Tag: Thinking

The Disproportional Power of Anecdotes

Reading Time: 5 minutes

Humans, it seems, have an innate tendency to overgeneralize from small samples. How many times have you been caught in an argument where the only proof offered is anecdotal? Perhaps your co-worker saw this bratty kid make a mess in the grocery store while the parents appeared to do nothing. “They just let that child pull things off the shelves and create havoc! My parents would never have allowed that. Parents are so permissive now.” Hmm. Is it true that most parents commonly allow young children to cause trouble in public? It would be a mistake to assume so based on the evidence presented, but a lot of us would go with it anyway. Your co-worker did.

Our propensity to confuse the “now” with “what always is,” as if the immediate world before our eyes consistently represents the entire universe, leads us to bad conclusions and bad decisions. We don’t bother asking questions and verifying validity. So we make mistakes and allow ourselves to be easily manipulated.

Political polling is a good example. It’s actually really hard to design and conduct a good poll. Matthew Mendelsohn and Jason Brent, in their article “Understanding Polling Methodology,” say:

Public opinion cannot be understood by using only a single question asked at a single moment. It is necessary to measure public opinion along several different dimensions, to review results based on a variety of different wordings, and to verify findings on the basis of repetition. Any one result is filled with potential error and represents one possible estimation of the state of public opinion.

This makes sense. But it’s amazing how often we forget.

We see a headline screaming out about the state of affairs and we dive right in, instant believers, without pausing to question the validity of the methodology. How many people did they sample? How did they select them? Most polling aims for random sampling, but there is pre-selection at work immediately, depending on the medium the pollsters use to reach people.

Truly random samples of people are hard to come by. In order to poll people, you have to be able to reach them. The more complicated this is, the more expensive the poll becomes, which acts as a deterrent to thoroughness. The internet can offer high accessibility for a relatively low cost, but it’s a lot harder to verify the integrity of the demographics. And if you go the telephone route, as a lot of polling does, are you already distorting the true randomness of your sample size? Are the people who answer “unknown” numbers already different from those who ignore them?

Polls are meant to generalize larger patterns of behavior based on small samples. You need to put a lot of effort in to make sure that sample is truly representative of the population you are trying to generalize about. Otherwise, erroneous information is presented as truth.

Why does this matter?

It matters because generalization is a widespread human bias, which means a lot of our understanding of the world actually is based on extrapolations made from relatively small sample sizes. Consequently, our individual behavior is shaped by potentially incomplete or inadequate facts that we use to make the decisions that are meant to lead us to success. This bias also shapes a fair degree of public policy and government legislation. We don’t want people who make decisions that affect millions to be dependent on captivating bullshit. (A further concern is that once you are invested, other biases kick in).

Some really smart people are perpetual victims of the problem.

Joseph Henrich, Steven J. Heine, and Ara Norenzayan wrote an article called “The weirdest people in the world?” It’s about how many scientific psychology studies use college students who are predominantly Western, Educated, Industrialized, Rich, and Democratic (WEIRD), and then draw conclusions about the entire human race from these outliers. They reviewed scientific literature from domains such as “visual perception, fairness, cooperation, spatial reasoning, categorization and inferential induction, moral reasoning, and the heritability of IQ. The findings suggest that members of WEIRD societies, including young children, are among the least representative populations one could find for generalizing about humans.”

Uh-oh. This is a double whammy. “It’s not merely that researchers frequently make generalizations from a narrow subpopulation. The concern is that this particular subpopulation is highly unrepresentative of the species.”

This is why it can be dangerous to make major life decisions based on small samples, like anecdotes or a one-off experience. The small sample may be an outlier in the greater range of possibilities. You could be correcting for a problem that doesn’t exist or investing in an opportunity that isn’t there.

This tendency of mistaken extrapolation from small samples can have profound consequences.

Are you a fan of the San Francisco 49ers? They exist, in part, because of our tendency to over-generalize. In the 19th century in Western America and Canada, a few findings of gold along some creek beds led to a massive rush as entire populations flocked to these regions in the hope of getting rich. San Francisco grew from 200 residents in 1846 to about 36,000 only six years later. The gold rush provided enormous impetus toward California becoming a state, and the corresponding infrastructure developments touched off momentum that long outlasted the mining of gold.

But for most of the actual rushers, those hoping for gold based on the anecdotes that floated east, there wasn’t much to show for their decision to head west. The Canadian Encyclopedia states, “If the nearly 29 million (figure unadjusted) in gold that was recovered during the heady years of 1897 to 1899 [in the Klondike] was divided equally among all those who participated in the gold rush, the amount would fall far short of the total they had invested in time and money.”

How did this happen? Because those miners took anecdotes as being representative of a broader reality. Quite literally, they learned mining from rumor, and didn’t develop any real knowledge. Most people fought for claims along the creeks, where easy gold had been discovered, while rejecting the bench claims on the hillsides above, which often had just as much gold.

