Cognitive Biases & How to Avoid Them

[DooDiligence]

The biggest problem I've had with this board over the years is the lack of obvious but simple critical thinking that would have avoided disasters like all the nat/oil gas plays, SHLD, etc.  Basically, I think a lot of folks on this site miss the forest for the trees.  The focus is on the granular, bottom up approach where instead one should step back and look at things from a top down perspective first.  I have numerous examples of this over the years from folks on this site.

 

I find you're able to concentrate selection bias, simplification bias, clustering illusion and the fallacy of anecdotal evidence to underline what seems to be an investment approach (bottom-up or top-down) issue.

Apologies since I may be missing the courtesy bias. :)

Please explain how it is easy to avoid a disaster, before it happens, if possible.

 

The only thing I can come up with is, "use a condom".

 

;)

[flesh]

What's useful for me is just to assume I'm anywhere from wrong to totally wrong about everything, which is painful. Constant self inflicted cognitive dissonance. I spend hours everyday fessing up to my errors yet being aggressive. I'm aggressive because I'm less wrong than others if I focus on being wrong more often and have the tools to do so. Being correct is not an option, when I win, I've often missed a lot. Left brain Right stuff, stuff.

 

You basically have to become the Homo Economicus that they talk about in all the economics books.

 

You'll know you're on the right track when in every day life you consistently find yourself over weighting accuracy and under weighting being right. The self you think of as you starts to fade away because it was mostly an error causing machine, an amalgamation of false memories and experiences rearing their pointless heads. You'll have fewer arguments and actually change people's minds. Many will start avoiding you because accuracy hurts, only those seeking accuracy will join you're pain, which is few. You've got to be a masochist. You will appear separate from your species. It's a large price to pay. Many of those that can do it will eventually decide not too or unknowingly reintegrate their ego and forget how little they know, flipping the script and only identifying the biases that confirm their premature ejaculations. It's like having sex repeatedly and never climaxing for months or years at a time intentionally. When you infrequently decide to climax, it's a choice and you know it's risky.

 

Eventually, practicing this discipline, you'll learn to step in and out of the new you and the self that communes with your fellow humans, joining their game from time to time.

First discipline, then mastery.

[DooDiligence]

What's useful for me is just to assume I'm anywhere from wrong to totally wrong about everything, which is painful. Constant self inflicted cognitive dissonance. I spend hours everyday fessing up to my errors yet being aggressive. I'm aggressive because I'm less wrong than others if I focus on being wrong more often and have the tools to do so. Being correct is not an option, when I win, I've often missed a lot. Left brain Right stuff, stuff.

 

You basically have to become the Homo Economicus that they talk about in all the economics books.

 

You'll know you're on the right track when in every day life you consistently find yourself over weighting accuracy and under weighting being right. The self you think of as you starts to fade away because it was mostly an error causing machine, an amalgamation of false memories and experiences rearing their pointless heads. You'll have fewer arguments and actually change people's minds. Many will start avoiding you because accuracy hurts, only those seeking accuracy will join you're pain, which is few. You've got to be a masochist. You will appear separate from your species. It's a large price to pay. Many of those that can do it will eventually decide not too or unknowingly reintegrate their ego and forget how little they know, flipping the script and only identifying the biases that confirm their premature ejaculations. It's like having sex repeatedly and never climaxing for months or years at a time intentionally. When you infrequently decide to climax, it's a choice and you know it's risky.

 

Eventually, practicing this discipline, you'll learn to step in and out of the new you and the self that communes with your fellow humans, joining their game from time to time.

First discipline, then mastery.

 

This thread has proven to be even more enjoyable than I thought it would be!

 

---

 

Delayed gratification & paying attention to the beauty around the path.

These things can make communion easier if we don't get all smug & righteous.

People are attracted to competent people who don't make them feel small.

 

An added bonus is that women love delayed gratification!

[Gregmal]

The biggest problem I've had with this board over the years is the lack of obvious but simple critical thinking that would have avoided disasters like all the nat/oil gas plays, SHLD, etc.  Basically, I think a lot of folks on this site miss the forest for the trees.  The focus is on the granular, bottom up approach where instead one should step back and look at things from a top down perspective first.  I have numerous examples of this over the years from folks on this site.

 

This is so friggin true it's cringe worthy. It's the same thing I notice at VIC and other places as well. Some of these numb nuts get so wrapped up on crunching every number down to what is ultimately meaningless information, and compound that by scaring themselves into paralysis by overestimating the likelihood of every risk. It's amusing to watch sometimes. My favorite writeup I think I've seen in the past few years was Torico's VRX pitch last year. Drove the pencil and calculator crowd nuts, got low ratings, and then promptly crushed the returns of all those "well thought out", formulaic pitches you see all over the place.