The Art of Thinking Clearly

Whether we like it or not, we are puppets of our emotions. We make complex decisions by consulting our feelings, not our thoughts. Against our best intentions, we substitute the question, “What do I think about this?” with “How do I feel about this?” So, smile! Your future depends on it.

If 50 million people say something foolish, it is still foolish.

How do you curb envy? First, stop comparing yourself to others. Second, find your “circle of competence” and fill it on your own. Create a niche where you are the best. It doesn’t matter how small your area of mastery is. The main thing is that you are king of the castle.

We must learn to close doors. A business strategy is primarily a statement on what not to engage in. Adopt a life strategy similar to a corporate strategy: Write down what not to pursue in your life. In other words, make calculated decisions to disregard certain possibilities and when an option shows up, test it against your not-to-pursue list. It will not only keep you from trouble but also save you lots of thinking time. Think hard once and then just consult your list instead of having to make up your mind whenever a new door cracks open. Most doors are not worth entering, even when the handle seems to turn so effortlessly.

If your only tool is a hammer, all your problems will be nails,

As paradoxical as it sounds: The best way to shield yourself from nasty surprises is to anticipate them.

There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know,

We are drunk on our own ideas. To sober up, take a step back every now and then and examine their quality in hindsight. Which of your ideas from the past ten years were truly outstanding? Exactly.

Assume that your worldview is not borne by the public. More than that: Do not assume that those who think differently are idiots. Before you distrust them, question your own assumptions.

Facts do not cease to exist because they are ignored,’ said writer Aldous Huxley.

It’s OK to be envious – but only of the person you aspire to become.

it is much more common that we overestimate our knowledge than that we underestimate it.

After receiving the Nobel Prize in Physics in 1918, Max Planck went on tour across Germany. Wherever he was invited, he delivered the same lecture on new quantum mechanics. Over time, his chauffeur grew to know it by heart: “It has to be boring giving the same speech each time, Professor Planck. How about I do it for you in Munich? You can sit in the front row and wear my chauffeur’s cap. That’d give us both a bit of variety.” Planck liked the idea, so that evening the driver held a long lecture on quantum mechanics in front of a distinguished audience. Later, a physics professor stood up with a question. The driver recoiled: “Never would I have thought that someone from such an advanced city as Munich would ask such a simple question! My chauffeur

Certain people make a living from their abilities, such as pilots, plumbers, and lawyers. In other areas, skill is necessary but not critical, as with entrepreneurs and leaders. Finally, chance is the deciding factor in a number of fields, such as in financial markets. Here, the illusion of skill pervades. So, give plumbers due respect and chuckle at successful financial jesters.

do you have at least one enemy? Good. Invite him or her over for coffee and ask for an honest opinion about your strengths and weaknesses. You will be forever grateful you did.

While his school was closed due to an outbreak of plague in 1666–67, twenty-five-year-old Isaac Newton showed his professor, Isaac Barrow, what research he was conducting in his spare time. Barrow immediately gave up his job as a professor and became a student of Newton. What a noble gesture. What ethical behavior. When was the last time you heard of a professor vacating his post in favor of a better candidate? And when was the last time you read about a CEO clearing out his desk when he realized that one of his twenty thousand employees could do a better job?

Patience is indeed a virtue.

Stories attract us; abstract details repel us. Consequently, entertaining side issues and backstories are prioritised over relevant facts.

The human brain seeks patterns and rules. In fact, it takes it one step further: If it finds no familiar patterns, it simply invents some.

No matter how much you have already invested, only your assessment of the future costs and benefits counts.

If you ever find yourself in a tight, unanimous group, you must speak your mind, even if your team does not like it.

Do you want to influence the behaviour of people or organisations? You could always preach about values and visions, or you could appeal to reason. But in nearly every case, incentives work better. These need not be monetary; anything is useable, from good grades to Nobel Prizes to special treatment in the afterlife.

The Pope asked Michelangelo: ‘Tell me the secret of your genius. How have you created the statue of David, the masterpiece of all masterpieces?’ Michelangelo’s answer: ‘It’s simple. I removed everything that is not David.

Should you ever be sent to war, and you don’t agree with its goals, desert.

18 NEVER PAY YOUR LAWYER BY THE HOUR Incentive Super-Response Tendency To control a rat infestation, French colonial rulers in Hanoi in the nineteenth century passed a law: for every dead rat handed in to the authorities, the catcher would receive a reward. Yes, many rats were destroyed, but many were also bred specially for this purpose. In 1947, when the Dead Sea scrolls were discovered, archaeologists set a finder’s fee for each new parchment. Instead of lots of extra scrolls being found, they were simply torn apart to increase the reward. Similarly, in China in the nineteenth century, an incentive was offered for finding dinosaur bones. Farmers located a few on their land, broke them into pieces and cashed in. Modern incentives are no better: company boards promise bonuses for achieved targets. And what happens? Managers invest more energy in trying to lower the targets than in growing the business. These are examples of the incentive super-response tendency. Credited to Charlie Munger, this titanic name describes a rather trivial observation: people respond to incentives by doing what is in their best interests. What is noteworthy is, first, how quickly and radically people’s behaviour changes when incentives come into play or are altered and, second, the fact that people respond to the incentives themselves and not the grander intentions behind them.

Verbal expression is the mirror of the mind. Clear thoughts become clear statements, whereas ambiguous ideas transform into vacant ramblings.

In conclusion: when it comes to pattern recognition, we are oversensitive. Regain your scepticism. If you think you have discovered a pattern, first consider it pure chance. If it seems too good to be true, find a mathematician and have the data tested statistically. And if the crispy parts of your pancake start to look a lot like Jesus’ face, ask yourself: if he really wants to reveal himself, why doesn’t he do it in Times Square or on CNN?

Excel spreadsheets might as well be one of the most dangerous recent inventions.

We are obsessed with having as many irons as possible in the fire, ruling nothing out and being open to everything. However, this can easily destroy success. We must learn to close doors.

In psychology, this phenomenon is called reactance: when we are deprived of an option, we suddenly deem it more attractive. It is a kind of act of defiance. It is also known as the Romeo and Juliet effect: because the love between the tragic Shakespearean teenagers is forbidden, it knows no bounds.