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The unsuccessful don’t write books or give lectures on their failures.
People systematically overestimate their chances of success.
Social proof, sometimes roughly termed the “herd instinct,” dictates that individuals feel they are behaving correctly when they act the same as other people.
The sunk cost fallacy is most dangerous when we have invested a lot of time, money, energy, or love in something. This investment becomes a reason to carry on, even if we are dealing with a lost cause. The more we invest, the greater the sunk costs are, and the greater the urge to continue becomes.
Rational decision making requires you to forget about the costs incurred to date. No matter how much you have already invested, only your assessment of the future costs and benefits counts.
“Facts do not cease to exist because they are ignored,” said writer Aldous Huxley.
Warren Buffett knows: “What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.”
To fight against the confirmation bias, try writing down your beliefs—whether in terms of worldview, investments, marriage, health care, diet, career strategies—and set out to find disconfirming evidence. Axing beliefs that feel like old friends is hard work but imperative.
The availability bias says this: We create a picture of the world using the examples that most easily come to mind. This is idiotic, of course, because in reality, things don’t happen more frequently just because we can conceive of them more easily.
If something is repeated often enough, it gets stored at the forefront of our minds. It doesn’t even have to be true.
We prefer wrong information to no information.
The illusion of control is the tendency to believe that we can influence something over which we have absolutely no sway.
Never judge a decision purely by its result, especially when randomness and “external factors” play a role. A bad result does not automatically indicate a bad decision and vice versa.
Yes, abundance makes you giddy, but there is a limit. When it is exceeded, a surfeit of choices destroys quality of life. The technical term for this is the paradox of choice.
we respond to the expected magnitude of an event (the size of the jackpot or the amount of electricity), but not to its likelihood. In other words: We lack an intuitive grasp of probability.
Rara sunt cara, said the Romans. Rare is valuable.
In psychology, this phenomenon is called “reactance”: When we are deprived of an option, we suddenly deem it more attractive.
“All of humanity’s problems stem from man’s inability to sit quietly in a room alone,”
We attribute success to ourselves and failures to external factors. This is the self-serving bias.
William Gibson: “The future is already here—it’s just not very evenly distributed.”
“The greatest obstacle to discovery is not ignorance—it is the illusion of knowledge.”
When you put a lot of energy into a task, you tend to overvalue the result.
In our evolutionary past, whoever thought too long and hard vanished inside a predator’s jaws. We are the descendants of quick decision makers, and we rely on mental shortcuts called heuristics.
Adopt a life strategy similar to a corporate strategy: Write down what not to pursue in your life. In other words, make calculated decisions to disregard certain possibilities and when an option shows up, test it against your not-to-pursue list.
“It’s okay to be envious—but only of the person you aspire to become.”
Statistics don’t stir us; people do.
Most founders sell their shares within ten years.
Absence is much harder to detect than presence. In other words, we place greater emphasis on what is present than on what is absent.