You may be thinking that these men must have been desperate if they packed themselves up, heading into unknown territory, facing multiple dangers along the way, to chase a dream of easy money. But most of us aren’t that different. How many times have you invested in a “hot stock” on a tip from one person, only to have the company go under within a year? Ultimately, the smaller the sample size, the greater role the factors of chance play in determining an outcome.

If you want to limit the capriciousness of chance in your quest for success, increase your sample size when making decisions. You need enough information to be able to plot the range of possibilities, identify the outliers, and define the average.

So next time you hear the words “the polls say,” “studies show,” or “you should buy this,” ask questions before you take action. Think about the population that is actually being represented before you start modifying your understanding. Accept the limits of small sample sizes from large populations. And don’t give power to anecdotes.

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Get Smart: Three Ways of Thinking to Make Better Decisions and Achieve Results

Reading Time: 6 minutes

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
— Abraham Lincoln

***

Your ability to think clearly determines the decisions you make and the actions you take.

In Get Smart!: How to Think and Act Like the Most Successful and Highest-Paid People in Every Field, author Brian Tracy presents ten different ways of thinking that enable better decisions. Better decisions free up your time and improve results. At Farnam Street, we believe that a multidisciplinary approach based on mental models allows you to gauge situations from different perspectives and profoundly affect the quality of decisions you make.

Most of us slip into a comfort zone of what Tracy calls “easy thinking and decision-making.” We use less than our cognitive capacity because we become lazy and jump to simple conclusions.

This isn’t about being faster. I disagree with the belief that decisions should be, first and foremost, fast and efficient. A better approach is to be effective. If it takes longer to come to a better decision, so be it. In the long run, this will pay for itself over and over with fewer messes, more free time, and less anxiety.

In Get Smart, Tracy does a good job of showing people a series of simple, practical, and powerful ways of examining a situation to improve the odds you’re making the best decision.

Let’s take a look at a few of them.

1. Long-Time Perspective Versus Short-Time Perspective

Dr. Edward Banfield of Harvard University studied upward economic mobility for almost 50 years. He wondered why some people and families moved from lower socioeconomic classes to higher ones and some didn’t. A lot of these people moved from labor jobs to riches in one lifetime. He wanted to know why. His findings are summarized in the controversial book, The Unheavenly City. Banfield offered one simple conclusion that has endured. He concluded that “time perspective” was overwhelmingly the most important factor.

Tracy picks us up here:

At the lowest socioeconomic level, lower-lower class, the time perspective was often only a few hours, or minutes, such as in the case of the hopeless alcoholic or drug addict, who thinks only about the next drink or dose.

At the highest level, those who were second- or third-generation wealthy, their time perspective was many years, decades, even generations into the future. It turns out that successful people are intensely future oriented. They think about the future most of the time.

[…]

The very act of thinking long term sharpens your perspective and dramatically improves the quality of your short-term decision making.

So what should we do about this? Tracy advises:

Resolve today to develop long-time perspective. Become intensely future oriented. Think about the future most of the time. Consider the consequences of your decisions and actions. What is likely to happen? And then what could happen? And then what? Practice self-discipline, self-mastery, and self-control. Be willing to pay the price today in order to enjoy the rewards of a better future tomorrow.

Sounds a lot like Garrett Hardin‘s three lessons from ecology. But really what we’re talking about here is second-level thinking.

2. Slow Thinking 

“If it is not necessary to decide, it is necessary not to decide.” 
— Lord Acton

I don’t know many consistently successful people or organizations that are constantly reacting without thinking. And yet most of us are habitually in reactive mode. We react and respond to what’s happening around us with little deliberate thought.

“From the first ring of the alarm clock,” Tracy writes, we are “largely reacting and responding to stimuli from [our] environment.” This feeds our impulses and appetites. “The normal thinking process is almost instantaneous: stimulus, then immediate response, with no time in between.”

The superior thinking process is also triggered by stimulus, but between the stimulus and the response there is a moment or more where you think before you respond. Just like your mother told you, “Count to ten before you respond, especially when you are upset or angry.”

The very act of stopping to think before you say or do anything almost always improves the quality of your ultimate response. It is an indispensable requirement for success.

One of the best things we can do to improve the quality of our thinking is to understand when we gain an advantage from slow thinking and when we don’t.

Ask yourself “does this decision require fast or slow thinking?” 

Shopping for toothpaste is a situation where we derive little benefit from slow thinking. On the other hand if we’re making an acquisition or investment we want to be deliberate. Where do we draw the line? A good shortcut is to consider the consequences. Telling your boss he’s an idiot when he says something stupid is going to feel really good in the moment but carry lasting consequences. Don’t React.

Pause. Think. Act. 

This sounds easy but it’s not. One habit you can develop is to continually ask “How do we know this is true?” for the pieces of information you think are relevant to the decision.

