.
◆ 14. Omission and Abstract Blindness
▪ We tend to focus only on the present information rather than what information may potentially be missing.
◆ 15. Reciprocation
▪ One way is to feel you are running your own show.
▪ This method of making an exaggerated request and settling for a smaller one is often used in negotiations.
◆ 16. Liking and Social Acceptance
▪ who are similar to us in background, opinion, lifestyle, interest, attitude, looks, values, and belief
▪ We also like the people who give us what we are missing in life.
▪ Asking a favour of someone is likely to increase that person’s liking for us. Why? Because people want to be seen as consistent with their behaviour.
▪ Don’t depend on the encouragement or criticism of others.
◆ 17. Social Proof
▪ "Since nobody is concerned, nothing is wrong. It can’t be an emergency." This is called pluralistic ignorance.
▪ I propose we postpone further discussion of this matter to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.
▪ In a group, we feel anonymous, which reduces our feelings of responsibility.
▪ the great man is he who in the midst of the crowd keeps with perfect sweetness the independence of solitude
◆ 19. Sensemaking
▪ Stories may be selected to prove something and may give us a delusional sense of clarity.
▪ But we should look at earlier decisions in the context of their own time. Perhaps the actions made sense at the time.
▪ We see faces in inkblots and patterns in the movements of stocks.
▪ In hindsight, everything seems obvious. If we look forward, there are many possible outcomes.
◆ 20. Reason-Respecting
▪ Sometimes the word"because," without a sensible reason, is all that matters. We want explanations and the word"because" imply an explanation.
▪ There’s no use memorizing what we don’t understand.
▪ We also need to be motivated to learn. And we can’t be motivated if we don’t understand why we need to learn something. We need to see its practical use.
▪ People can’t be persuaded by what they don’t understand. We underestimate the importance of giving people a reason.
▪ Sometimes it is better to appeal to emotions than to reason since people are more moved by what they feel than by what they understand.
◆ 22. Memory Limitations
▪ Studies show that we remember a face but wrongly remember the time and place we saw it.
◆ 23. Do-Something Syndrome
▪ I have often said that the sole cause of mans unhappiness is that he does not know how to sit quietly in his room.
- Blaise Pascal
▪ We sometimes act because we can’t sit still. We feel bored, impatient, threatened or pressured or we simply desire excitement and stimulation.
▪ we tend to meet any new situation by reorganizing, and what a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization.
▪ Don’t confuse activity with results. There is no reason to do a good job with something you shouldn’t do in the first place.
▪ discipline in avoiding just doing any damn thing just because you can’t stand inactivity
◆ 24. Say-Something Syndrome
▪ People tend to speak even if they have nothing to contribute.
▪ awareness of ignorance is the beginning of wisdom
▪ I have often regretted my speech, never my silence.
▪ He that would live in peace and at ease, must not speak all he knows, nor judge all he sees.
◆ 25 - Emotions
▪ Studies also show that when we are in a state of more rational calm, we underestimate how we will feel and act when we experience intense emotions.
▪ we tend to adapt to most good and bad things and circumstances and make them ordinary
▪ As long as we do not have it, the object of our desire seems greater than anything else; as soon as we enjoy it, we long for something different with an equal craving.
◆ 26. Stress
▪ All people have a certain level of tolerance to stress. Once it is passed, people begin to break down and what they earlier believed and liked are easily changed.
▪ who stayed healthy had a sense of commitment to work and families, felt in control, and had a positive attitude toward challenges. They saw challenges as part of life and an opportunity for growth rather than as a threat.
▪ Happiness and freedom begin with a clear understanding of one principle: Some things are within our control, and some things are not.
▪ Sometimes keeping ourselves busy with something else may cause us to stop worrying.
◆ Contextual Influences
▪ We create our own frames by doing mental accounting.
