The Psychology of Human Misjudgement - Charlie Munger Full Speech
BuffettMungerWisdom6 HN recommenders · 2014–2023
1.4M views · talk · evergreen · Uploaded 2013-01-14
Audio of Charlie Munger's 1995 Harvard speech on the psychology of human misjudgment, laying out a framework of cognitive biases and mental models for decision making. It covers factors like incentives, social proof and denial.
HN regards it as a classic to revisit every few years for improving decisions and self-awareness.
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7 comments from Hacker News
Your first question is "can you make a conscious effort to get better at [being resourceful]?" The answer is almost certainly yes. Techniques for being resourceful are very specific to the individual, so what works for one person may not for another. That being said... The first thing I would do is meditate. It is becoming trendy, but I think for a good reason. By complete coincidence, [LINK] is a news article that showed up this morning. I think if a man like Steve Jobs arranges for a book on meditation (and self-actualization) to be given to the attendees of his own funeral, that is a powerful sign. Talk to other people about challenges you face. This sounds simple, but it is effective. Another way of saying "I need a creative solution" is "I need a solution that I wouldn't have come up with". To me, that sounds like "I need a solution someone else came up with". Every successful business leader has advisors. So should you. There is a talk by Charlie Munger (of Berkshire Hathaway fame) about decision making. It tends to focus on mistakes, but if you know what mistakes to avoid, it can help you find the right answer. [VIDEO] Tell me what you think about these.
Unless you enjoy misery, trolling, and derive satisfaction from forcing other people to make stupid decisions. Personally I'm more than happy losing a bid if I make someone else suffer winner's curse just because they are blinded by escalation of commitment and a long list of other biases. One of my favourite speeches touching on the subject: The Psychology of Human Misjudgement - Charlie Munger Full Speech bit about auctions is at 59:30 [VIDEO] text [LINK]
You can also listen to him giving this speech here: [VIDEO] I revisit this material every couple years. It's so easy to fall into these traps in your thinking.
It’s not a rule but an observation. We can certainly become more self-aware and change our behavior. Munger’s Psychology of human misjudgment, for instance, is enlightening: [VIDEO]
For those uncertain of how to treat this information, these are the razors I've used on myself the past few weeks: [VIDEO] [VIDEO]
Develop an intuitive understanding of the key mental models mentioned by Charlie Munger in his classic speech given to a Harvard class 25 years ago: "The Psychology of Human Misjudgment," by Charlie Munger [VIDEO] [LINK] If I may paraphrase Mr. Munger, you never want to be a one-legged man in the ass-kicking contest of life.
As billionaires go, he seemed unusually down to earth. I listen to his lecture on "The Psychology of Human Misjudgement" every few years: [VIDEO]