TB: Seeking Wisdom (Bevelin)
Core Thesis
Wisdom comes from collecting instances of bad judgment, then building mental models and checklists to avoid them. Drawing on Darwin and Munger, this is a catalog of cognitive failure modes and their antidotes.
Key Takeaways
On decision making
- Two questions to ask when making decisions: (A) Is it knowable? (B) Is it important? If not knowable, forget it. If unimportant, it won't matter.
- Predicting rain doesn't count; building arks does.
- We never look at projections, but we care very much about track records. (Buffett)
- Bad news that is true is better than good news that is wrong.
- A very important principle: you don't have to make it back the way you lost it. Trying to is usually a mistake.
On character and integrity
- Preparation, patience, discipline, and objectivity are Munger's most fundamental guiding principles.
- Reputation and integrity are your most valuable assets and can be lost in a heartbeat.
- Track records matter: if you start early to have a perfect track record in honesty, you're well on your way.
- We can't make a good deal with a bad person — we don't try to protect ourselves with contracts; we just forget about it.
- Ethical practices aren't good because they pay; they pay because they are good.
- There should be a huge area between everything you should do and everything you can do legally.
On thinking and psychology
- Bad terminology is the enemy of good thinking. (Buffett)
- Heavy ideology is one of the extreme distorters of human cognition.
- Be problem-oriented, not method-oriented. Use whatever works.
- You've got to have multiple models — with just one or two, you'll torture reality to fit them.
- People over-weigh what can be numbered and under-weigh what can't — precisely because it yields to statistical techniques taught in academia.
- Never get entangled in controversy — it rarely does any good and causes a miserable loss of time and temper. (Darwin)
Munger on physics
- The tradition of always looking for the answer in the most fundamental way available is a great tradition and saves a lot of time.
- Physics trains a thinking system not learned so well anywhere else.
Mental Models
- Incentives Matter — psychology of misjudgment starts with reward/punishment super-response
- Circle of Competencies — you've got to know what you know and what you don't know
- First Principles Thinking — physics trains this most effectively
- Inversion — collect bad judgment, then find ways to avoid it