seekrit squirrel
Stuff => Thoughts and Ideas => Topic started by: galumay on August 30, 2016, 08:29:40 PM
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If you completely ignored your goals and focused only on your system, would you still get results?
1. Goals reduce your current happiness.
When you’re working toward a goal, you are essentially saying, “I’m not good enough yet, but I will be when I reach my goal.”
The problem with this mindset is that you’re teaching yourself to always put happiness and success off until the next milestone is achieved. “Once I reach my goal, then I’ll be happy. Once I achieve my goal, then I’ll be successful.”
SOLUTION: Commit to a process, not a goal.
2. Goals are strangely at odds with long-term progress.
You might think your goal will keep you motivated over the long-term, but that’s not always true.
Consider someone training for a half-marathon. Many people will work hard for months, but as soon as they finish the race, they stop training. Their goal was to finish the half-marathon and now that they have completed it, that goal is no longer there to motivate them. When all of your hard work is focused on a particular goal, what is left to push you forward after you achieve it?
This can create a type of “yo-yo effect” where people go back and forth from working on a goal to not working on one. This type of cycle makes it difficult to build upon your progress for the long-term.
SOLUTION: Release the need for immediate results.
ref - http://jamesclear.com/goals-systems
There is little evidence that a full moon actually impacts our behaviors. A complete analysis of more than 30 peer-reviewed studies found no correlation between a full moon and hospital admissions, casino payouts, suicides, traffic accidents, crime rates, and many other common events.
But here’s the interesting thing: Even though the research says otherwise, a 2005 study revealed that 7 out of 10 nurses still believed that “a full moon led to more chaos and patients that night.”
What’s going on here?
The nurses who swear that a full moon causes strange behavior aren’t stupid. They are simply falling victim to a common mental error that plagues all of us. Psychologists refer to this little brain mistake as an “illusory correlation.”
Delayed Gratification
http://jamesclear.com/delayed-gratification
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Some of Buffett's thoughts,
“Our ideas are so simple that people keep asking us for mysteries when all we have are the most elementary ideas…There’s nothing remarkable about it. I don’t have any wonderful insights that other people don’t have. Just slightly more consistently than others, I’ve avoided idiocy…It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” – Munger
“It really is simple – just avoid doing the dumb things. Avoiding the dumb things is the most important.” – Buffett
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..... Sometimes you don't change
people's opinions by showering them with logic. In Jonathan Swift's words:
"You cannot reason a person out of a position he did not reason himself into
in the first place."
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On Activity.
• The 19th Century American writer Henry David Thoreau said: "It is not
enough to be busy; so are the ants. The question is: What are we busy about?"
Don't confuse activity with results. There is no reason to do a good job with
something you shouldn't do in the first place.
• Charles Munger says, "We've got great flexibility and a certain discipline in
terms of not doing some foolish thing just to be active - discipline in avoiding
just doing any damn thing just because you can't stand inactivity."
• What do you want to accomplish? As Warren Buffett says, "There's no use
running if you're on the wrong road.
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Wise men talk because they have something to
say; fools, because they have to say something.
- Plato
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"Worry about the what ares, not the what ifs."
The smartest thing my dad ever said - and he said a lot of smart things!
I would take it a step further, "Work out which category your concerns/issues fall into, then do something about the what ares, and ignore the what ifs."
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Charles Munger gives an illuminating example on the issue of stealing:
A very significant fraction of the people in the world will steal if (A) it's very easy to do
and, (B) there's practically no chance of being caught. And once they start stealing, the
consistency principle will soon combine with operant conditioning to make stealing
habitual. So if you run a business where it's easy to steal because of your methods, you're
working a great moral injury on the people who work for you ...
It's very, very important to create human systems that are hard to cheat. Otherwise you're
ruining your civilization because these big incentives will create incentive-caused bias and
people will rationalize that bad behavior is OK.
Then, if somebody else does it, now you've got at least two psychological principles:
incentive-caused bias plus social proof. Not only that, but you get Serpico effects: If enough
people are profiting in a general social climate of doing wrong, then they'll turn on you
and become dangerous enemies if you try and blow the whistle.
