Charlie Munger 25 Cognitive Biases Compress 230620 020024
Charlie Munger 25 Cognitive Biases Compress 230620 020024
Charlie Munger 25 Cognitive Biases Compress 230620 020024
1. Authority- Following orders just because someone 12. Influence- We can be easily manipulated by mere mere
Misinfluence says so. From-Mere- association. It can be a group of people, the
Tendency Associati on quality of a prod
product,
uct, advertising
advertising,, etc.
Tendency
2. Availability- We overweigh
overweightt what's eas ily availa ble. A
Misweighing checklist or set of rules can help with this 13. Kantian Life isn't fair, but many can't accept this.
Tendency tendency. Fairness Tolerating a little unfairness should be okay
Tendency if it means a greater fairness for all. The
3. Contrast- Our problem
problem here is a misunder
misunderstanding
standing
example Munger uses uses is lett
letting
ing in other
Misreaction of comparisons and missing out on the drivers on the freeway knowing they will
Tendency magnitude of decisions. This gets to
reciprocate in the future.
Phillip Fisher's point when he once s aid,
"the stock market is filled with individ
in dividuals
uals 14. Liking/Loving We ignore the faults
faults of other people,
people,
who know
kn ow the price of everyt
everything
hing but the Tendency products
products or companies that we admire.
value of nothing
nothing ." Evaluate
Evaluate people
people and
15. Lollapalooza To get extreme
extreme consequences when
wh en you
objects by themselves
themselves and not
no t by their
Effect/Tedency combine a number of these misjudgements
contrast.
when trying for a particular
particular outcome.
outcome.
4. Curiosity There is not enough curiosity to learn,
16. Over- Greed.
Tendency even though you receive so many benefits
Optimism
from a continuous learning process.
Tendency
Munger says, "the curious are also
provided
provided with much fun and
an d wisdom
wis dom once 17. Reason- Some people
people just want the answers,
ans wers, not
n ot the
formal education
education h as ended
ended."
." Respecting reasons or a better understanding.
understanding.