Charlie Munger – The Psychology of Human Misjudgment • Hacker News Board

JamesLeonis wrote: post #6

jczhang wrote: post #2

Anyone have a more readable / cliff notes version?

The most readable copy I have. http://tarangshah.com/to-read/MungerMisjudgement.html

Thanks. I hate these pseudo-PDF, book shovelware sites that paywall/proprietarize/socalize content to be useless on readers and generally get in the way.

Re: Charlie Munger – The Psychology of Human Misjudgment

#8

Post by Animats » Tue, Oct 17, 2017, 4:04 AM UTC

That's a fun read. The section on incentives is useful. But he idolizes Patterson, the National Cash Register guy? That guy was the Travis Kalanick of the late 19th century.

"Politics is the art of marshalling hatreds". Munger was way ahead of his time there.

"First-conclusion bias". Huge problem with cops.

"It is not greed that drives the world, but envy" - cited to Warren Buffett. Hmm. He probably ran into too many business types with the mindset "It's not enough to win; someone else has to lose." Such ego trips are not useful to the stockholders.

"Always tell us the bad news promptly. Good news can wait" - Berkshire policy.

"A job hunter who is a marvelous 'presenter' often causes grave danger under modern executive-search practice." - referring to how Carly Fiorina tanked HP.

"An excess of optimism is the normal human condition" - cited to Demosthenes. Didn't know that went back that far.

"Deprival Superreaction" - the asymmetry between gain and loss is well known, but not under that name.

Re: Charlie Munger – The Psychology of Human Misjudgment

#9

Post by steveeq1 » Tue, Oct 17, 2017, 4:16 AM UTC

For those of you who liked this speech, check out his book "Poor Charlie's Almanack": https://www.poorcharliesalmanack.com/

Which contains that speech and other talks that he has given over the years. It's a beautifully illustrated book chock full of his witticisms. I enjoyed it tremendously. Also check out "Seeking Wisdom" (from the same publisher and website). The book was listed as a favorite of Nassim Taleb (whom I am also a fan of). It's one of my favorite books, personally.

Re: Charlie Munger – The Psychology of Human Misjudgment

#10

Post by steveeq1 » Tue, Oct 17, 2017, 4:32 AM UTC

Animats wrote: post #8

That's a fun read. The section on incentives is useful. But he idolizes Patterson , the National Cash Register guy? That guy was the Travis Kalanick of the late 19th century. "Politics is the art of marshalling hatreds". Munger was way ahead of his time there. "First-conclusion bias". Huge problem with cops. "It is not greed that drives the world, but envy" - cited to Warren Buffett. Hmm. He probably ran into too man…

> "First-conclusion bias". Huge problem with cops.

Also check out "availability bias" which Charlie mentions many times in his speeches. Because "x minority shot and killed by police" comes up so many times in the news, this image tends to be readily accesible in our brains when we here the word "cops", thus causing us to vastly overestimte it's probabiltiy of this event actually happening in real life. This causes us to believe the problem is far bigger than it actually is, probabilistically speaking: https://i.imgur.com/tOTcCRH.jpg . (Mind you, those stats are "white men", much less "white men that happen to be policemen") .

Dramatic/emotional information is somehow perceived to be a bigger threat than "real, actual statistcal risk", in other words.

Daniel Kahneman also covers this topic on his excellent "Thinking Fast and Slow": https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow#Availa... which I also recommend.