Charlie Munger: The Complete Investor (Columbia Business School Publishing)

by Tren Griffin

doubt-avoiding tendency. The desire to resist any change in a given conclusion or belief is particularly strong if a person has invested a lot of effort in reaching that conclusion or belief and/or if the change will result in something that is unpleasant. This is a major reason why progress in many professions tends to advance “one funeral at a time.” An example of this phenomenon can be found in the many companies which refused to recognize that personal computers or mobile phones were a threat to their business. Absence of the inconsistency-avoidance tendency among some people operates to benefit society. For example, company founders who are not wedded to old ideas can sometimes create innovative new businesses more easily. As another example, an executive may cling to an idea he or she has publicly advocated, even after facts come to light proving the idea false. One way to avoid this problem is to be very careful about what you say in public. Also, be aware that once you say something in public, you may be blind to disconfirming evidence. Mark Twain’s statement comes to mind on this tendency: “All you need in this life is ignorance and confidence; then success is sure.”7 Some entrepreneurs often don’t know enough to think that something can’t be done, so once in a while they actually do something that is completely unexpected. As the old saying goes, even a blind squirrel finds a nut once in a while.