◆ Some Final Advice From Charles Munger
▪ I don’t want you to think we have any way of learning or behaving so you won’t make a lot of mistakes. I’m just saying that you can learn to make fewer mistakes than other people
▪ Part of what you must learn is how to handle mistakes and new facts that change the odds.
▪ you have to pay special attention to combinatorial effects that create lollapalooza consequences
▪ Spending time pondering may be dangerous.
▪ One of the things that influenced me greatly was studying physics.
◆ Wanted and Unwanted Consequences
▪ Smart, hard-working people aren’t exempt from professional disasters resulting from overconfidence. Often they just go aground in the more difficult voyages on which they choose to embark based on self appraisals in which they conclude that they have superior talents and methods.
◆ The Winner’s Curse
▪ the more bidders there are, the more conservative our bidding should be
▪ If we participate in auctions, we must ascertain the true value of what’s being sold or its value to us.
◆ Predictions
▪ If someone could forecast the stock market, why are they selling advice through $100 newsletters?
▪ Predictions about the future are often just projections of past curves and present trends. This is natural since our predictions about the future are made in the present. We therefore assume the future will be much like the present.
▪ the next time a computer with a perfect memory of the past is said to quantify risks in the future, investors should run — and quickly — the other way.
◆ Scale of Size and Time
▪ Small, slow changes operating over long periods can have great consequences.
◆ Breakpoints, Critical Thresholds and Limits
▪ tends to cascade to a winner-take-all situation
▪ Gordon Moore, one of the founders of Intel
◆ Size and Frequency
▪ Statistics show that the frequency of some events and attributes are inversely proportional to their size.
▪ Still, the patterns are based on past statistics and estimates. They don’t help us to precisely predict future events.
▪ Ask: How do we allocate our time, work, attention and money? Can we identify the few things that really matter?
◆ Three: Causes
▪ What do we want to accomplish? It’s hard to achieve a result if we don’t understand what causes the result to happen.
◆ Random Events
▪ We underestimate the influence of randomness.
◆ Mistaking Correlation for Cause
▪ We tend to assume that when two things happen together, that one causes the other.
◆ Selective Data and Appropriate Comparisons
▪ Often we only consider information or evidence that is presented or available and don’t consider that information may be missing.
▪ How We Know What Isn’t So
▪ even a worthless treatment can appear effective when the base-rate of success is so high
▪ Don’t draw conclusions from what may have been a unique or random event.
◆ Use Basic Maths to Count, Quantify, and Understand Relationships
▪ A 25% reduction only means something if many people are saved.
▪ Not everything that counts can be counted, and not everything that can be counted counts.
◆ The Effect of Exponential Growth
▪ Even a small number of steady growth leads eventually to doubling and redoubling.
◆ The Time Value of Money
▪ Money paid in the future is worth less than money paid today. A dollar received today is worth more than a dollar received tomorrow.
◆ Low Frequency Events
▪ The media has an interest in translating the improbable to the believable.
▪ Consider instead all the times that nothing happens.
▪ He that waits upon fortune, is never sure of a dinner."
◆ Mathematical Expectation
▪ What I love is the risk. Some nights we make money, and other nights we make more money.
◆ Chance Has No Memory
▪ we sometimes believe a good outcome is due. But previous outcomes neither influence nor have any predictive value of future outcomes
◆ The Consequences of Being Wrong
▪ If God doesn’t exist and we don’t believe that God exists, we live a normal life.
▪ We should never risk something we have and need for something we don’t need.
▪ Why do very bright people risk losing something that’s very important to them to gain something that’s totally unimportant?
▪ It’s almost impossible to go broke without borrowed money being in the equation.
◆ Systems Construction and Planning Processes
▪ We learn from history that man can never learn anything from history.
▪ only six out of one million High-Tech ideas turn into a public company
◆ Systems Failure and Accidents
▪ many parts means many opportunities for failure
▪ The more variables we add to a system, and the more they interact, the more complicated we make it and the more opportunity the system has to fail.
▪ Many systems fail because they focus on the machines, not the people that use them.
