From Daniel Kahneman "Thinking, fast and slow" Beware of the Availability Heuristic! When you are trying to estimate the frequency of something, you will make an estimate based on how easily you can recall it in your mind. This is called the Availability Heuristic....
Psychology Articles
Don’t let stories distort your view of reality due to the Representativeness Bias
From Daniel Kahneman "Thinking, fast and slow" Don't Let Stories Distort Your View of Reality! Let's say you are trying to predict something. If you read a story or description of something, you will overweight this description as evidence and underweight the Base...
Beware of the Optimism Bias.
From Daniel Kahneman "Thinking, fast and slow" Beware of the Optimism Bias! "In terms of its consequences for decisions, the optimistic bias may well be the most significant of the cognitive biases. Because optimistic bias can be both a blessing and a risk, you should...
How much of success is due to luck?
From Daniel Kahneman "Thinking, fast and slow" How Much of Success is Due to Luck? "A recurrent theme of this book is that luck plays a large role in every story of success; it is almost always easy to identify a small change in the story that would have turned a...
Even well trained statisticians get fooled by the small numbers Bias
From Daniel Kahneman "Thinking, fast and slow" Even Statisticians Get Fooled by the Small Numbers Bias. The law of small numbers state:"Large samples are more precise than small samples.""Small samples yield extreme results more often than large samples do." (p....
You might say “I knew it!” but you probably had Hindsight Bias.
From Daniel Kahneman's "Thinking, fast and slow" What is Hindsight Bias? "The tendency to revise the history of one’s beliefs in light of what actually happened produces a robust cognitive illusion." (p. 203)"A general limitation of the human mind is its imperfect...
Smile
From Carnegie's "How to Win Friends and Influence People. Smile "Charles Schwab told me his smile had been worth a million dollars. And he was probably understating the truth. For Schwab’s personality, his charm, his ability to make people like him, were almost wholly...
How to make decisions according to Buffet, Munger and Bevelin
From Peter Bevelin's "All I want to know is where I'm going to die so I'll never go there." How to Make Decisions: "People chronically misappraise the limits of their own knowledge; that's one of the most basic parts of human nature. Knowing the edge of your circle of...
How to avoid Confirmation Bias by Buffett, Munger, and Bevelin.
From Peter Bevelin's "All I want to know is where I'm going to die so I'll never go there." How to Avoid Confirmation Bias: "It is easy to see that a quickly reached conclusion...combined with a tendency to resist any change in that conclusion, will naturally cause a...
Investing tips from Buffett, Munger, and Bevelin
From Peter Bevelin's "All I want to know is where I'm going to die so I'll never go there." Investing tips from Buffet, Munger, and Bevelin: "I pay no attention to economic forecasting. I worry about being in good business with good people. That's all I focus...