Why do we think, feel, and act the way we do.
A long thread from the ideas of investing great Charlie Munger! Investing has amazing parallels in life decision making!
Don't forget to bookmark/RT this!
A long thread from the ideas of investing great Charlie Munger! Investing has amazing parallels in life decision making!
Don't forget to bookmark/RT this!
1. Reward/Punishment Superresponse Tendency:
We are wired to strongly react to incentives and disincentives. Think about how bonuses motivate us at work or how the fear of a traffic challan slows us down. It's a basic part of human nature, guiding much of what we do.
We are wired to strongly react to incentives and disincentives. Think about how bonuses motivate us at work or how the fear of a traffic challan slows us down. It's a basic part of human nature, guiding much of what we do.
This tendency can be both a strength and a weakness. It helps us set goals and avoid dangers, but it can also lead to short-sighted decisions if we focus only on immediate rewards or punishments, ignoring long-term consequences.
2. Liking/Loving Tendency:
Ever wondered why you might favour a product just because a friend recommended it? It's because we are naturally biased towards things and people we like. This bias can color our judgments, often subconsciously.
Ever wondered why you might favour a product just because a friend recommended it? It's because we are naturally biased towards things and people we like. This bias can color our judgments, often subconsciously.
While this tendency can bring us joy and a sense of community, it can also blind us to flaws. It's why we might overlook the shortcomings of a loved one or stay loyal to a brand despite better alternatives.
3. Disliking/Hating Tendency:
Just as we're drawn to what we like, we're repelled by what we dislike. This can range from avoiding a food we hate to disagreeing with someone just because they represent a group we're not fond of.
Just as we're drawn to what we like, we're repelled by what we dislike. This can range from avoiding a food we hate to disagreeing with someone just because they represent a group we're not fond of.
This tendency can create barriers and lead to conflict. It's important to recognize it and try to understand the root of our dislikes. Sometimes, we might find our negative feelings are based on misunderstandings or incomplete information.
4. Doubt-Avoidance Tendency:
Nobody likes uncertainty. It's uncomfortable. This tendency pushes us to make decisions quickly to avoid the feeling of doubt, sometimes even when waiting for more information might be wiser.
Nobody likes uncertainty. It's uncomfortable. This tendency pushes us to make decisions quickly to avoid the feeling of doubt, sometimes even when waiting for more information might be wiser.
It's a survival mechanism, helping us to act fast in critical situations. But in everyday life, it can lead to hasty decisions. Taking a step back and embracing uncertainty can sometimes lead to better outcomes."
5. Inconsistency-Avoidance Tendency:
We strive for consistency in our beliefs and actions. Once we've made up our minds or established a habit, changing course feels uncomfortable, even in the face of new evidence.
We strive for consistency in our beliefs and actions. Once we've made up our minds or established a habit, changing course feels uncomfortable, even in the face of new evidence.
This tendency helps us maintain a stable identity and reliable habits. But it can also prevent us from adapting to new information or perspectives. Being aware of this can encourage us to stay open-minded.
6. Curiosity Tendency:
This is our innate love for new knowledge and experiences. It's what drives us to explore, ask questions, and learn. It's a powerful force that leads to innovation and personal growth.
This is our innate love for new knowledge and experiences. It's what drives us to explore, ask questions, and learn. It's a powerful force that leads to innovation and personal growth.
Curiosity keeps our minds active and engaged. However, it can also lead us down rabbit holes of unproductive information or distraction. Balancing curiosity with focus is key to harnessing its power effectively.
7. Kantian Fairness Tendency:
Named after philosopher Immanuel Kant, this is our inherent desire for fairness. We naturally want to treat others as we would like to be treated and expect the same in return.
Named after philosopher Immanuel Kant, this is our inherent desire for fairness. We naturally want to treat others as we would like to be treated and expect the same in return.
This tendency is fundamental to social harmony and justice. But it can also lead to conflicts when individuals' perceptions of fairness differ.
Understanding and navigating these differences is a part of dealing with this tendency.
Understanding and navigating these differences is a part of dealing with this tendency.
8. Envy/Jealousy Tendency:
It's the uncomfortable feeling we get when someone has something we desire. This can drive us to compete or can lead to resentment and destructive behaviour.