▪ 1983 Korean airlines Flight 007
▪ medical errors account for between 44,000 to 98,000 deaths in the U.S. every year
▪ The single most common cause of cognitive-based errors was the tendency to stop considering other possible explanations after reaching a diagnosis.
◆ Coincidences
▪ Surprises and improbable events happen if they have enough opportunities to happen.
◆ Making Up Causes for Chance Events
▪ Anything can happen if the number of possibilities is large.
◆ Believing in Miracles
▪ We often pay little or no attention to times when nothing happens.
▪ What is true depends on the amount of evidence supporting it, not by the lack of evidence against it.
▪ 18th Century Scottish Philosopher David Hume
▪ Uncertainty, in the presence of vivid hopes and fears, is painful, but must be endured if we wish to live without the support of comforting fairy tales.
◆ Prior Probabilities
▪ O.J. Simpson
◆ Variability
▪ But what about if John only plays this game once? He should play game 1 since it has less variability.
◆ Effects of Regression
▪ If we do extremely well, we’re likely to do worse the next time, while if we do poorly, were likely to do better the next time. But regression to the mean is not a natural law. Merely a statistical tendency. And it may take a long time before it happens.
◆ Post Mortem
▪ What was my original reason for doing something? What did I know and what were my assumptions? What were my alternatives at the time?
▪ before making an important decision, imagine a failure where things really have gone wrong and ask: What could have caused this?
◆ Part Four: Guidelines to Better Thinking
▪ The brain can be developed just the same way as the muscles can be developed, if one will only take the pains to train the mind to think.
◆ Models of Reality
▪ Is there anything I can do to make my whole life and my whole mental process work better?
◆ What Characterizes a Useful Model?
▪ So you get a huge boost. You accomplish A — and, all of a sudden, you’re getting A + B + C for awhile.
▪ what use is knowledge if we don’t use it?
◆ How Can We Learn an Idea So It Sticks in Our Memory?
▪ What sentence contains the most information in the fewest words?
◆ Search for Explanations
▪ Newton’s 3rd law
▪ intellect wastes unless it is kept in use
▪ a stimulating environment, curiosity and education are nourishment to the brain and therefore healthy
▪ I found that the people who use their brains don’t lose them. It was that simple.
▪ Remember, knowing a definition or memorizing an idea is useless if we don’t understand its meaning.
◆ Two: Meaning
▪ Knowing the name of something doesn’t help us understand it.
▪ one way of understanding is to see what happens
◆ Ask "What Happens?"
▪ If a business is complex or subject to constant change, we’re not smart enough to predict future cash flows.
▪ What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know.
▪ We believe this margin-of-safety principle, so strongly emphasized by Ben Graham, to be the cornerstone of investment success.
▪ Unless, however, we see a very high probability of at least 10% pre-tax returns, we will sit on the sidelines.
▪ But whatever discount rate we use, we should always require a substantial discount from the estimated value in order to justify making the investment.
▪ You can learn a lot about the durability of the economics of a business by observing the price behaviour.
▪ good managerial record (measured by economic returns) is far more a function of what business boat you get into than it is of how effectively you row
▪ Should you find yourself in a chronically-leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
◆ Three: Simplification
▪ You can’t believe how hard it is for people to be simple, how much they fear being simple.
▪ If something is too hard, we move on to something else. What could be more simple than that?
◆ Simplify the Way We Do Things
▪ Make problems easier to solve. Turn complicated problems into simpler ones. Eliminate everything except the essentials.
▪ Look for good enough solutions appropriate to the problem at hand. Not perfection and beauty.
▪ The art of being wise is the art of knowing what to overlook.
▪ There are only a few decisions of real importance.
▪ Don’t collect data randomly. Start with why the particular information is needed in the first place.
◆ Avoid Certain Things
▪ An ounce of prevention is worth a pound of cure.
▪ We can do fine over time dealing with people we like and admire and trust.
