Michael Mauboussin — How Great Investors Make Decisions, Harnessing The Wisdom (vs. Madness) of Crowds, Lessons from Race Horses, and More (#659) - The Blog of Author Tim Ferriss

When writing The Intelligence Trap, I’ve restricted myself to three particular questions. Why do smart people act stupidly? What skills and dispositions are they missing that can explain these mistakes? And how can we cultivate those qualities to protect us from those errors?

What’s surprising about these results is that we typically celebrate great entrepreneurs and leaders for being strong-minded and clear-sighted. They’re supposed to be paragons of conviction: decisive and certain. Yet evidence reveals that when business executives compete in tournaments to price products,19 the best strategists are actually slow and

Venture  can be  a pattern recognition job, but having rules that are too firm can also result in catastrophic errors

It’s called Hare Brain, Tortoise Mind. It’s a book that addresses a danger that has been developing in our society for several years. This danger is based on three separate wrong beliefs. The first is the belief that being decisive means taking decisions quickly. The second is the belief that fast is always better. The third is the belief that we s

10 Crowds tend to make accurate predictions when three conditions prevail—diversity, aggregation, and incentives. Diversity is about people having different ideas and different views of things. Aggregation means you can bring the group’s information together. Incentives are rewards for being right and penalties for being wrong that are often, but n