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Follow these three pieces of advice from Charles Munger:
(1) I don't want you to think we have any way oflearning or behaving so you
won't make a lot of mistakes. I'm just saying that you can learn to make fiwer
mistakes than other people - and how to fix your mistakes fosterwhen you do make
them. But there's no way that you can live an adequate life without [making] many
mistakes. In fact, one trick in life is to get so you can handle mistakes. Failure to
handle psychological denial is a common way for people to go broke: You've made
an enormous commitment to something. You've poured effort and money in. And
the more you put in, the more that the whole consistency principle makes you
think, "Now it has to work. IfI put in just a little more, then it'll work."
And deprival super-reaction syndrome also comes in: You're going to lose the
whole thing if you don't put in a little more. People go broke that way - because
they can't stop, rethink and say, "I can afford to write this one off and live to fight
again.
I don't have to pursue this thing as an obsession - in a way that will break me." Part ofwhat you must learn is how to handle mistakes and new facts that change the odds. Life, in part, is like a poker game, wherein you have to learn to quit sometimes when holding a much-loved hand.
(2) I've gotten so that I now use a kind of two-track analysis. First, what are the factors that really govern the interests involved, rationally considered? And second, what are the subconscious influences where the brain at a subconscious level is automatically doing these things - which by and large are useful, but which often misfunction. One approach is rationality - the way you'd work out a bridge problem: by evaluating the real interests, the real probabilities and so forth. And the other is to evaluate the psychological factors that cause subconscious conclusions - many ofwhich are wrong.
(3) Take all the main models from psychology and use them as a checklist in reviewing outcomes in complex systems. No pilot takes off without going through his checklist: A, B, C, D ... And no bridge player who needs two extra tricks plays a hand without going down his checklist and figuring out how to do it...And, to repeat for emphasis, you have to pay special attention to combinatorial effects that create lollapalooza consequences.
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"Look a t where the bullet holes are a n d p u t extra armor every place else. "
During World War II, the statistician Abraham Wald tried to determine where one should add extra armor to airplanes. Based on the patterns ofbullet holes in returning airplanes, he suggested that the parts not hit should be protected with extra armor. How could he reach that conclusion? Because he also considered planes that didn't return. Assume that all planes had been hit more or less uniformly. Some planes hit in marked areas were still able to return. This means that planes that didn't return were most likely hit somewhere else - in unmarked places. These were the areas that needed more armor.
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At a press conference in 2001, when Warren Buffett was asked how he evaluated new business ideas, he said he used 4 criteria as filters.
- Can I understand it? If it passes this filter,
- Does it look like it has some kind ofsustainable competitive advantage? If it
passes this filter,
- Is the management composed of able and honest people? If it passes this filter,
- Is the price right? If it passes this filter, then we write a check
What does Warren Buffett mean by "understanding?" Predictability: "Our definition of understanding is thinking that we have a reasonable probability of being able to assess where the business will be in 10 years."
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Marcus Porcius Cato wrote: "Wise men profit more from fools than fools from wise men; for the wise men shun the mistakes ofthe fools, but fools do not imitate the successes of the wise."
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Buffett: Some businesses are a lot easier to understand than others. And Charlie and I don't like difficult problems. Ifsomething is difficult to figure... We'd rather multiply by 3 than by n.
Munger: That's such an obvious point. Yet so many people think that if they just hire somebody with the appropriate labels, they can do something very difficult. That is one of the most dangerous ideas a human being can have. All kinds of things can create problems by causing complexity. The other day I was dealing with a problem - it was a new building. And I said, "This problem has three things I've learned to fear - an architect, a contractor and a hill." Ifyou go through life like that, I think you'll at least makefewer mistakes than people who think they can do anything, no matter how complex, by just hiring somebody with a credible label. You don't have to hire out your thinking ifyou keep it simple...
Buffett: Ifyou get into some complicated business, you can get a report that's 1,000 pages thick and you can have Ph.D.'s working on it. But it doesn't mean anything. What you'll have is a report. But you won't have any better understanding of that business and what it's going to look like in 10 or 15 years. The big thing to do is to avoid being wrong.
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“Since Auschwitz we know what man is capable of.
And since Hiroshima we know what is at stake.
