Given at Stanford Law School on 19th Apr 1996

Ideology will distort thinking where reality disagrees with the ideas

being totally sure on issues like that with a strong, violent ideology, in my opinion, turns you into a lousy thinker

what I'm against is being very confident and feeling that you know, for sure, that your particular intervention will do more good than hard, given that you're dealing with highly complex systems wherein everything is interacting with everything else

even highly credentialed experts can be extremely biased by ideology and we must have the confidence to challenge that type of thinking regardless of the source.

Extreme ideology leads to poor thinking.

Believing what one wishes to be true is a deep, pervasive psychological tendency that is underemphasized in academia, partly because of the ethical issues of experimenting on stress.

the mind will sometimes flip so that the wish becomes the belief

  • Once you establish models, put them in to a form that is usable like a checklist to analyze complex situations. Use checklist routines.
  • Story of Captain Cook using psychology to persuade his crew to eat the sauerkraut by first making it exclusive to the officers

morality and psychology are deeply connected

  • Consider that a large portion of people will steal if a) it's easy and b) it's low risk. Consider also the consistency principle which tends to make stealing habitual. It follows that, if you run a business that makes stealing easy, you are perpetrating a moral injustice against the employees.
  • consider workers compensation for stress in California. Although the stress is real, the solution is impossible to police. It encourages crooked lawyers, doctors, unions, etc. Overall, it would be better to let some things go uncompensated – to let life be hard.

It's very hard to stop slop and moral failure if you let it run for a while

  • in investing, always look for an insight that gives big statistical advantage

we don't leap seven-foot fences. Instead, we look for one-foot fences with big rewards on the other side

  • basically it requires a mis-priced opportunity that we're smart enough to recognize
  • Be willing to say "I don't know". People that always have an answer will generate confusion because of an unwillingness to admit ignorance
  • Try to teach people in a way the requires a mental leap of their own to reach the conclusion or reach full understanding.

to the extent you become a person who thinks correctly, you can add great value. to the extend you've learned it so well that you have enough confidence to intervene where it takes a little courage, you can add great value.

  • always appeal to one's interests when hoping to persuade them of something. Avoid making them defensive. <<< if you would persuade, appeal to interst, not to reason <<<
  • some regulation is necessary, some is foolish. This is how it always is and always will be.
  • civilization works better with certain expectations with zero interpretation; like the example of a Navy Captain grounding a ship
  • approach thinks step by step, with curious persistence and you will be amazed at the progress
  • rely on the best minds of every subject; don't be obtuse and think you can think it all up yourself