3. Informed Thinking Versus Uninformed Thinking

“Beware of endeavouring to be a great man in a hurry.
One such attempt in ten thousand may succeed: these are fearful odds.”
—Benjamin Disraeli

 

I know a lot of entrepreneurs and most of them religiously say the same two words “due diligence.” In fact, a great friend of mine has a 20+ page due diligence checklist. This means taking the time to make the right decision. You may be wrong but it won’t be because you rushed. Of course, most of the people who preach due diligence have skin in the game. It’s easier to be cavalier (or stupid) when it’s heads I win and tails I don’t lose much (hello government).

Harold Geneen, who formed a conglomerate at ITT, said, “The most important elements in business are facts. Get the real facts, not the obvious facts or assumed facts or hoped-for facts. Get the real facts. Facts don’t lie.”

Heck, use the scientific method. Tracy writes:

Create a hypothesis— a yet-to-be-proven theory. Then seek ways to invalidate this hypothesis, to prove that your idea is wrong. This is what scientists do.

This is exactly the opposite of what most people do. They come up with an idea, and then they seek corroboration and proof that their idea is a good one. They practice “confirmation bias.” They only look for confirmation of the validity of the idea, and they simultaneously reject all input or information that is inconsistent with what they have already decided to believe.

Create a negative or reverse hypothesis. This is the opposite of your initial theory. For example, you are Isaac Newton, and the idea of gravity has just occurred to you. Your initial hypothesis would be that “things fall down.” You then attempt to prove the opposite—“things fall up.”

If you cannot prove the reverse or negative hypothesis of your idea, you can then conclude that your hypothesis is correct.

 

***

One of the reasons why Charles Darwin was such an effective thinker is that he relentlessly sought out disconfirming evidence.

As the psychologist Jerry Jampolsky once wrote, “Do you want to be right or do you want to be happy?”

It is amazing how many people come up with a new product or service idea and then fall in love with the idea long before they validate whether or not this is something that a sufficient number of customers are willing to buy and pay for.

Keep gathering information until the proper course of action becomes clear, as it eventually will. Check and double-check your facts. Assume nothing on faith. Ask, “How do we know that this is true?”

Finally, search for the hidden flaw, the one weak area in the decision that could prove fatal to the product or business if it occurred. J. Paul Getty, once the richest man in the world, was famous for his approach to making business decisions. He said, “We first determine that it is a good business opportunity. Then we ask, ‘What is the worst possible thing that could happen to us in this business opportunity?’ We then go to work to make sure that the worst possible outcome does not occur.”

Most importantly, never stop gathering information. One of the reasons that Warren Buffett is so successful is that he spends most of his day reading and thinking. I call this the Buffett Formula.

 

***

If you’re a knowledge worker decisions are your product. Milton Friedman, the economist, wrote: “The best measure of quality thinking is your ability to accurately predict the consequences of your ideas and subsequent actions.”

If there were a single message to Get Smart, it’s another plus in the Farnam Street mold of being conscious. Stop and think before deciding — especially if the consequences are serious. The more ways you have to look at a problem, the more likely you are to better understand. And when you understand a problem — when you really understand a problem — the solution becomes obvious. A friend of mine has a great expression: “To understand is to know what to do.”

Get Smart goes on to talk about goal and result orientated thinking, positive and negative thinking, entrepreneurial vs. corporate thinking and more.

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The Metagame: How Bill Belichick and Warren Buffett Play a Different Game

Reading Time: 3 minutes

The metagame is playing a different game than your competitors. A game they can’t play.

The metagame is a strategy that involves understanding the structural or unconscious reasons that things are the way they are. This is the strategy that Warren Buffett and Bill Belichick use to create an advantage. It’s what smart managers like Ken Iverson do to get the best out of people.

There is an interesting section in an obscure poker book called The Raiser’s Edge that explains the concept of a metagame:

The metagame is this psychological game that exists among players, involving adjustments – adjustments based on how an opponent is likely to interpret a given set of actions. Better players adjust their strategies and styles to those of particular opponents, always analyzing how the opponents are playing in terms of how the opponents believe they’re playing.

Maintaining a well-balanced strategy, while deciphering your opponents’ strategies, is the key to the metagame. If you comprehend the concept of the metagame, accurately perceive the flow of your table and then tournament, and stay alerted to and aware of current strategy trends, you’ll be able to successfully mix up your play when considering your image and that of your opponents. In return, your game will be highly unpredictable and difficult to read, which should be your ultimate goal.

Warren Buffett and Bill Belichick both use the metagame to create an advantage that others have a hard time matching.

Let’s look at Buffett first.

Buffett is widely considered to be the best investor in the world. The company he controls, Berkshire Hathaway, often purchases companies that are public and makes them (effectively) private. For better or worse, public companies have certain environmental constraints. There are numbers to meet (or manage, depending on how you look at it). Expectations to meet. Shareholders who want different things.

The environmental impact of being public often nudges companies toward a path away from their best long-term interest. The timelines of CEOs and shareholders are often not the same.