”
Excerpt From: Viktor E. Frankl, Harold S. Kushner & William J. Winslade. “Man's Search for Meaning.” iBooks. https://itunes.apple.com/us/book/mans-search-for-meaning/id476023633?mt=11
“It is we ourselves who must answer the questions that life asks of us, and to these questions we can respond only by being responsible for our existence.”
Excerpt From: Viktor E. Frankl, Harold S. Kushner & William J. Winslade. “Man's Search for Meaning.” iBooks. https://itunes.apple.com/us/book/mans-search-for-meaning/id476023633?mt=11
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"Passion is actually just taking an interest in something, and then getting good at it"
(Kel Newport, Be So Good they Cant Ignore You.)
Resonates completely with me and coffee!
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This is something I have read before and not bothered to really understand, its a powerful tool for selecting employees or partners!
WARREN BUFFETT’S AND CHARLIE MUNGER’S TOP 7 TIPS FOR THE CLASS OF 2016
John | June 14, 2016 | All Posts, Charlie Munger, Most Popular, Superinvestors, Warren Buffett | 0 Comments
warren buffett and charlie munger tips
1. WORK FOR THE PERSON OR COMPANY YOU ADMIRE THE MOST
Warren Buffett says that he often gets asked the question: “Who should I go to work for when I graduate college?”
“I’ve got a very simple answer… the real thing to do is to get going for some institution or individual that you admire. I mean it’s crazy to take in-between jobs just because they look good on your resume, or because you get a little higher starting pay.
I was up at Harvard a while back, and a very nice young guy, he picked me up at the airport, a Harvard Business School attendee. And he said, ‘Look. I went to undergrad here, and then I worked for X and Y and Z, and now I’ve come here.’ And he said, ‘I thought it would really round out my resume perfectly if I went to work now for a big management consulting firm.’ And I said, ‘Well, is that what you want to do?’ And he said, ‘No,’ but he said, ‘That’s the perfect resume.’ And I said, ‘Well when are you going to start doing what you like?’ And he said, ‘Well I’ll get to that someday.’ And I said, ‘Well you know, your plan sounds to me a lot like saving up sex for your old age. It just doesn’t make a lot of sense.’
I told that same group, I said, ‘Go to work for whomever you admire the most.’ I said, ‘You can’t get a bad result. You’ll jump out of bed in the morning and you’ll be having fun.’ The Dean called me up a couple weeks later. He said, ‘What did you tell those kids? They’re all becoming self-employed.’ So, you’ve got to temper that advice a little bit.”
Why would you want to be around the people you admire most? Here’s a lesson Warren Buffett learned spending part of the first summer after graduating college fulfilling his obligation to the National Guard:
“It’s a very democratic organization. I mean, what you do outside doesn’t mean much. To fit in, all you had to do was be willing to read comic books. About an hour after I got there, I was reading comic books. Everybody else was reading comic books, why shouldn’t I? My vocabulary shrank to about four words, and you can guess what they were.
I learned that it pays to hang around with people better than you are, because you will float upward a little bit. And if you hang around with people that behave worse than you, pretty soon you’ll start sliding down the pole. It just works that way.”
2. COPY THE HABITS OF THE MOST SUCCESSFUL PEOPLE YOU KNOW
Here’s another thought exercise that Warren Buffett had a class of MBA students play: Imagine that you can pick any one of your classmates and you could get 10% of their earnings for the rest of their lives. Who would you pick?
“What goes through your mind in determining which one of those you would pick? You can’t pick the one with the richest father, that doesn’t count. I mean, you’ve got to do this on merit. But, you probably wouldn’t pick the person that gets the highest grades in the class.
I mean, there’s nothing wrong with getting the highest grades in the class, but that isn’t going to be the quality that sets apart a big winner from the rest of the pack… You’ve all got the ability, you wouldn’t be here otherwise. And you’ve all got the energy. I mean, the initiative is here, the intelligence is here throughout the class. But some of you are going to be bigger winners than others.
It gets down to a bunch of qualities that, interestingly enough, are self-made. I mean it’s not how tall you are. It’s not whether you can kick a football 60 yards. It’s not whether you can run the 100 yard dash in 10 seconds. It’s not whether you’re the best looking person in the room… It’s integrity, it’s honesty, it’s generosity, it’s being willing to do more than your share, it’s just all those qualities that are self-selected.“
Now, imagine that you can sell short one of your classmates – you have to pay 10% of what they do. Who would you pick?
