The following is a collection of 61 ideas I have articulated after reading the book Clear Thinking by Shane Parris. In most cases, the first sentence of each point is a note I took from the author, while the rest of the paragraph consists of my personal reflections or connections of ideas. I started the article with the intention of summarizing the best takes of the author. I ended up mixing all shorts of related ideas from different sources. I hope it is insightful and enjoyable for the few who read it.
The Basis:
1. What we consider to be thinking is in fact reacting without reasoning, prompted by biological instincts that evolved to preserve our species in a completely different environment to the one we have today. Our brain evolved to escape from lions and thrive in small tribes, not to handle the feedback of our colleagues and trade stocks... This is a central point in evolutionary biology and behavioral sciences.
The Power of the Ordinary:
2. It is what happens in ordinary moments that determines your future. Generally speaking, there are two ways to view the world, one in which change happens because of cumulative interactions (what Shane Parris means in this point), and another one in which change happens because of extraordinary moments. In my view the first approach applies more at the individual level, whereas the second one applies more at societal level. Properties change with scale… Someone could argue that Nassim Taleb´s idea of mediocristan and extremistan is closely related to this. In my view there are some caveats but could be interesting to expand in the future.
3. Mastery over ordinary moments is what will make your future easier or harder! A quote from athlete Nick Bare I repeat to myself is "consistently good over occasionally great". This may be just the lesson of the previous point.
4. Being in a good position precedes making a good decision. You do not need to outsmart people if you can out-position them to win. Anyone looks like a genius when they are in a good position, and even the smartest person looks like an idiot when they are in a bad one. The greatest aid to judgment is starting from a good position. While you prepare for something specific, you position for something unspecific.
Our Thinking Errors:
5. We are programmed to defend our territory, and territory is not only physical, it is also psychological (identity, status, work…). An attack to our identity or sense of worth being is equivalent to an attack in the physical form.
6. We have several defaults or semi-automatic behaviors: The emotional default is the reason why investors sell stocks after a downturn because of fear and stress with no analysis. The ego default makes almost impossible for us to change our mind in a discussion even if the facts contradict our initial viewpoint. The social default makes us subconsciously lean towards the social tastes of others. The inertial default is the reason why going against the status quo is often hard despite the evidence to change it. It is only when we have our defaults under control that we can avoid reacting without reasoning, and when we react, it is deliberate and ruthlessly effective.
More on Our Defaults:
7. Things said when reacting emotionally cannot be unsaid, be careful. Try to detach from arguments to avoid falling into the emotional default. One thing I personally do whenever I am (very) angry with somebody: I write what Abraham Lincoln named the "hot unsent letter". In an email / apple note I write everything I feel for that boss / colleague / friend / family member, and I never send it. Once you do that your emotions disappear gradually and you can think, talk and act with more clarity in a rational way.
8. We are prone to be more concerned with the appearance of greatness rather than with actual greatness. Show me a guy who is afraid to look bad, and I will show you a guy you can beat every time. Something I feel (quote taken from Alex Hormozi), is that people are not afraid of falling, they are afraid of what other people will think of them if they fail. I see the world full of people who protect themselves from failing publicly, by ensuring they fail privately.
"Other people's heads are too wretched a place for true happiness to have its seat." - Arthur Schopenhauer
9. One of the most powerful forces behind irrational behavior is long-harbored resentment about social-standing. An attack to the status of a person is equivalent or even more consequential than a physical attack. This even applies to nations - I recently learnt in Will Storr´s book "The Status Game" that 67% of wars since 1600s were motivated by "national standing" or revenge. The second most important factor was national security with only 18%. Lesson: Be careful when hurting people´s status or sense of self worth.
10. Our desire to be right is often lower than our desire to feel right. We unconsciously organize the world in a way we are above others to feel better about ourselves. Some years ago I used to compare myself with others constantly and cherry pick the metrics so that I was always the number one. Something I leant from Robert Greene is to admire human greatness - without extraordinary human beings there would not be progress. Learning to admire and learn from outliers is key for our own development and inner peace. The difficulty lies in the conscious and deliberate effort we need to make until it gets hardwired within us.