◆ Focus Leads to Understanding and Efficiency
▪ serious problem occurs when the management of a great company gets sidetracked and neglects its wonderful base business while purchasing other businesses that are so-so or worse
▪ Loss of focus is what most worries Charlie and me when we contemplate investing in businesses that in general look outstanding.
◆ Focus on What You Can Know and That Makes a Difference
▪ Before attacking a problem ask if it is worth solving or spending time on.
◆ Ask the Right Questions
▪ Sometimes it is harder to understand a problem than to solve it. Asking the important questions may help.
◆ Patience
▪ If you feel like you have to invest every day, you’re going to make a lot of mistakes. It isn’t that kind of a business. You have to wait for the fat pitch.
▪ all that is required is a willingness to bet heavily when the odds are extremely favourable
◆ Four: Rules and Filters
▪ Just as in the case of investing, insurers produce outstanding long term results primarily by avoiding dumb decisions, rather than by making brilliant ones.
◆ Filters
▪ Our definition of understanding is thinking that we have a reasonable probability of being able to assess where the business will be in 10 years.
◆ Elimination
▪ eliminate possibilities and get down to the few that have any chance of success
◆ Five: Goals
▪ Our plans miscarry because they have no aim. When a man does not know what harbor he is heading for, no wind is the right wind.
- Lucius Annaeus Seneca
▪ Don’t say:"I want to have a better life." Be concrete.
▪ What end result do I want? What causes that? What factors have a major impact on the outcome? What single factor has the most impact?
▪ Since big effects — bad or good — happen when we optimize some factors or combine many factors, we should use whatever factors necessary to achieve our goal.
◆ Opportunity Cost
▪ Every minute we choose to spend on one thing is a minute unavailable to spend on other things.
▪ Do we spend ten hours doing repairs on our house or do we use a carpenter? The real cost of doing the repairs ourselves is the money that we would have earned doing something else.
◆ Eight: Quantification
▪ Don’t over-weigh what can be counted and under-weigh what cannot. Beware of false concreteness — often we believe that data based on figures with lots of decimal places are more accurate than words alone.
▪ We can’t expect to get a higher return on investment over time than the underlying business produces on its invested capital over time.
▪ lofty predictions lead to dumb behaviour
▪ I would wager you a very significant sum that fewer than 10 of the 200 most profitable companies in 2000 will attain 15% annual growth in earnings-per-share over the next 20 years.
▪ We are suspicious of those CEOs who regularly claim they do know the future - and we become downright incredulous if they consistently reach their declared targets. Managers that always promise to"make the numbers" will at some point be tempted to make up the numbers.
▪ Business value is a function of the amount and timing of future cash flows. If cash flows decreases and/or appears further off in the future, business value declines.
▪ valuations must change when growth expectations are revised
▪ a seemingly modest shift in assumptions reduce the property’s valuation
▪ The more our calculation depends on cash flows far out in the future, the more opportunities there are for unwanted events, and the more uncertain our expected return.
▪ Look around at the universe of businesses in this world and see how many are earning $80 billion pre-tax - or $70 billion or $60 or $50 or $40 or even $30 billion. You won’t find any.
◆ Falsify and Disprove
▪ Often we don’t see our weaknesses and thus are not motivated to improve.
◆ Ten: Backward Thinking
▪ A lot of success in life and success in business comes from knowing what you really want to avoid— like early death and a bad marriage.
▪ Avoid what causes the opposite of what you want to achieve.
▪ Why do smart people engage in foolish behaviour?
◆ Eleven: Risk
▪ It takes a lot of judgement, a lot of discipline and an absence of hyperactivity.
◆ A Fool and His Money Are Soon Parted
▪ Certain perils that lurk in investment strategies cannot be spotted by use of the models commonly employed today by financial institutions.
◆ Margin of Safety
▪ We can’t predict what is going to happen in life. Never underestimate the chance of rare events.
▪ Charles Munger, Damn Right!