“Again, it isn’t the person with the lowest grades or anything of the sort. It’s the person who just doesn’t shape up in the character department.
We look for three things when we hire people. We look for intelligence, we look for initiative or energy, and we look for integrity. And if they don’t have the latter, the first two will kill you, because if you’re going to get someone without integrity, you want them lazy and dumb. I mean, you don’t want a spark of energy out of them. So it’s that third quality. But everything about that quality is your choice.”
Now look at those two people. Wright down the qualities of the person that you’d like to buy 10% of and ask yourself, “Is there anything on that list I couldn’t do?” Buffett says there won’t be. Now look at the person you sell short and look at those qualities that you don’t like. Do you see any of those in yourself that you can’t get rid of? Buffett concludes:
“Ben Franklin did this and my old boss Ben Graham did this at early ages in their young teens, Ben Graham looked around and he said, ‘Who do I admire?’ And he wanted to be admired himself and he said, ‘Why do I admire these other people?’ And he said, ‘If I admire them for these reasons, maybe other people would admire me if I behave in a similar manner.’ And he decided what kind of a person he wanted to be.
And if you follow that, at the end you’ll be the person you want to buy 10% of. I mean that’s the goal in the end, and it’s something that’s achievable by everybody.”
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“If you wish to improve,” Epictetus [first-century Greek philosopher] once said, “be content to appear clueless or stupid in extraneous matters.” One of the most powerful things we can do as a human being in our hyperconnected, 24/7 media world is say: “I don’t know.” Or more provocatively, “I don’t care.” Not about everything, of course – just most things. Because most things don’t matter, and most news stories aren’t worth tracking.
Howard Marks from Oaktree Capital, always worth reading. His Memos are a source of much wisdom, https://www.oaktreecapital.com/insights/howard-marks-memos
A collection of quotes from a recent memo,
We have two classes of forecasters: Those who don’t know – and those who don’t know they don’t know.
– John Kenneth Galbraith
No amount of sophistication is going to allay the fact that all of your knowledge is about the past and all your decisions are about the future.
– Ian Wilson (former GE executive)
Forecasts create the mirage that the future is knowable.
– Peter Bernstein
Forecasts usually tell us more of the forecaster than of the future.
– Warren Buffett
I never think of the future – it comes soon enough.
– Albert Einstein
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Munger talking about biases and how they can be used positively, as in schools of medicine,
Watch one, do one, teach one.
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attached is a transcript from a podcast from Farnam Street founder, Shane Parrish and CEO of AngelList, Naval Ravikant.
It is seriously worth reading, especially his thoughts on education.
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The secret of science is that its propositions, it hyposthesis, its theories are all falsifiable, that is its possible to construct an experiment or observation or collect data to prove it incorrect.
A non scientific belief is a stated belief that is not falsifiable by experiment, observation or collection of data, it could be wrong or it could be right!
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today I had cause to reflect on confirmation bias and how pervasive it is, it came in my work, trying to resolve a conduit blockage between 2 pits where I was trying to pull in an NBN drop fibre.
The obvious path was the 100mm conduit, it had only one telstra fibre cable in it so it was the obvious conduit to pull my drop fibre in through. When I identified the location of the blockage I dug down to try to isolate the cause and hit a 35mm conduit, i couldnt work out what it was and why it was there - i also couldnt find the 100mm conduit so made the assuption that the 100mm had been reduced to 35mm for some reason. In the end I rang a Telecom Tim to come and have a look at the job and he pointed out that there was a 35mm exiting from the pit so the 100mm must be to one side or the other, once we dug around a bit to one side we uncovered the 100mm conduit.
The question he asked that showed how i had been blinded by confirmation bias was "have you tried rodding thru the 35mm conduit" - i hadnt because I was so focussed on the big fat 100mm conduit with just one cable in it that I never considered that I might be able to jump across into the 35mm conduit and get a path through that way. I had already come from the pit with the multiport and into the next pit via the 100mm conduit, so i had confirmed it was the obvious path, and kept trying to use it. It might well have been a simple and quick solution if I had only been able to step back and take a 'wider' look at the options and consider the less favourable, smaller conduit.
