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If you want to know about the properties of elements then you should read the periodic
table. If you want to know about the solvency of a company then you should look at its
balance sheet. What if we want to learn about our own irrationality? Without any doubt I
would read Mungers psychology of human misjudgment. I came across this gem three
years back. Every time I read this, I learn something new about my irrationality. Guy
Spier is a Zurich based investor and author of a book entitled The Education of a Value
Investor. In a recent interview he told about the value he got out of Mungers
psychology of human misjudgment.
For 18 months, Mr. Spier listened to nothing in his car but a lecture on
human misjudgment by Charles Munger, Mr. Buffetts vice chairman at
Berkshire Hathaway. Of the two dozen mental mistakes cited by Mr. Munger,
I realized I was guilty of all of them, No wonder he has sought, as he says in
his book, to banish the false assumption that I am truly capable of rational
thought. Once he accepted just how flawed my brain really is, he writes, I could
design an array of practical work
arounds based on my awareness of the minefield
within my mind. To escape what he calls the New York vortex of bad influences
such as envy, greed and hyperactive trading, Mr. Spier moved his fund to Zurich
in 2008.
Its very important to use Mungers teachings on a daily basis. Knowledge without
application is useless; use-it-or-lose-it. To use it on a daily basis we need to make it
second nature. There are 24 standard causes of human misjudgment. How do we
remember all of them? Is there a better way? Few days back I read about a technique
called as mind mapping. Using this technique we can organize information visually so
that we can recall them easily when needed.
http://janav.wordpress.com/2014/11/03/mungers-psychology-mindmapped/
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For the last few days I have been mind mapping Mungers psychology of human
misjudgment. In this post I am sharing them with you. Few things to note before you
look at the mind maps (1) In order to understand the mind maps you should have read
Mungers psychology of human misjudgment several times (2) Click on the mind
map (3) Enlarge the mind map to view it clearly (4) Read them in the clockwise direction
(5) Repeat several times.
Incentives
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Psychological Denial
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Pavlovian Association
Reciprocation
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Social Proof
Contrast Effects
Authority
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Mis-gambling Compulsion
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Liking
Why?
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Other Biases
Lollapalooza Effects
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Andrs
Jana Vembunarayanan
November 4, 2014 at 1:22 pm
http://janav.wordpress.com/2014/11/03/mungers-psychology-mindmapped/
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Prashanth Jnanendra
Amazing, Jana!
Reply
Jana Vembunarayanan
November 4, 2014 at 1:22 pm
Thanks Prashanth.
Regards,
Jana
Reply
krishkeya
Jana Vembunarayanan
November 4, 2014 at 1:22 pm
http://janav.wordpress.com/2014/11/03/mungers-psychology-mindmapped/
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Thanks Krish.
Regards,
Jana
Reply
barathmukhi
Hi Jana,
Have you read that Mind Maps book? Is it good?
Regards,
Barath.
Reply
Jana Vembunarayanan
November 4, 2014 at 1:20 pm
Barath,
Yes I did and its a decent book to get you started with mind
maps.
Regards,
Jana
Reply
chakshura
10/14
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Jana Vembunarayanan
November 5, 2014 at 2:48 pm
zayanabdulshukoor
Akshay
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11/7/2014
Jana Vembunarayanan
November 5, 2014 at 2:48 pm
Akshay,
Thanks for your generous comments.
Regards,
Jana
Reply
mayurdabbu
Jana Vembunarayanan
November 5, 2014 at 10:01 pm
Mayur,
Thanks. I am using http://www.xmind.net
Regards,
Jana
Reply
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