For example, even if the investment made long-term sense, established companies would have a hard time increasing investment in research and development without an immediate impact (as this reduces earnings.) They’d also have a hard time building inventory (as this increases the amount of the capital required to operate the business).

This divide creates an interesting scenario where public companies can be at a long-term disadvantage to private companies. Private companies can do things that public companies can’t do because of the perceived (or real) environmental norms.

This is where Buffett comes in. He can encourage the CEO of the companies he acquires to take another path. They can take a longer-term view. They can make investments without penalty that won’t pay off for years. They can increase inventory. They can run the company without the worry of meeting quarterly expectations. Because they can take advantage of the environmental factors that public companies are under, private companies can’t easily be copied in this sense.

This isn’t limited to finance and investments. It relates to everything. Bill Belichick, perhaps the best coach in NFL history, uses the same strategy. He plays a different game.

Here’s an example. Last year Belichick traded away one of the team’s most gifted athletes (Jamie Collins) in the first part of the season. While Belichick never came out publicly to say the reasons Collins was traded, he effectively traded one of the teams best players for nothing. Very few coaches would have traded away a star for nothing. Belichick was playing a version of metagame. He was able to do something that was for the good of the team that would be controversial in the media. A strategy that almost no other coach could get away with.

The ancient Romans employed the same strategy. They were excellent at hand-to-hand combat but lacked the naval capabilities of Carthage. So they played a different game … one that played to their strengths and used the enemies strengths against them.

Now you can argue that Buffett and Belichick can do things no other person can. You can argue these are Hall-Of-Famers that get more leeway. But interestingly, that’s the point. Part of their greatness comes from identifying the constraints of others and capitalizing on those structural disadvantages, just like the Romans did.

In any system where there are norms, there are strengths and weaknesses to those norms. If you follow the norms of the system, the results you get are likely to be the norm. When you play a different game, a metagame, you have the opportunity to outperform.

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Arthur Schopenhauer on the Dangers of Clickbait

Reading Time: 4 minutes

German Philosopher Arthur Schopenhauer (1788–1860) influenced some of the more prominent minds in the world. His writings and lessons traverse time and discipline. Schopenhauer confronted similar problems with media to the ones we face.

We live under a constant onslaught of content that is not meant to live beyond the moment in which it appears.

Weaving together two of Schopenhauer’s essays, “On Authorship” (from The Essays of Schopenhauer: The Art of Literature) and “On Reading” we see that he foresaw the problem of clickbait in terms of its distraction from what’s important and how we can fend it off.

Let’s first turn our attention to Schopenhauer’s beliefs on the two kinds of authors and their motivations:

[T]hose who write for the subject’s sake, and those who write for writing’s sake. The first kind have had thoughts or experiences which seem to them worth communicating, while the second kind need money and consequently write for money. They think in order to write, and they may be recognized by their spinning out their thoughts to the greatest possible length, and also by the way they work out their thoughts, which are half-true, perverse, forced, and vacillating; then also by their love of evasion, so that they may seem what they are not; and this is why their writing is lacking in definiteness and clearness.

The author has a moral duty to not cheat the reader. You could write about how our media demands cheating. You could write about how the 24-hour news cycle broadcasts only for the sake of filling up time and generating page views to sell ads.

The author is cheating the reader as soon as he writes for the sake of filling up paper; because his pretext for writing is that he has something to impart. Writing for money [is], at bottom, the ruin of literature. It is only the man who writes absolutely for the sake of the subject that writes anything worth writing.

Instead of the news, we should read good books. More than just read them, we should re-read them.

What an inestimable advantage it would be, if, in every branch of literature, there existed only a few but excellent books! This can never come to pass so long as money is to be made by writing. … The best works of great men all come from the time when they had to write either for nothing or for very little pay.

The bad drives out the good. The problem is bad writers, offering little timeless value, monopolize the time and attention of people that could be otherwise spent on more profitable pursuits.

They are written merely with a view to making money or procuring places. They are not only useless, but they do positive harm. Nine-tenths of the whole of our present literature aims solely at taking a few shillings out of the public’s pocket, and to accomplish this, author, publisher, and reviewer have joined forces.

The fact these views consume us underpins why our views are so shallow. Remember, Schopenhauer was writing at a time when people valued deep work and attention in a way we no longer do. As an audience, it is easier to skim the surface of the volume that is available.

Oh, how like one commonplace mind is to another! How they are all fashioned in one form! How they all think alike under similar circumstances, and never differ! This is why their views are so personal and petty. And a stupid public reads the worthless trash written by these fellows for no other reason than that is has been printed today, while it leaves the works of the great thinkers undisturbed on the bookshelves.

We often forget the existence of words is no statement on their truth.

Incredible are the folly and perversity of a public that will leave unread writings of the noblest and rarest of minds, of all times and all countries, for the sake of reading the writings of commonplace persons which appear daily and breed every year in countless numbers like flies; merely because these writings have been printed today and are still wet from the press.