11. Inertia is what keeps us in relationships we don´t enjoy, and in jobs we hate. This is because resisting change requires no effort. I guess this is related to the idea of hyperbolic discounting: We only think in terms of the near future, and when you compare the near future pain of a bad situation with the friction required to change that situation, you continue with your current pain. It is only when you compare total future pain and total friction of change without a distorted temporal preference that you will actually make a change.
12. Closely related to the previous idea we have the Zone of Average. This is a dangerous place to be. It refers to situations when things are bad, but not bad enough so that you look for change. The good or bad is not a lineal phenomenon. Sometimes less pain is actually worse if it stops you from changing. E.g., better to be in a terrible relationship rather than in a moderately bad one, because you will exit the first, but may get trapped into the second for all your life. Same applies to jobs, friendships, etc.
Overcoming our Defaults:
13. The best way to improve your default behaviors is not to increase willpower, but to create an intentional environment where your desired behavior becomes your default behavior. For example, if you want to go to the gym more often, you can either improve your willpower, or you can hang out with people whose default behavior is your desired behavior (fit people in this case). Doing the former is playing life on hard mode. Doing the latter is playing life on easy mode.
Building Strength:
14. If your status quo is optimal, inertia will become you unstoppable. Here, the establishment of rituals is key for creating positive inertia. Adhere to a routine that everyday gets you closer to your goals and time will play in your favor. Compounding will make its magic. The main challenge to the stickiness of our rituals is that we tend to overestimate the short term effect of our routines, but underestimate their long term impact. This is Amara´s Law applied to health, knowledge, relationships, professional success, etc. As Naval often says, "Success is not linear".
"Reality rarely gives us the privilege of a satisfying linear positive progression: You may study for a year and learn nothing, then, unless you are disheartened by the empty results and give up, something will come to you in a flash." Nassim Taleb
Building Self-Accountability:
15. On self-accountability and extreme ownership: There is always action you can control, however tiny, that helps you achieve progress. Just because something that happened is out of your control, it doesn´t mean it is out of your responsibility. An example I like: Khabib Nurmagomedov never missed a training session, even if he was injured and couldn´t train, he went to the class and tried to learn something by watching others train. The injury was not his fault, but his reaction to that circumstance was his responsibility.
“Everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances, to choose one’s own way.” Viktor E. Frankl
16. When someone threatens how you see yourself, many times you stop thinking and start reacting. Be aware and think about these moments, past present and future, so that when they arrive, you do not fall into the trap. Progress will be slow and gradual. It sounds good on paper, but it feels counterintuitive when the moment comes.
17. Failing to accept how the world really works puts your time and energy into proving how right you are. You are focused on your ego, not on the outcome. You can´t control everything but you can always control your reactions. Ask yourself if your next (re)action will make the future better or worse. That´s what ultimately matters.
18. The things you choose not to do are as important as the ones you choose to do. This point reminds me of Warren Buffett’s exercise for finding the right thing to work on: Write down your top 20 career goals. Circle the top five on that list. Only work on those five things. The other 15 become your “avoid at all costs” list — they are distractions. Choose your battles. But do it wisely.
Self Knowledge, Confidence and Control:
19. The size of your knowledge is not as important as having a sense of your knowledge´s boundaries. This is basically Charlie Munger and Warren Buffet´s mental model of the circle of competence. History is full of smart people who failed because of a wrong sense of the circle of competence. Self-awareness is always the first step.
20. Many dreams die due to a lack of confidence than then become a lack of competence. This may sound contrary to the previous point - there is often a thin line separating opposing concepts. However, the system of confidence and success follow a virtuous cycle: Success brings confidence and confidence creates success. I guess it is preferable to start with success rather than with confidence. In order to be successful, be successful. Self belief is often overrated, generate evidence first.
21. In order to be right, first you must be willing to change your own mind. As Keynes said, "when facts change, I change my mind. What do you do sir?" However, if someone changes his mind too often it may signal a lack of profound thinking, as it was the case with John Maynard Keynes, one of the biggest intellectual frauds of the XX. century (even if his theories are still mainstream at media, universities and other circles with a limited understanding of economics).
22. Self-confidence is the strength to focus on what is right rather than who is right. It is the strength to face reality, the strength to admit mistakes, the strength to change your mind… This is not easy task as we are hardwired to interpret reality from the lens of or mental models, instead of using reality to challenge our mental model and hypothesis itself. Related to this is the well known concept of "self-serving bias" in psychology. These ideas are brilliantly explained by Richard Heuer in his book The "Psychology of Intelligence Analysis".