As it turned out the 35mm was blocked as well - but without Tim's wider view I would never have even tried that option.
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The Ivy Lee Method: The Daily Routine Experts Recommend for Peak Productivity
By James Clear | Decision Making, Minimalism, Procrastination, Productivity
By 1918, Charles M. Schwab was one of the richest men in the world.
Schwab was the president of the Bethlehem Steel Corporation, the largest shipbuilder and the second-largest steel producer in America at the time. The famous inventor Thomas Edison once referred to Schwab as the “master hustler.” He was constantly seeking an edge over the competition.
One day in 1918, in his quest to increase the efficiency of his team and discover better ways to get things done, Schwab arranged a meeting with a highly-respected productivity consultant named Ivy Lee.
Lee was a successful businessman in his own right and is widely remembered as a pioneer in the field of public relations. As the story goes, Schwab brought Lee into his office and said, “Show me a way to get more things done.”
“Give me 15 minutes with each of your executives,” Lee replied.
“How much will it cost me,” Schwab asked.
“Nothing,” Lee said. “Unless it works. After three months, you can send me a check for whatever you feel it's worth to you.”
The Ivy Lee Method
During his 15 minutes with each executive, Lee explained his simple method for achieving peak productivity:
At the end of each work day, write down the six most important things you need to accomplish tomorrow. Do not write down more than six tasks.
Prioritize those six items in order of their true importance.
When you arrive tomorrow, concentrate only on the first task. Work until the first task is finished before moving on to the second task.
Approach the rest of your list in the same fashion. At the end of the day, move any unfinished items to a new list of six tasks for the following day.
Repeat this process every working day.
The strategy sounded simple, but Schwab and his executive team at Bethlehem Steel gave it a try. After three months, Schwab was so delighted with the progress his company had made that he called Lee into his office and wrote him a check for $25,000.
A $25,000 check written in 1918 is the equivalent of a $400,000 check in 2015.
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***YOU CAN NEVER PROVE SOMETHING IS TRUE, ONLY THAT ITS FALSE****
Think black swans, for thousands of years most humans only knew there were white swans, they could propose a theory that all swans were white but they couldnt prove it.
One sighting of a black swan by english explorers reaching Australia proved the theory false..
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An extension of this idea occoured to me that we teach kids absolute misinformation because of this failure to understand the scientific process.
Consider the example of number sequences, children are often asked in primary school maths to complete the "next 3 numbers" in a number sequence,
eg 1,5,6,11,17...... they are taught that the correct answer is 28, 45, 73. But what they should be taught is we cant know what the next 3 numbers are without knowing the rule that the sequence follows. The rule could be, n + n1, n1 + n2, n2 + n3 etc. and thats what the teachers and the students assume, but what if the rule is actually n<n1, n1<n2, n2<n3 etc ? then the answer could be 18, 19, 20 and still be correct! There will potentially be a rather large variety of rules that might be used and a very large number of correct answers.
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“when you hear hoofbeats, think horses, not zebras.”
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Galilean relativity & Scotland.
https://www.farnamstreetblog.com/2017/05/galilean-relativity-invasion-scotland/
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The best approach in life,
Strong views, weakly held,
That is we need conviction, but be able to recalibrate based on change.
...and..
http://www.collaborativefund.com/blog/the-most-complicated-simple-problems/
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http://latticeworkinvesting.com/2018/04/06/peter-kaufman-on-the-multidisciplinary-approach-to-thinking/
So why is it important to be a multidisciplinary thinker? The answer comes from the Austrian philosopher Ludwig Wittgenstein (link 1, 2, 3) who said, ‘To understand is to know what to do.’ Could there be anything that sounds simpler than that? And yet it’s a genius line, to understand is to know what to do. How many mistakes you make when you understand something? You don’t make any mistakes. Where do mistakes come from? They come from blind spots, a lack of understanding.
Albert Einstein once listed what he said were the five ascending levels of cognitive prowess. So number 5 he said, at the very bottom, was smart. OK. That’s the lowest level of cognitive prowess is being smart. The next level up, level 4, is intelligent. Level 3, next up, is brilliant. Next level up, level 2 he said is genius. What? What’s higher than genius? Number one is simple.