It's the uncomfortable feeling we get when someone has something we desire. This can drive us to compete or can lead to resentment and destructive behaviour.
While a little envy can be a motivator to improve ourselves, excessive envy can blind us to our own strengths and opportunities. Recognizing and managing this emotion is crucial for personal happiness and healthy relationships.
9. Reciprocation Tendency:
Instinct to return favours and kindness.
If someone does something nice, we feel a strong urge to do something nice in return. This tendency underpins much of social interaction & cooperation. But also makes us vulnerable to manipulation by others
Instinct to return favours and kindness.
If someone does something nice, we feel a strong urge to do something nice in return. This tendency underpins much of social interaction & cooperation. But also makes us vulnerable to manipulation by others
10. Influence-from-Mere-Association Tendency:
We are easily influenced by things or people we have a positive association with. This can range from buying products endorsed by celebrities to adopting views of those we admire.
We are easily influenced by things or people we have a positive association with. This can range from buying products endorsed by celebrities to adopting views of those we admire.
While this can guide us to make choices in line with our values, it can also lead to uncritical acceptance of ideas or products. Being aware of this influence can help us make more informed decisions.
11. Simple, Pain-Avoiding Psychological Denial:
This is our tendency to deny the reality of painful or uncomfortable situations. It's like ignoring a debt because we don't want to face financial stress, or avoiding medical check-ups due to fear of bad news.
This is our tendency to deny the reality of painful or uncomfortable situations. It's like ignoring a debt because we don't want to face financial stress, or avoiding medical check-ups due to fear of bad news.
While this can provide short-term relief, in the long run, it often makes problems worse. Recognizing and confronting issues head-on, although challenging, is usually the healthier and more productive approach.
12. Excessive Self-Regard Tendency:
We often overestimate our abilities and qualities. It's like thinking we're above-average drivers or better at our jobs than we actually might be. It's a natural part of human psychology to view ourselves positively.
We often overestimate our abilities and qualities. It's like thinking we're above-average drivers or better at our jobs than we actually might be. It's a natural part of human psychology to view ourselves positively.
This self-confidence can be motivating but can also lead to overconfidence. Being aware of this tendency helps us stay humble and open to learning and improvement.
13. Overoptimism Tendency:
This is our inclination to be overly hopeful about the future, often underestimating risks and overestimating opportunities. It's like expecting our plans to go off without an issue, ignoring potential hurdles.
This is our inclination to be overly hopeful about the future, often underestimating risks and overestimating opportunities. It's like expecting our plans to go off without an issue, ignoring potential hurdles.
Optimism can be a great asset, driving us forward with hope. But unchecked, it can lead to poor planning and risky decisions. Balancing optimism with realism is key.
14. Deprival-Superreaction Tendency:
We react strongly when we're deprived of something we already possess or think we deserve. It's like feeling a sense of injustice when a promised promotion is taken away, even if we haven't received it yet.
We react strongly when we're deprived of something we already possess or think we deserve. It's like feeling a sense of injustice when a promised promotion is taken away, even if we haven't received it yet.
This tendency can make us act irrationally to avoid loss, sometimes even at greater costs.
Recognizing this can help us make more balanced decisions, weighing losses against potential gains more rationally.
Recognizing this can help us make more balanced decisions, weighing losses against potential gains more rationally.
15. Social-Proof Tendency:
This is our habit of looking to others for cues on how to think and act, especially in uncertain situations. It's like laughing at a joke because everyone else is, even if we don't find it funny.
This is our habit of looking to others for cues on how to think and act, especially in uncertain situations. It's like laughing at a joke because everyone else is, even if we don't find it funny.
While social proof can help us make quick decisions and fit in with groups, it can also lead us astray, following the crowd without critical thinking.
Being aware of this can encourage us to trust our own judgment more.
Being aware of this can encourage us to trust our own judgment more.
16. Contrast-Misreaction Tendency:
This is about how we perceive things differently depending on what they're compared with. Like thinking a cup of coffee is cheap at a fancy restaurant but expensive at some other place, even if the price is the same.
This is about how we perceive things differently depending on what they're compared with. Like thinking a cup of coffee is cheap at a fancy restaurant but expensive at some other place, even if the price is the same.