This is where the art of not reading comes in. We have a choice, even if we refuse to exercise it. Schopenhauer offers us guidance on what to read.

Remember rather that the man who writes for fools always finds a large public: and only read for a limited and definite time exclusively the words of great minds, those who surpass other men of all time and countries, and whom the voice of fame points to as such. These alone really educate and instruct.

Furthering this notion, he adds:

One can never read too little of bad or too much of good books: bad books are intellectual poison; they destroy the mind.

Which can equally apply to the websites and articles that consume us. Before we know it, we develop a Pot-Belly of Ignorance.

Inverting the problem Schopenhauer suggests “in order to read what is good one must make it a condition never to read what is bad; for life is short, and both time and strength limited.”

It is because people will only read what is the newest instead of what is the best of all ages, that writers remain in the narrow circle of prevailing ideas, and that the age sinks deeper and deeper in its own mire.

Still curious? If you’re looking for ways to filter out the noise consider Peter Kaufman’s idea of the three buckets of knowledge and how to choose your next book.

 

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How To Mentally Overachieve — Charles Darwin’s Reflections On His Own Mind

Reading Time: 6 minutes

We’ve written quite a bit about the marvelous British naturalist Charles Darwin, who with his Origin of Species created perhaps the most intense intellectual debate in human history, one which continues up to this day.

Darwin’s Origin was a courageous and detailed thought piece on the nature and development of biological species. It’s the starting point for nearly all of modern biology.

But, as we’ve noted before, Darwin was not a man of pure IQ. He was not Issac Newton, or Richard Feynman, or Albert Einstein — breezing through complex mathematical physics at a young age.

Charlie Munger thinks Darwin would have placed somewhere in the middle of a good private high school class. He was also in notoriously bad health for most of his adult life and, by his son’s estimation, a terrible sleeper. He really only worked a few hours a day in the many years leading up to the Origin of Species.

Yet his “thinking work” outclassed almost everyone. An incredible story.

In his autobiography, Darwin reflected on this peculiar state of affairs. What was he good at that led to the result? What was he so weak at? Why did he achieve better thinking outcomes? As he put it, his goal was to:

“Try to analyse the mental qualities and the conditions on which my success has depended; though I am aware that no man can do this correctly.”

In studying Darwin ourselves, we hope to better appreciate our own strengths and weaknesses and, not to mention understand the working methods of a “mental overachiever.”

Let’s explore what Darwin saw in himself.

***

1. He did not have a quick intellect or an ability to follow long, complex, or mathematical reasoning. He may have been a bit hard on himself, but Darwin realized that he wasn’t a “5 second insight” type of guy (and let’s face it, most of us aren’t). His life also proves how little that trait matters if you’re aware of it and counter-weight it with other methods.

I have no great quickness of apprehension or wit which is so remarkable in some clever men, for instance, Huxley. I am therefore a poor critic: a paper or book, when first read, generally excites my admiration, and it is only after considerable reflection that I perceive the weak points. My power to follow a long and purely abstract train of thought is very limited; and therefore I could never have succeeded with metaphysics or mathematics. My memory is extensive, yet hazy: it suffices to make me cautious by vaguely telling me that I have observed or read something opposed to the conclusion which I am drawing, or on the other hand in favour of it; and after a time I can generally recollect where to search for my authority. So poor in one sense is my memory, that I have never been able to remember for more than a few days a single date or a line of poetry.

2. He did not feel easily able to write clearly and concisely. He compensated by getting things down quickly and then coming back to them later, thinking them through again and again. Slow, methodical….and ridiculously effective: For those who haven’t read it, the Origin of Species is extremely readable and clear, even now, 150 years later.

I have as much difficulty as ever in expressing myself clearly and concisely; and this difficulty has caused me a very great loss of time; but it has had the compensating advantage of forcing me to think long and intently about every sentence, and thus I have been led to see errors in reasoning and in my own observations or those of others.

There seems to be a sort of fatality in my mind leading me to put at first my statement or proposition in a wrong or awkward form. Formerly I used to think about my sentences before writing them down; but for several years I have found that it saves time to scribble in a vile hand whole pages as quickly as I possibly can, contracting half the words; and then correct deliberately. Sentences thus scribbled down are often better ones than I could have written deliberately.

3. He forced himself to be an incredibly effective and organized collector of information. Darwin’s system of reading and indexing facts in large portfolios is worth emulating, as is the habit of taking down conflicting ideas immediately.

As in several of my books facts observed by others have been very extensively used, and as I have always had several quite distinct subjects in hand at the same time, I may mention that I keep from thirty to forty large portfolios, in cabinets with labelled shelves, into which I can at once put a detached reference or memorandum. I have bought many books, and at their ends I make an index of all the facts that concern my work; or, if the book is not my own, write out a separate abstract, and of such abstracts I have a large drawer full. Before beginning on any subject I look to all the short indexes and make a general and classified index, and by taking the one or more proper portfolios I have all the information collected during my life ready for use.