..to quote Albert Einstein again. He said, ‘The most powerful force in the universe is compound interest.’ But that’s not all he said about compound interest. He not only said that it’s the most powerful force in the universe, he said it’s the greatest mathematical discovery of all time. He said it’s the eighth wonder of the world. And he said that those who understand it get paid by it and those who don’t pay for it.
Compounding - Dogged incremental constant progress over a very long time frame.
You have to be constant. How many people do you know that are constant and what they do? I know a couple. Warren Buffett and Charlie Munger. Everybody wants to be rich like Warren Buffett Charlie Munger. I’m telling you how they got rich. They were constant. They were not intermittent.
Here’s your 22 second course in leadership. That’s all it takes. You don’t have to go to business school. You don’t need books. You don’t guest speakers. All you have to do, is take that list that’s in Emily’s head and every single other person in this room, every single other person in the whole world, has this list in their head. Trustworthy, principled, courageous, competent, loyal, kind, understanding, forgiving, unselfish. And in every single one of your interactions with others, be the list! Remember how that puppy went all in? You do this with the other human beings you encounter in life. They’re all going all in and not because it’s your idea. Most people spend all day long trying to get other people like them. They do it wrong. You do this list, you won’t be able to keep the people away. Everybody’s going to want to attach to you. And be willing to do what? Just like them puppy, they’d be willing to die for you. Because you are what they’ve been looking for their whole lives. This is pretty profound isn’t it?
Now I’m going to tell you the strategy that dogs use. The dog’s to be very unhappy with me for telling you this. I’m ratting them out. So when your dog is in the backyard and he goes to the fence between your house and the next house and he talks to the dog next door, I’m going to tell you what he says, no one has ever divulged this before. You’re the first group to hear this. Your dog says to the dog next door, ‘Can you believe how easy it is to manipulate human beings and get them to do whatever you want them to do for you?’ And the dog next door goes, ‘I know it’s a piece of cake.’ And your dog says ‘Yeah. All you have to do is every single time they come home, you greet them at the door with the biggest unconditional show of attention that they’ve ever gotten in their whole life. And you only have to do it for like 15 seconds and then you can go back to doing whatever you were doing before and completely ignore them for the rest of the evening.’
However you do have to do this every single time they come home. And what will the person do? They’ll take care of them. They’ll do anything for this dog. OK?
All you have to do, if you want everything in life from everybody else, is first pay attention, listen to them, show them respect, give them meaning, satisfaction, and fulfillment. Convey to them that they matter to you. And show you love them. But you have to go first. And what are you going to get back. Mirrored reciprocation. Right? See how we tie this all together? The world so damn simple. It’s not complicated at all! Every single person on this planet is looking for the same thing. Now why is that we don’t act on these very simple things?
This is where the wisdom comes. You can walk into the elevator and you can do nothing. And what do you get 98 percent of the time if you walk into an elevator and you do nothing from that stranger in the elevator? Nothing. It’s mirrored reciprocation isn’t it? But what did you have to do? You have to go first. And you’re going to get back whatever you put out there.
So what do you want to do? You want to go positive, you want to go first. What’s the obstacle? There’s a big obstacle. This is an economics club. Certainly you have all heard of Daniel Kahneman, Nobel Prize winner in economics. Behavioral economics. And what did he win his Nobel Prize for? For answering the question, why would people not go positive and not go first when there’s a 98 percent chance you’re going to benefit from it, and only a 2 percent chance the person’s going to tell you to ‘screw off’ and you’re going to feel horrible, lose face, and all the rest of that. And that’s real. That’s why we don’t do it. He said there’s huge asymmetry between the standard human desire for gain and the standard human desire to avoid loss. Which one do you think’s more powerful? 98 percent versus 2!
Be what you want in others, mirrored reciprication, trustworthy, principled, and courageous, and competent, and kind, and loyal, and understanding, and forgiving, and unselfish.
There’s another proverb, it’s a Turkish Proverb. ‘No road is long with good company.’ The essence of life is to surround yourself, as continuously as you can, with good company.
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A good read on thinking from first priciples
https://www.fs.blog/2018/04/first-principles/?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed%3A+68131+%28Farnam+Street%29