Our judgments can be easily skewed by context and comparisons. Being aware of this helps us make more objective decisions, focusing on the actual value rather than just the contrast.
17. Stress-Influence Tendency:
Under stress, our thinking and decision-making can change dramatically. It's like saying things we wouldn't normally say in an argument because we're upset.
Under stress, our thinking and decision-making can change dramatically. It's like saying things we wouldn't normally say in an argument because we're upset.
Recognizing how stress affects us can help in managing our responses. Learning to pause and breathe before reacting can prevent regrettable decisions and maintain clarity of thought.
18. Availability-Misweighing Tendency:
We give undue weight to information that's readily available or recent. It's like thinking plane crashes are common because they're frequently in the news, despite being statistically rare.
We give undue weight to information that's readily available or recent. It's like thinking plane crashes are common because they're frequently in the news, despite being statistically rare.
Being aware of this tendency can help us seek out more balanced information and not just rely on what's most recent or memorable in making decisions.
19. Use-It-or-Lose-It Tendency:
Our skills and knowledge can deteriorate if we don't regularly use them. It's like getting rusty with a musical instrument if we don't practice regularly.This emphasizes the importance of continual learning and practice.
Our skills and knowledge can deteriorate if we don't regularly use them. It's like getting rusty with a musical instrument if we don't practice regularly.This emphasizes the importance of continual learning and practice.
20. Drug-Misinfluence Tendency:
Substances like alcohol or drugs can significantly impair our judgment and decision-making capabilities. It's not just about the physical effects but how these substances can cloud our thinking. Keep away from them!
Substances like alcohol or drugs can significantly impair our judgment and decision-making capabilities. It's not just about the physical effects but how these substances can cloud our thinking. Keep away from them!
21. Senescence-Misinfluence Tendency:
As we age, our physical and mental abilities change. This natural aging process can influence how we think, learn, and react.Understanding this tendency can foster patience and empathy, both with ourselves and others as we navigate age
As we age, our physical and mental abilities change. This natural aging process can influence how we think, learn, and react.Understanding this tendency can foster patience and empathy, both with ourselves and others as we navigate age
22. Authority-Misinfluence Tendency:
We have a natural inclination to follow and respect authority figures, sometimes without questioning. It's like taking a doctor's advice without considering second opinions.
We have a natural inclination to follow and respect authority figures, sometimes without questioning. It's like taking a doctor's advice without considering second opinions.
While respecting authority is often beneficial, it's also important to maintain a healthy skepticism and independent thinking. Not all authority is infallible.
23. Twaddle Tendency:
This is our tendency to speak without saying much of substance – essentially, babbling. It's like engaging in small talk that's more about filling silence than exchanging meaningful information.
This is our tendency to speak without saying much of substance – essentially, babbling. It's like engaging in small talk that's more about filling silence than exchanging meaningful information.
Being conscious of this can enhance the quality of our conversations and communication, focusing more on meaningful dialogue and less on just speaking for the sake of it.
24. Reason-Respecting Tendency:
We have a natural desire for explanations and reasons. It's why we ask 'why' when given instructions or advice, seeking understanding beyond just the directive itself.
We have a natural desire for explanations and reasons. It's why we ask 'why' when given instructions or advice, seeking understanding beyond just the directive itself.
This tendency can lead to greater comprehension and buy-in, but it can also be manipulated with false or misleading 'reasons'. Critical thinking is key to discerning valid reasons from mere rationalizations.
25. Lollapalooza Tendency:
This is the culmination of multiple tendencies acting together, often leading to extreme outcomes. It's like a crowd getting swept up in collective enthusiasm at a concert, far beyond what any individual might feel alone.
This is the culmination of multiple tendencies acting together, often leading to extreme outcomes. It's like a crowd getting swept up in collective enthusiasm at a concert, far beyond what any individual might feel alone.
The Lollapalooza effect shows how combinations of tendencies can amplify actions and reactions. Understanding this can help us see how complex behaviours and events are often the result of multiple psychological forces at play.
This concludes the exploration of Charlie Munger's 25 Psychological Tendencies. Understanding these can offer insights into our behaviors and decisions, helping us navigate life with more awareness and wisdom.
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