Strength in Action and Setting the Standards:
23. Never say yes to something important without thinking about it for a day. Your time and energy are finite, be ruthless with them. Most of us have a tendency to be people pleasers. For anybody with a working limbic system (mostly non-psychopaths), it takes courage and discipline to say no. You may need some hard rules for this. For instance, Kahneman never says "yes" on the phone. In my case (to fight the previously mentioned hyperbolic discounting) I never commit to a plan far in the future that I wouldn´t like to do in the next 24 hours.
24. Few things in life are more important than avoiding the wrong people. Robert Greene explains this point brilliantly in the Law 10 of his 48 Laws. Humans are highly susceptible to the emotions and pathologies of those they spend time with. Meeting some people increases you energy, meeting other drains it. Avoid the latter like the plague.
25. Champions do not create standards of excellence, standards of excellence create champions. Henry Kissinger´s way to set standards of excellence in other people was to ask "Is this your best work?" whenever someone delivered some piece of work to him. This way, the standards of his team raised, and he saved invaluable time. Never lower your standards because of the people you are dealing with.
26. Show me your role models and I will show you your future, you need exemplars. The author Jim Collins originated the concept of "The Personal Board of Directors". It is a selection of people that have a skill, attitude or disposition you want to cultivate. Whenever you face a difficult situation or you do not know how to act, you should do the thought experiment of asking them for advice. For example, in my personal board of directors I have: Marcus Aurelius, Nassim Taleb, Charlie Munger, David Goggins, Mike Tyson, my father, and a co-worker among others. Each of them has more or less relevance depending on the subject - I don´t usually take boxing advice from Charlie Munger...
Understanding your Weaknesses:
27. Bad habits are easy to acquire when there is a delay between action and consequence. Whenever you skip one day in the gym, or consume something you shouldn´t, the issue is not the direct effect of your actions, but the indirect effect it has in the weakening of your mind and creating of a bad habit. Each time you eat that cookie you know you should not eat, you become weaker. Lately I learnt the scientific explanation of this phenomenon: Basically there is a region in our brain named the Anterior Mid-Cingulate Cortex (aMCC) that regulates willpower. It gets larger or smaller based on the amount disciplined actions you take (things you do not want to do). Willpower is like a muscle, you need to train it!
28. Richard Feynman said that the first principle is that you should not fool yourself, and that you are the easiest person to fool. I find this similar to Fyodor Dostoevsky´s take in "The Brothers Karamazov", where he wrote, “Above all, don’t lie to yourself. The man who lies to himself and listens to his own lie comes to a point that he cannot distinguish the truth within him, or around him, and so loses all respect for himself and for others. And having no respect he ceases to love.”
29. There is a gap in our thinking that makes us believe that the way we see the world is the way the world really works! Remember Heuer´s take - we perceive what we expect or what we want to perceive. This is the reason why every dad thinks that his son is the best of his school´s football team. Just thinking that you are right and others wrong does not increase your odds of being right. Why? Because everybody who is wrong thinks he is right. The first step to increase the odds of being right about the world is not to care about who is right or wrong.
Protecting Yourself from your Weaknesses:
30. Alcoholics Anonymous has a helpful safeward to prevent its members from drinking - They call it HALT, an acronym that stands for Hungry, Angry, Lonely, and Tired. If you have an important decision to make, ask yourself if you are HALT. If you are, consider postponing the decision.
31. Instead of making decisions every day, create rules. This is a robust method to decision making that saves you mental energy (which is limited throughout the day) and helps you improve your routines. Two of the many personal examples I have implemented: (i) I always have a cold shower first in the morning, there is no single exception for this. (ii) I always stretch for 15´ just before going to bed if I have >7h 30´ before waking up. I cannot negotiate that. My mind is creative enough to always bring up an excuse to avoid the friction these activities generate in the short term. Without hard rules the stickiness of good habits is even tougher.
32. Since behavior follows the path of least resistance, a surprisingly successful approach is to add friction where you find yourself doing the things you want to avoid. E.g., put your phone far away from you when reading to avoid distractions, never having junk food at home, etc.
