Farnam Street
Mastering the best of what other people have already figured out
This isn’t my advice, it comes from the 1973 book How to Get Rich Slowly, But Almost Surely: Adventures in Decision-Making by William Morris. “It’s foolish,” Morris writes, “to suppose that anyone could give you a set of rules for making …
Great decisions come from understanding where you have an advantage. Ted Williams, baseball’s last .400 hitter, demonstrated this principle through a remarkably systematic approach to hitting. Williams divided the strike zone into 77 …
We all know one, the Monday morning quarterback. They walk into the meeting room primed and ready for action. Ready that is, to apply the knowledge they know now to decisions of the past. And too often we’re defenseless. The outcome …
A simple and easy approach to decision making that prevents us from being manipulated. Understand the forces at play. Understand how your subconscious might be leading you astray. *** While most of us make decisions daily, few of us have a …
Two important nuggets from an interview with Chip Heath, co-author of Decisive (more here), on improving our ability to make better decisions: A decision-making magic trick The closest thing to a decision-making magic trick that I’ve found …
Below are three excerpts from a great interview with Rory Sutherland on decision making psychology. Understanding Human Behavior That attempt to model economic behaviour as though it were Newtonian physics was responsible for many past …
You’re probably not as effective at making decisions as you could be. This article explores Chip and Dan Heaths’ new book, Decisive. It’s going to help us make better decisions both as individuals and in groups. But before …
We all make decisions. Some of them are large and many of them are small. Few of us understand that the process we use to make those decisions is more important than the analysis we put into the decision. *** Think of the last major …
Richard Zeckhauser, aka Mr. Probability, is a champion Bridge player and the Frank Ramsey professor of political economy at Harvard University. Speaking about Zeckhauser, Charlie Munger, the brilliant business parter of Warren Buffett, …
In The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing, Michael Mauboussin goes beyond the general idea that luck is important to outcomes. He explains the type of interactions where luck is important and …
“A decision is responsible,” wrote Charles Frankel, “when the man or group that makes it has to answer for it to those who are directly or indirectly affected by it.” Think about that for a second. How often does …
Making decisions is a fundamental life skill. Expecting to make perfect decisions all of the time is unreasonable. When even an ounce of luck is involved, good decisions can have bad outcomes. So our goal should be to raise the odds of …
Good decisions don’t always have a good outcome, just as bad decisions don’t always have bad outcomes. Sometimes bad outcomes happen to good decisions. And sometimes good things happen to bad decisions. Learning to distinguish …
Michael Mauboussin, chief investment strategist at Legg Mason and our first interview on the podcast, offers two simple techniques to improve the quality of your decision making: a decision journal and a checklist. 1. Create a decision …
When Charles Darwin set out to marry, he employed a technique pioneered half a century earlier by Ben Franklin. Despite his importance, the prolific Franklin often gave his practical wisdom to many of those who asked. In the summer of 1772, …
Great article in the financial times with the subtitle: Watching the world’s best tennis players at Wimbledon over the next fortnight can help us make better decisions. Here is what I learnt from interviewing more than 100 experts in …
When consuming information, we strive for more signal and less noise. The problem is a cognitive illusion: we feel like the more information we consume the more signal we receive. While this is probably true on an absolute basis, Nassim …
**reader suggestions are at the bottom*** This is a great way to build your antilibrary. Predictably Irrational by Dan Ariely Mentioned by many others. Outstanding experimentally-driven analysis of human irrationality. Nudge by Richard …
Gary Klein‘s book Streetlights and Shadows looks at commonly held maxims for decision-making and overturns them, revealing cases where these practices break down. The book is an impressive look at why these problems occur and how we …
The paper below finds a link between having a sense of power and ignoring the advice of others. The authors argue that power increases confidence, which can lead to an excessive belief in one’s own judgment. This, of course, leads to …
The first thing you do in the morning is to make a decision. And those decisions pile up fast. Should I hit snooze? What clothes should I wear? What should I have for breakfast? What combination of choices from Starbucks will make my …
In their 1978 paper Performance Sampling in Social Matches, researchers March and March discussed the implications of performance sampling for understanding careers in organizations. They came to some interesting conclusions with …
We owe thanks to the publishing industry. Their ability to take a concept and fill an entire category with a shotgun approach is the reason that more people are talking about biases. Unfortunately, talk alone will not eliminate them but it …
How can anyone make rational decisions in a world where knowledge is limited, time is pressing, and deep thought is often unattainable? Some decisions are more difficult than others. Yet we’re often forced to make all of our decisions the …