The Art of Thinking Clearly

In conclusion: When it comes to pattern recognition, we are oversensitive. Regain your skepticism. If you think you have discovered a pattern, first consider it pure chance. If it seems too good to be true, find a mathematician and have the data tested statistically.

From our own life stories to global events, we shape everything into meaningful stories.

He has studied the phenomenon of reciprocity and has established that people have extreme difficulty being in another person’s debt.

contrast effect: We judge something to be beautiful, expensive, or large if we have something ugly, cheap, or small in front of us. We have difficulty with absolute judgments.

Warren Buffett knows: “What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.”

Whenever you are about to make a decision, think about which authority figures might be exerting an influence on your reasoning. And when you encounter one in the flesh, do your best to challenge him or her.

The availability bias says this: We create a picture of the world using the examples that most easily come to mind. This is idiotic, of course, because in reality, things don’t happen more frequently just because we can conceive of them more easily.

A product that has been reduced from $100 to $70 seems a better value than a product that has always cost $70. The starting price should play no role.

Survivorship bias means this: People systematically overestimate their chances of success. Guard against it by frequently visiting the graves of once-promising projects, investments, and careers. It is a sad walk but one that should clear your mind.