Seeking Wisdom: How to make better choices despite our natural biases

I’ve finished reading a very interesting book (Seeking Wisdom) and here is the quick summary of some of the concepts:

Anatomy might influence the behaviour.

Examples:

  • Phineas Gage: survived an iron bar passing through his head, injury’s reported effects on his personality and behavior;
  • Charles Whitman: a brain tumor made him a tower sniper mass murderer.

We are wired for survival, not for society

Brain is composed by 100 billion neurons. Evolution creates the connections required for survival and reproduction based on experiences. According to Margareth Thatcher, humans only cooperate because it’s in their interest too, not because it’s our instinct. We don’t steal because we know in the end it won’t beneficial for anyone, but it took thousands of years to reach a system where humans cooperate on a global scale.

We make mistakes by not considering the whole system

“There will come a time when mathematical ignorance, like public smoking, will become socially unacceptable.” ― Jerry King

Example of wrong problem solving without considering the system:

  • killing the maximum amount of rats by paying people 1$ per rat killed. People don’t care about the target, but their own target (making money), so they’ll grow rat and kill them to maximise their own gain, but not directly solving the rat problem;
  • Mars Climate Orbiter ($327 M operation) landing failed due to a imperial/metric system conversion error;
  • We don’t often think that earning money earlier is better, as it can be invested and generate revenue;
  • We hear a word we just learnt in a new language and we think it’s a lucky coincidence, but it’s not. Wee don’t consider about all the time we hear words we don’t know;
  • We value too much average values, whilst the median value often represent a more accurate representation of the concept (Ed. in a population of 99 people earning on $50,000 a year average, and one earning $10M, the average is $150,000, three times what 99% of the people earn).

We can train our brain to make fewer mistakes by focusing on the main points and thinking without constraints

According to Chalie Munger, we should look at reality from different points of view and try to visualize the big picture (holistic approach). The world is complex and cannot be exaplained by only looking at economy or biology or physics or politics;

He said that we should ignore details and focus on the main pros/cons points, focusing on what’s really important and ignoring the rest. The reason is our brain not being able to evaluate too many things, it’s easier to decide with fewer elements.

The best decision are made when we don’t have time limits and we are not judged. Being constantly busy and stressed makes deciding difficult.

Use checklist of filter-out rules, deciding for a “no” at the first one failing

Using checklist is another useful tool. e.g. Warren Buffet has a filter system before buying a business, pulling out at the first filter not passing. The business must be understandable, have a competitive advantage, have a board composed by honest people, have the the right price. If condition n.1 is not met, no reason to go for condition n.2.

For the same reasons, we might only accept to work on a project that: pay at least X, max 1h from home or 2h from home but 2 days a week from home, and done with technologies Y and Z. with this set of rules, low pay will be discarded immediately and won’t waste our time thinking that maybe it’s an option as is near home and done exactly with techs Y and Z.

Study failures to avoid repeating them

Learning what went wrong it’s a useful exercise, as well as imaging to have achieved the result and thinking backward (was this what I really wanted ?)

Charlie Munger and Warren buffer golden rules and quotes about knowledge and expanding your points of view

  • Knowledge produces compound interests (one hour a day for growth recommended);
  • if you keep reading and thinking you will never have work problems;
  • admit your stupidity (not to repeat a mistake);
  • don’t sell what you wouldn’t buy;
  • destroy one of your ideas every year;
  • have no ideologies (they hide the facts);
  • expand your way of looking at things;
  • You don’t have to do extraordinary things to get extraordinary results;
  • The best way to minimize risk is to think.

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