4. He had possibly the most valuable trait in any sort of thinker: A passionate interest in understanding reality and putting it in useful order in his head. This “Reality Orientation” is hard to measure and certainly does not show up on IQ tests, but probably determines, to some extent, success in life.

On the favourable side of the balance, I think that I am superior to the common run of men in noticing things which easily escape attention, and in observing them carefully. My industry has been nearly as great as it could have been in the observation and collection of facts. What is far more important, my love of natural science has been steady and ardent.

This pure love has, however, been much aided by the ambition to be esteemed by my fellow naturalists. From my early youth I have had the strongest desire to understand or explain whatever I observed,–that is, to group all facts under some general laws. These causes combined have given me the patience to reflect or ponder for any number of years over any unexplained problem. As far as I can judge, I am not apt to follow blindly the lead of other men. I have steadily endeavoured to keep my mind free so as to give up any hypothesis, however much beloved (and I cannot resist forming one on every subject), as soon as facts are shown to be opposed to it.

Indeed, I have had no choice but to act in this manner, for with the exception of the Coral Reefs, I cannot remember a single first-formed hypothesis which had not after a time to be given up or greatly modified. This has naturally led me to distrust greatly deductive reasoning in the mixed sciences. On the other hand, I am not very sceptical—a frame of mind which I believe to be injurious to the progress of science. A good deal of scepticism in a scientific man is advisable to avoid much loss of time, but I have met with not a few men, who, I feel sure, have often thus been deterred from experiment or observations, which would have proved directly or indirectly serviceable.

[…]

Therefore my success as a man of science, whatever this may have amounted to, has been determined, as far as I can judge, by complex and diversified mental qualities and conditions. Of these, the most important have been—the love of science—unbounded patience in long reflecting over any subject—industry in observing and collecting facts—and a fair share of invention as well as of common sense.

5. Most inspirational to us of average intellect, he outperformed his own mental aptitude with these good habits, surprising even himself with the results.

With such moderate abilities as I possess, it is truly surprising that I should have influenced to a considerable extent the belief of scientific men on some important points.

***

Still Interested? Read his autobiography, his The Origin of Species, or check out David Quammen’s wonderful short biography of the most important period of Darwin’s life. Also, if you missed it, check out our prior post on Darwin’s Golden Rule.

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Ask Farnam Street #1

Reading Time: 11 minutes

Welcome to the first incarnation of Ask Farnam Street, where we’ll be taking and answering questions on anything you’re curious about that we feel we can answer competently and honestly. This first batch of questions comes straight from our Members.

If you’d like to submit a question for our next Q&A, please send it to us at [email protected] with the title “Ask Farnam Street.” We will choose a group of the most thoughtful questions and answer them right here on the site. 

***

How do we cultivate a good balance between thinking for ourselves and building our own systems to suit our unique personalities, and learning from what other people have already discovered about the world and the systems they’ve built and shared?

This is a pretty common question in a lot of fields. Almost anyone who goes deep on trying to study the success and advice of others eventually wonders if they’ll just become a clone of someone else. But the truth of the matter is that most do eventually “find their way” – where everything you’ve learned coalesces into a system of your own. Purely aping someone else doesn’t work very well and is harder than it sounds anyway.

Here’s an exercise for anyone who likes music: Pick a musical artist you like and find out who influenced them. Then listen to those influences. Does your favorite really sound like those influences? Like, really? Almost never.

You might hear an “echo” of Robert Johnson in the Rolling Stones, but the differences between the two are night and day – the difference between country blues and rock ‘n roll!

Yet if you were to ask Keith Richards, he’d tell you the Stones started out basically doing a poor imitation of old American blues artists. But what they really did was take the soul of that music (and, I might add, early rock and rollers like Elvis and Chuck Berry), added their own spice and reality, and created something entirely new. That’s how creativity works. You don’t just create new things out of the clear blue sky – you have to start with something. Making new connections and associations is creativity.

Even Sam Walton used to say that he basically stole all of the ideas that became Wal-Mart. But what other company was really anything like Wal-Mart? It was completely unique. And why should anyone else have been like Wal-Mart – they were missing the key ingredient…Walton himself!

In these stories lies your answer. Cultivating that balance will happen naturally if you simply break down what you learn to its essence and take what is useful from it. You don’t need to outright copy anyone else, and contrary to popular belief, success isn’t simple imitation. It’s learning the principles behind what made others successful, the underlying reality being demonstrated by that success, and incorporating that reality into your worldview.

Farnam Street is about pursuing an understanding of “the way the world works.” As long as you use those systems you learn from others as a way of getting at the underlying reality – going beyond pure imitation — you will have the opportunity to “make them your own.”

