Notes - the Best Wisdom from the Farnham street blog

 Make Fewer Mistakes

Decision-making. https://fs.blog/smart-decisions/ Wisdom makes fewer mistakes. Intelligence is domain-specific, matching the right tool to the right decision.

5 main ways to be stupid. Ignorance of one’s stupidity is foolishness. 

1. unmindfulness, 

2. poor information, 

3. poor understanding of the information, 

4. poor character, 

5. pride.

Experience does not equal wisdom. We make the same mistakes in different domains:

1. Negligent of decision and result

2. Inobservant

3. Non falsifable process of deciding

4. Emotional silly reactions instead of calm reflection

5. Deny outcomes.

Specialised expert decision making means average or poor in most other areas. Wisdom says “I don’t know” in most areas. Knowledge is hard and results in competence; wisdom is very hard and results in expertise. Wisdom = reflect, pray, share, act, and serve.

Experience is a stupid process. Wisdom is a wise process of understanding how we learn. Step 2 open-mindedness concludes with step 6 admission. Even then we really don’t have the lesson until we are practicing the solution in step 7, then applying it to relationships in steps 8-12. We learn wisdom through reflecting, prayer, sharing, action, and service, then.

Wisdom is knowing how the world and the mind causes suffering. Desire is suffering. What you desire, you suffer for. Wisdom willingly suffers for the sake of a worthwhile desire.

Wisdom is knowledge about decision making over all time, all areas, and all people. What is it always like for humans everywhere? 

Wise decisions take attention, awareness, effort, energy, clarity, freshness, and care. Two thirds of most peoples’ decisions are foolish.

The Four Foolish Decisions:

1. what to eat, 

2. how to tend to the body, dress/clean/exercise -

3. how to avoid feeling bad - emotional management

4. how to experience love and sex. 

If you can automate these four decisions then you free up two-thirds of your attention for wisdom.

Galilean relativity: groundlessness and the value of minority reports.

In relation to results, are you really achieving what you think you are? Is the right ladder on the wrong wall? 

Since everything is constantly in motion, each perspective changes over time into something unknown. There’s no solid theory of becoming like Hegel says. It’s GROUNDLESS.

We have no solid position to stand on. Groundlessness. 

Unless we triangulate our position, we cannot see this: minority report. Ask, how would my enemy see this decision? The Fool or court jester perspective.

Doubt everything. Suspend presupposition. Open your mind.

If you do not admit groundlessness then you become a stranger to yourself, an alien to your own perspective, gripping ground that no longer exists.

Inversion. TURN UPSIDE DOWN.

“man muss immer umkehren” Jacobi. Munger: the nature of things is hard forwards, but simple backwards; problems aren’t solvable via HOW, only by WHO. Don’t foster Solution, foster avoiding non-solution. 

Via negativa, insurance, avoid foolishness instead of seek wisdom, minimise downside, support the solution instead of fighting the problem, power not force; 

I want to achieve goal Y, NO: I seek to remove all the blocks to Y occurring, YES; 

A good life avoids misery, suffering, and pain NO; a good life embraces a single source of suffering for the sake of a worthwhile desire YES. 

Falsification: is the explanation creative, simple, invariable, and broadly applicable? Speculation, not induction. Falsificationary inversion seeks speculative explanations.

Testability: what would you want to avoid in a viable solution? If X-goal were true what else would also have to be true? What would have to be false?

Not “how can we profit from investment” but “how can we minimise loss.” 

Inverted Goals: don’t try to be an A student, try to avoid getting an E. 

Inversion is innovative because it focuses on what can really be effected, not on ideals. 

Force field theory: what stops the change? 

Statistical inversion: what information causes the problems. Not “how do we fix the problem” but “how do we reduce or eliminate the problem from arising.” 

Sun Tzu: don’t defeat the enemy, reduce and break his will to fight. 

Having opinions NO; having doubts YES. Rapidly destroying cherished opinions YES. The work of having a real opinion causes learning transfer alone. Regurgitating opinions means you can’t apply things. State the opinions of the other side better than they can, to merit an opinion. Real knowledge comes from doing the work to falsify opinion. True knowledge admits “I don’t know” and avoids bombast and snark. 

Elon Musk: tell me about the problems you solved. If they really solved it, they will be able to show how they struggled and iterated with the problem. Real knowledge struggles, suffers, iterates down to brass tacks. 

Second-order decisions. 

Work through ignorance diligently. 

Write down your second thought and ask 

“And then what?”

“And in 10 years time…?” 

Write four columns and put the 1OT in the farthest, then 2OT and then reflect on the 3OT; put the decision up on the wall.

Use other men’s eyes. How would Napoleon see this, Hitler, Alexander, Caesar? 

 

Notes on Third-Order Thinking:

IN A NUTSHELL: Your first impulse is your biases. Your second impulse is your ignorance. Only your third impulse is not foolish.

The Third Impulse:

- thinks in terms of systems, interactions, and time.

- doesn't change a thing until it knows why it is there in the first place, who it benefits, and how it came to be there.

- if something seems pointless then assumes it doesn't understand it yet.

- asks "What positive purpose does this bad habit or negative situation serve?"

 

Quotes on Third Order Thinking:

"Never seize on the first available option, no matter how good it seems, before you’ve asked questions and explored.” - Ray Dalio.

“Before I built a wall I’d ask to know/ What I was walling in or walling out,/ And to whom I was like to give offence.” - Robert Frost, “Mending Wall”

 

Simple decision making.

Solve the no brainer simple bits first. It’s stupid to work on hard problems with uncertain return; it’s smart to work on simple problems with likely return. Go where there’s unfair advantage and dumb competition.

Aptitudes predict competency circle.

Numbers not words are the language of reality. The maths of elementary probability in decisions tree algebra, specifically. 

Filter stupidity by inverting

The basic elementary academic wisdom in every discipline is best and most practical.

Lollapalooza Effect: social contaigion is more powerful than we can imagine.

PRIME ALGORITHM: Repeat what works. Figure what doesn’t work and do the opposite. 

Opportunity cost: measure the cost of everything against the best thing you can find. What is the return on investment RELATIVE to the best alternative?

Invert competence and confidence: what is my level of incompetence and unconfidence out of 10, and how can I minimize and account around that? I’m not competent/genius enough to win tennis or chess, but where IS my incompetence limited?

The circle of competence is the margin of safety. 

How would I start off the LEAST competitive person in this field, then DON’T DO THAT.

Don’t look for success; figure out how to avoid failure by obstacle identification.

Steering or piloting as metaphor: know everything about the road, how to handle multiple hazards simultaneously, how to abgebaize the problem forwards and backwards, worst hazards get most training, always use checklists, schedule skill upgrade on rare hazards. 

MUNGER CHECKLISTS MEGA COMPENDIUM https://moneyarchive.wordpress.com/category/the-charlie-munger-checklists/

Feynman heuristics: 

use the simple heuristic that works the best. Put an asterix beside each trick that works most effectively most of the time. Five asterix tricks are best.

Private statement: inversion: it’s not what you read or view but what you decline to read and view. It’s not what you decline but what you form a heuristic for future y/n. It’s not what is said that’s relevant but what I can do with it that matters. Relevance itself is irrelevant: what is relevant is what I can do right now not what is informative or interesting.