▪ "Do the best that you can do. Never tell a lie. If you say you’re going to do it, get it done. Nobody gives a shit about an excuse. Leave for the meeting early. Don’t be late, but if you are late, don’t bother giving people excuses. Just apologize...Return your calls quickly. The other thing is the five-second no. You’ve got to make your mind up. You don’t leave people hanging."
◆ Life Is Long if We Know How to Use It
▪ Seneca tells us in his Moral Essays that it’s not that we have so little time but that we waste much of it
▪ How late it is to begin to live just when we must cease to live!
▪ We can’t save time, only spend it wisely or foolishly.
▪ The shorter the list, the more likely it is to focus on things that matter.
▪ If we don’t stand for something, we fall for anything.
◆ Be Honest
▪ Day by day, what you choose, what you think, and what you do is who you become. Your integrity is your destiny...it is the light that guides your way.
◆ Act as an Exemplar
▪ I certainly don’t think that you want to turn the country’s major stock exchange into even more of a casino than it is already.
◆ Don’t Take Life Too Seriously
▪ Oscar Wilde
▪ You’ve got to have a reason to jump out of bed in the morning... Don’t look for the money. Look for something you love, and if you’re good, the money will come.
◆ Have Reasonable Expectations
▪ If we don’t hope for much, reality often beats our expectations. If we always expect the best or have unreal expectations, we are often disappointed.
◆ Be Curious and Open-Minded. Always Ask"why"
▪ We should all be children again and see the world as if through the eyes of a curious child without preconceptions.
◆ On How to Change People
▪ appealing to interest is likely to work better as a matter of human persuasion than appeal to anything else
▪ The task was easy to put off - because it was unpleasant.
◆ On the Kind of People We Should Do Business With
▪ sell cheap and tell the truth
▪ We like to do business with someone who loves his company, not just the money that a sale will bring him
◆ On Some Reasons to Why Bad Lending Happen So Often
▪ Adam Smith
▪ the more powerful and useful is any model, the more error it tends to produce through overconfident misuse
◆ On How to Get Worldly Wisdom
▪ what you need is a latticework of mental models in your head. And you hang your actual experience and your vicarious experience (that you get from reading and so forth) on this latticework of powerful models. And, with that system, things gradually get to fit together in a way that enhances cognition.
◆ On What Something Really Mean
▪ always ask,"And then what?" Actually, it’s not such a bad idea to ask it about everything
◆ Rules of Probability
▪ Monty Hall Dilemma
◆ Calculations to Some of the Examples
▪ the probability that 2 people in a group of 23, share birthdays is 1 - 0.493 or 50.7%
◆ Filter 5 — Disprove
▪ How much damage could a competitor do if he doesn’t care about returns?
◆ Bibliography
▪ Lynch Peter, One up on Wall Street, Simon & Schuster, New York, 1989
▪ Longevity Strategy: How to Live to 100 using the Brain-Body Connection
▪ Mandelbrot Benoit B., The Fractal Geometry of Nature
▪ Feynmans Rainbow: A Search for Beauty in Physics and in Life,
▪ Carl Sagan: a life in the cosmos,
▪ Phantoms in the Brain: Probing the Mysteries of the Human Mind
▪ Why Zebras Don’t Get Ulcers
▪ Schwartz Barry, The Paradox of Choice: Why More is Less
▪ The Seven-Day Weekend: A Better Way to Work in the 21st Century
▪ Seneca Lucius Annaeus, On the Shortness of Life,
▪ The Science of Good and Evil: Why People Cheat, Gossip, Care, Share, and Follow the Golden Rule
▪ Thaler Richard H., The Winner’s Curse: Paradoxes and Anomalies of Economic Life,
▪ Vogel Steven, Cats’ Paws and Catapults: Mechanical Worlds of Nature and People
▪ Simply Einstein: Relativity Demystified
▪ Yoerg Sonja, Clever as a Fox: Animal Intelligence