Here is an excerpt from 250words.com on commonly misused terms such as risk, uncertainty, forecast, and prediction and then a book review on The Art of Thinking Clearly by Rolf Dobelli.
In the past few months, I’ve published several posts that contain helpful tips on judgment and decision-making. Most recently, I wrote about the three types of overconfidence: overprecision, overestimation, and overplacement. According to Phil Rosenzweig, the author of Left Brain, Right Stuff (see our interview with Professor Rosenzweig here), one type of confidence is helpful whereas the other two are not.
In a post on Gerd Gigerenzer’s Risky Savvy, I distinguished between four commonly misused terms: risk, uncertainty, forecast, and prediction. I’ve enjoyed Michael Mauboussin’s books—The Success Equation and Think Twice. Mauboussin is head of Global Financial Strategies at Credit Suisse and a professor of finance at Columbia Business School. He has a helpful way to distinguish skill from luck, as well as a 5-point checklist for making better decisions.
My favorite post on decision-making comes not from a psychologist or investor but Charles Murray, a social scientist. Murray just published A Curmudgeon’s Guide to Getting Ahead (see out interview with Murray here), a funny but practical book that contains writing and thinking tips. I wrote about “4 Tips for Writing and Thinking Well” as recommended by Murray.
Inflation has been a big focus of Wall Street in recent months, and it won't go away any time soon. But where do we stand with inflation? Has it peaked, or will it continue higher? Q2 2021 hedge fund letters, conferences and more Nic Johnson of PIMCO, Catherine LeGraw of GMO, and Evan Rudy of Read More
Next is The Art of Thinking Clearly, a book I read this weekend. The author is Swiss novelist Rolf Dobelli. The book contains 99 short chapters, each of which explains a thinking error with an example from the real the world. I picked my 4 favorite and listed each below.
The Art of Thinking Clearly, in 4 Steps
Why You Should Visit Cemeteries: Survivorship Bias
Murder Your Darlings
Why We Prefer a Wrong Map to None at All
When You Hear Hoofbeats, Don’t Expect a Zebra
See full article by 250words.com
The Art of Thinking Clearly by Rolf Dobelli
The Art of Thinking Clearly by world-class thinker and entrepreneur Rolf Dobelli is an eye-opening look at human psychology and reasoning — essential reading for anyone who wants to avoid “cognitive errors” and make better choices in all aspects of their lives.
Have you ever: Invested time in something that, with hindsight, just wasn’t worth it? Or continued doing something you knew was bad for you? These are examples of cognitive biases, simple errors we all make in our day-to-day thinking. But by knowing what they are and how to spot them, we can avoid them and make better decisions.
Simple, clear, and always surprising, this indispensable book will change the way you think and transform your decision-making—work, at home, every day. It reveals, in 99 short chapters, the most common errors of judgment, and how to avoid them.
The Art of Thinking Clearly: Review
*Starred Review* Why do we stay in bad relationships or stubbornly hold on to failing investments? Dobelli, author and founder of Zurich.Minds, a community of thinkers, explores the natural tendencies we have to think illogically and how we can overcome them. The Art of Thinking Clearly is not a facile how-to book but a serious examination of the faulty reasoning that leads to repeated mistakes by individuals, businesses, and nations. Among the logical errors Dobelli explores are survivorship bias, or systematic overestimation of the chances for success, and social proof (otherwise known as herd mentality), or feeling that an action or decision is correct because so many others are doing the same thing. Herd mentality is often demonstrated in the stock market, triggering bubbles and panics alike. Dobelli warns against the influence of so-called experts, news anchors, beautiful people, teams of workers, and others, cautioning readers to learn to think clearly for themselves. He offers some 99 common errors, drawing on social science, psychology, economics, and politics for amusing and sobering examples of the failure to think logically. In this fascinating book, Dobelli does not offer a recipe for happiness but a well-considered treatise on avoiding “self-induced unhappiness.” –Vanessa Bush –This text refers to the Hardcover edition.
“A fireworks show of insights into how our minds work. If you want to avoid tripping on cognitive errors, read The Art of Thinking Clearly.” (Iris Bohnet, Professor and Academic Dean, Harvard Kennedy School, Director of the Harvard Decision Science Laboratory)
“Dobelli examines our most common decision-making failings with engaging eloquence and describes how to counter them with instructive good sense.” (Robert Cialdini, author of Influence)
“…a serious examination of the faulty reasoning that leads to repeated mistakes by individuals, businesses, and nations…In this fascinating book, Dobelli does not offer a recipe for happiness but a well-considered treatise on avoiding ‘self-induced unhappiness.’” (Booklist (starred review))
“…easy-going prose…what [Dobelli] does is pinpoint exactly the assumptions, bias and illusions that shape our thinking and decision-making processes in both business and personal relationships that can cost us dearly as individuals and as a society.” (Financial Times)