Seeking Wisdom – Peter Bevelin

Seeking Wisdom: From Darwin to Munger – by Peter Bevelin
Date read: 3/29/22. Recommendation: 8/10.

A wonderful introduction and summary of ideas from Kahneman, Buffet, Munger, and Taleb, among others. Seeking Wisdom focuses on how our thoughts are influenced, why we make misjudgments, and tools to improve our thinking. Bevelin explains, if we understand what influences us, we can better avoid certain traps and better understand why others act like they do.

See my notes below or Amazon for details and reviews.

My Notes:

Trust:
Your reputation is everything, never make decisions that compromise this because the long-term costs are crippling: “If you once forfeit the confidence of your fellow citizens, you can never regain their respect and esteem.” Abraham Lincoln

“Good character is very efficient. If you can trust people, your system can be way simpler. There’s enormous efficiency in good character and dis-efficiency in bad character.” Charlie Munger

Incentives:
Incentives act as reinforcers: “The iron rule of nature is: you get what you reward for. If you want ants to come, you put sugar on the floor.” Charlie Munger

Skin in the game: “A decision is responsible when the man or group that makes it has to answer for it to those who are directly or indirectly affected by it.” Charles Frankel

“An example of a really responsible system is the system the Romans used when they built an arch. The guy who created the arch stood under it as the scaffolding was removed. It’s like packing your own parachute.” Charlie Munger

Self-deception:
With a scout mindset, reality is your friend: “Refusing to look at unpleasant facts doesn’t make them disappear. Bad news that is true is better than good news that is wrong.” PB

The hardest person to contradict is yourself: “I can’t behave in a way that is inconsistent with my self-image. I have a reputation to uphold. I don’t want to look weak, dumb or lose face. I want to be seen as nice, smart and in control.”

“We associate being wrong with a threat to our self-interest.” PB

Danger of ideologies: “Heavy ideology is one of the most extreme distorters of human cognition….Warren (Buffett) adored his father—who was a wonderful man. Be he was a heavy heavy ideologue (right wing, it happened to be), who hung around with other very heavy ideologues (right wing, naturally). Warren observed this as a kid. And he decided that ideology was dangerous—and that he was going to stay a long way away from it. And he has throughout his whole life. That has enormously helped the accuracy of his cognition.” Charlie Munger

Assume you never invested in this and it was your first time evaluating, would you invest in it today? “The most important thing to do when you find yourself in a hole is to stop digging.” Warren Buffett 

“A very important principle in investing is that you don’t have to make it back the way you lost it. In fact, it’s usually a mistake to try to make it back the way you lost it.” Warren Buffett

“We want people joining us who already are the type that face reality and that basically (not only) tell us the truth, but tell themselves the truth – which is even more important. Once you get an organization that lies to itself – and there are plenty that do – I just think you get into all kinds of problems.” Charlie Munger

Never be above the work:
“Perhaps the most valuable result of all education is the ability to make yourself do the thing you have to do when it ought to be done whether you like it or not.” Thomas Henry Huxley

“The best way to avoid envy is to deserve the success you get.” Aristotle

“What you don’t want yourself, don’t do to others. Reward hostility with justice, and good deeds with good deeds.” Confucius 

“Be happy while you’re living, for you are a long time dead.” Scottish proverb

Social acceptance:
“The deepest principle in human nature is the craving to be appreciated.” William James

If you want to change the game and escape the race that is seeking constant approval or requiring praise to sustain your current efforts, learn to give precedence to internal validation over external. 

Cause and effect:
“Sometimes we mistake an effect for its cause. There is a story about a man that was walking by a river when suddenly a screaming girl floated by. The man jumped in the river and saved her. After five minutes, another screaming girl floated by. He jumped in again and saved the girl. The same thing happened over and over again. The problem was a little further up the river. There was a man throwing girls from a bridge. Out hero solved the symptoms but not the cause of the problem.” PB

“Humans are pattern seeking, storytelling animals. We look for and find patterns in our world and in our lives, then weave narratives around those patterns to bring them to life and give them meaning.” Michael Shermer

“Mysteries are not necessarily miracles.” Goethe

“Uncertainty, in the presence of vivid hopes and fears is painful, but must be endured if we wish to live without the support of comforting fairy tales.” Bertrand Russell 

Patience:
“It’s not that I’m so smart; it’s just that I stay with problems longer.” Albert Einstein

Relaxed state of concentration: “The best thinking is often done when there is no stress, time limit, threats, or judging. Thinking takes time and the simple truths often reveal themselves when we’re doing something else.” PB

Have patience in waiting for opportunities and resist the temptation to always do something: “Buffett’s genius was large a genius of character—of patience, discipline, and rationality…His talent sprang from his unrivaled independence of mind and ability to focus on his work and shut out the world.” Roger Lowenstein

Reversible decisions:
“A decision we make today that will influence our lives ten years from now is far more important than one that will influence us only today. If we make a mistake in choosing the wrong vacation, the consequences over time will most likely be minor. But if, for example, we choose the wrong spouse, the wrong education, career, friends, or investment, it may haunt us a long, long time.” PB

Past predicting the future:
“Study the past if you would divine the future.” Confucius

Backward thinking:
Avoid what causes the opposite of what you want to achieve: “A lot of success in life and success in business comes from knowing what you really want to avoid—like early death and a bad marriage.” Charlie Munger

Inversion: “Instead of asking how we can achieve a goal, we ask the opposite question: What don’t I want to achieve (non-goal)? What causes the non-goal? How can I avoid that? What do I now want to achieve? How can I do that?” PB

Johnny Carson’s prescriptions for guaranteed misery:

  1. Ingesting chemicals in an effort to alter mood or perception

  2. Envy

  3. Resentment

Charlie Munger’s additions to Carson’s prescriptions for guaranteed misery:

  1. Be unreliable

  2. Learn everything you possibly can from your own personal experience, minimizing what you learn vicariously from the good and bad experience of others, living and dead.

  3. Go down and stay down when you get your first, second, or third severe reverse in the battle of life.

Avoid controversies:
“I rejoice that I have avoided controversies, and this I owe to Lyell, who many years ago, in reference to my geological works, strongly advised me near to get entangled in a controversy, as it rarely did any good and causes a miserable loss of time and temper.” Charles Darwin

Front-page test: “Would I be willing to see my action immediately described by an informed and critical reporter on the front page of my local paper, there to be read by my spouse, children and friends?” Warren Buffett

Perspective and expectations:
“Distance has the same effect on the mind as on the eye.” Samuel Johnson

“Blessed is he that expects nothing, for he shall never be disappointed.” Benjamin Franklin

“Whenever you think that some situation or some person is ruining your life, it is actually you who are ruining your life…Feeling like a victim is a perfectly disastrous way to go through life. If you just take the attitude that however bad it is in any way, it’s always your fault and you just fix it as best you can – the so-called ‘iron prescription’ – I think that really works.” Charlie Munger