Two quotes sum this up:

Take what is useful, discard what is not, add what is specifically your own.
Bruce Lee

Any truth, I maintain, is my own property.
Seneca

When Charlie [Munger] talks about knowledge across a wide range of disciplines, what are those disciplines, and which does he appear to favor?

Charlie addresses this a little bit in a speech called “A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business”.

He’s talking about the basic disciplines that would make up a really good broad undergraduate curriculum: Math/Statistics, Physics, Chemistry, Biology, Engineering, Complex Systems, Psychology, Business/Economics, Law, with the more fundamental ones being generally most reliable. (1+1 always seems to come out to 2.)

Charlie seems to have made use of models across all disciplines. He probably uses psychology and biology more than most, which is a great lesson. And clearly, he and Buffett have made wise use of Bayesian updating.

But remember, in his own words, “80 or 90 models carry most of the freight” – in other words, you’re looking for the Big Ideas. Something like compound interest from mathematics or incentives from psychology explain a large fraction of what you see around you. And you always have the ability to generate new models that you think are explanatory, accurate, and memorable — that’s part of the fun.

An accurate and fluent understanding of the big models of the world should be your “first principles” — the large trunk and branches on which all of the “leaves” of your knowledge will hang. Without a big solid trunk with big solid branches, what kind of tree do you expect to have?

From there, it’s about synthesizing across the disciplines — understanding where they overlap, conflict, and combine. What do the models in biology and business have in common? What does the concept of entropy have to do with practical life? Well, a great deal. But you have to reach a bit to figure it all out. And as we talk a lot about here, you eventually find that everything seems to be connected to everything else.

Remember, all models are abstractions of reality. George Box put it that “All models are false. Some are useful.”

Reality itself is simply one continuous, flowing entity, but we as humans have to work with our natural apparatus to understand it. Dividing things into little sub-disciplines is one of the ways we go about doing that. Just remember that your end-goal is to understand reality as best as possible; unfiltered and unadulterated. Any way you decide to organize your search for reality must take into account the way humans learn, but always remember that you’re abstracting reality.

How do you choose what next to read? Do you randomly pick a book off the shelf or do you let what you just read pull you towards something that it referenced so you can go deeper into a topic? Do you just wake up in the morning and say I feel like learning about.. this! and go for it? 

It’s a combination of a lot of things, but basically, the underlying principle is always to follow what interests you, right now. We discuss this a few times in our course on reading.

The thing about curiosity, in the words of Nassim Taleb, is that it’s “Antifragile, like an addiction, and is magnified by attempts to satisfy it.” When you go down the curious path on a particular topic, you have to keep letting it pull you down. Don’t just stop because you feel like you should — if you want to keep going, keep going! Learn! Go deep! Trust us on this one: Ride the wave when it’s taking you. It may be a while before you get back up there.

When you decide to get off the path is really going to be an individual judgment, based on how curious you are, how competent you feel you are, and what you plan to do with that information. If you’re going to be a doctor, you have to go “all the way down the path” on the current and most up-to-date understanding of how the human body works, in great detail. Lives depend on it.

But if you’re a lawyer, you might be (rightfully) content to simply try to understand at a high-level how all the main bodily systems work and interact, without being able to do a detailed dissection of the heart. The doctor and the lawyer need not pursue their understanding of human anatomy in anywhere near the same level of detail, but they should both know the Big Ideas. Make sense?

So, long story short, what we’re reading at any given time is simply what currently grabs our curiosity; and there are innumerable ways to get it grabbed. Sometimes we will see a book on the shelf and pull it down, but more frequently it’s connected to something else we’ve read recently and decided to pursue further. Recently we recommended a biography of Will Rogers in Brain Food. Why that one, and why now? Because someone I respect recommended studying his life, and when the book came in, the time “felt right” almost right then and there. (Which is actually unusual — most of our books sit for a while before we read them.)

Did we know much about memory before starting the four-part series? No. But we had studied human personality and social psychology quite a bit, and memory is a logical extension of that. In this case, the book we discussed came straight from the bibliography of another one.

Once your anti-library is sufficiently stocked, finding the next book to read will always be the last of your worries. We always have many “on deck” and recommend you do too.

For the mailbag, this isn’t really a question maybe more of a post request, but I’d love to see a follow-up or update on how your media consumption habits have evolved/changed. The post from Shane a few years back is a personal favorite, and something I’ve found myself revisiting often: 

I’m going to go in a slightly different direction than the question you asked but hang with me.

We’ve been thinking a lot on this recently, with increasing concern that we’re filling our heads with junk. This, we believe, is not only a poor use of our time and causes more mistakes than are necessary but it also reduces our capacity to find the relevant variables in any given situation.

If you think of your mind as a library, three things should concern you.

  1. The information you store in there — its accuracy and relevance;
  2. Your ability to find/retrieve that information on demand; and
  3. Finally your ability to put that information to use when you need it – that is, you want to apply it.

There is no point having a repository of knowledge in your mind if you can’t find and apply its contents (see multiplicative systems).

Let’s talk about the first part today, which is the information you put into your mind.

We feel this is massively misunderstood, resulting in people failing to filter things from entering the “library of the mind.”

If your library is full of crap and falsehoods, you’re going to struggle and spend a lot of time correcting mistakes. You won’t be very productive and you’ll generally muddle through things.

Our minds are like any tool, and needs to be optimized in building this library. Clickbait media is not the stuff we want to put into our mind library. However, this crap is like cocaine — it causes our brains to light up and feel good. The more of it we consume, the more of it we want. It’s a vicious flywheel, like eating sugar.

Our brain isn’t stupid. It doesn’t want this crap, so while it’s giving you a mild dopamine rush, it’s also working very hard to make sure this junk doesn’t make it into your library. This is one reason that people re-read an article and don’t remember having read it. Their brains determined it was trash and subsequently got rid of it rather than storing it.  Sounds good right?

Well, sort of. As hard as our brains work to ensure this crap doesn’t make it into our library, if we keep feeding it junk, we will overwhelm that natural filter. Over days and weeks this isn’t a big problem, but over years and decades, it becomes a huge one.

Junk in the library messes with accuracy, relevance, and gets in the way of effective and efficient use our of brains – it causes issues with retrieving and applying. (Which is most often done by our subconscious. Ever had a great idea in the shower, as you were falling asleep, or while driving? Exactly.)

And while we probably agree that the quality of what enters our head matters, it’s easier said than done.

Consider the CEO with 6 layers of management below him. Something that happens “on the ground floor” of the business, say an interaction between a salesperson and a customer, usually goes through six filters. There is almost no way that information is as accurate as it should be for a good decision after all that filtering.

Now, the CEO might recognize this, but then they have to do something psychologically hard, which is basically say to their direct reports, “I’m not sure I got the right information from you.” They have to go out of their way to seek out more detailed, relevant, independent information from the people close to the problem. (A good assistant will do this for you, but in a political organization they will also be hung out to dry by all parties, CEO included.)

So not only do we need to filter, but we need to be aware of what filters our information has already been through.

Let’s hit on one more related thought.

In our search for wisdom and high quality information to put into our library, we often turn to knowledge nuggets called sound-bytes. These deceptive fellows, also called surface knowledge, make us sound clever and feel good about ourselves. They are also easy to add to our “mind library.”

The problem is surface knowledge is blown away easily, like topsoil. However, we reason, most other people are operating on the same level of surface knowledge! So, in a twisted bout of game theory, we are rarely if ever called out on our bullshit.

The result is that this surface, illusory, knowledge is later retrieved and applied when we’re making decisions (again, often driven by the subconscious) in a variety of contexts, with terrible results. As the saying goes, “Garbage-in equals garbage-out.”

If you’re looking for a quick heuristic you can use for information you’re putting into your library, try the two-pronged approach of:

A. Time
B. Detail.

Time meaning – how relevant is this historically? How long will it be accurate — what will it look like in ten minutes, ten months, ten years? If it’s going to change that soon, you can probably filter it out right here.

One way to determine if the information will stand the test of time is by gauging its accuracy by examining the details. Details are so important that Elon Musk uses them to tell if people are lying during interviews. You want to learn from people with a deep, accurate fluency in their area of expertise: One of the ways you can assess that is through the details they provide. Surface skimming articles are sometimes meant to be readable by the lay public, but more frequently it indicates simply that the author only has surface knowledge! 

So be careful. We’d guess that 99.9% of click-bait articles fail both these filters. They’re neither detailed nor lasting in importance.

The good thing is that you can raise your standards over time. One major reason to read documents by people like Richard Feynman or Charlie Munger is that it gets you used to what really clear thought looks like. If you’re reading shallow, quickly irrelevant media all the time, when will you read Feynman?

For now let’s leave it at that – we’ll have more to say on this in the future. It’s important.

So many people always ask what’s the best book for word-for-word wisdom, or spend hours working out the most efficient means of doing something, which is all great, but in the spirit of a Munger-like avoiding of mistakes, I’d like to hear you and Shane answer what you’ve done in the sphere of learning about the world that’s been the biggest waste of time: the least bang for your mental-investment buck?

Interesting question. It’s hard to answer because everything seems to have some value or another – often it’s in the “what not to do” or “what doesn’t work” sphere, but that is still a useful sphere, so it’s not really a waste.

One thing that does come to mind is speed reading. That is a waste of time and totally counter-productive when you get down to it. If anything, we’ve tried to slow down our reading so we can savor and recall more of what we read. Speed reading is a snare and a delusion, and not worth the time.

Woody Allen had it right: “I took a course on speed reading…and was able to read War and Peace in 20 minutes. It’s about Russia.”

***

If you’d like to submit a question for our next Q&A, please send it to us at [email protected] with the title “Ask Farnam Street.” We will choose a group of the most thoughtful questions and answer them right here on the site. Enjoy!

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