33. Change your perspective and detach. If you were fired as the CEO of your own life, and an exceptional human being has put in charge, what 5 changes would he or she make? This is a good way to reduce your blind spots, emotions, and time preference. The magic you are looking for in your life is in the work you are avoiding! This is the best way to spot and attack that work.
Handling Mistakes:
34. How you handle mistakes and whether you learn from them is what separates you from those around. I remember learning from Lisa Feldman Barrett that the reason why humans learn best from painful experiences is because of the high amount of neurotransmitters and other chemicals that are present in those experiences. For example, when you commit a mistake and your boss pisses you off, your cortisol levels will skyrocket, which will make the experience much more memorable and will prevent you from committing the same mistake again. If we understand rationality as behavior that optimizes our chances of survival and reproduction, emotions can indeed help us become more rational - This is the basis of what neuroscientist Antonio Damasio called "Descartes Error" in 1994.
35. After a mistake, always take extreme ownership, learn from the mistake, commit to doing better, and repair the damage as best as you can. Blaming others will only reduce your credibility and postpone the solution. This is one of central ideas of Jocko Willink and Leif Babin´s Extreme Ownership book.
36. The problems of covering up mistakes include not learning, creating a habit, and making the situation even worse. The reason why we cover many mistakes is also related to the mentioned phenomenon of the hyperbolic discounting - the short term friction of embracing the mistake is higher than the pain of hiding it in the short term. See point 11.
37. "What would have to be true for this problem not to exist in first place?" Be careful with the definition of the problem, its root cause, and the visible symptoms. Many times we confuse one for the others. A good test to assess if we are dealing with the problem or the symptom: "Will this solve the problem temporally or indefinitely?"
38. You need discipline to confront the most brutal facts of your current reality, whatever they may be. The same thing that happens with mistakes, also occurs with problems we do not want to face. In addition to the idea of hyperbolic discounting, recall point 33.
39. Keep in separate meetings problem definition, and problem solution. One interesting question to ask is "What do you know about the problem that other people in the room may not?" In this way the amount of bullshit is significantly reduced. Something similar should happen when presenting an investment thesis: "What inefficiency do you see in this investment that is not reflected in the price?"
40. Whoever we are now, is a reflection of the past choices and behaviors that got us there. I like to think that the past is determinist, but the future is not. Determinist scientists and philosophers like Robert Sapolsky would say that all grey lines of the future except for one are the paths that you do not yet know are closed to you. I still do not have a clear view on this. I guess that the best thing we can do is to always act with maximum agency as if there was total free will. And use determinism to get angry less often with people - at the end of the day, they have no free will, they were determined to be that way. It´s human or even natural randomness. Just as we do not get angry with a volcano, we should not get angry with people. This reasoning makes us arrive to a stoic message that could be useful.
"Life can only be understood backwards but it must be lived forwards" - Soren Kierkegaard
41. Face yourself with to at least 3 possible solutions to any problem. The reason is that binary thinking or framing is comfortable but limiting or even dangerous. In fact, this kind of framing is one of the main deception techniques used by people to make others think they are choosing their own fate.
42. Einstein is thought to have said that not everything that can be counted counts and not everything that counts can be counted. In my view, when making decisions we tend to overweight observable metrics and underweight hidden metrics. Imagine if LinkedIn showed the average sleep hours, stress levels, quality hours with family members along with the company logo and job title. So many people would change jobs. Why? Because we attribute success based on observable metrics, not hidden ones. My life has improved significantly since I did a conscious effort to start optimizing for all metrics, not just observable ones. Why I think everyone should have a sleep tracking watch or gadget? Because we all know that sleep is crucial for us, but its non-observability makes it harder to prioritize. Since I bought a watch to track and quantify my sleep, the relative importance that having a good night of sleep has increased significantly.
Evaluating Options:
43. The targeting principle: Know what you are looking for before going through the data sorting. Most information is irrelevant, knowing what to ignore, separating the signal from the noise is the key for not wasting valuable time.
44. Always look for HiFi (High Fidelity) information - Information that is close to the source and unfiltered by other people´s interests and biases. In my view however, there are some reversals to this point, for example when reading books of a new genre, as filtered information can be easier to process, especially for novices. If someone wants to start learning about Austrian School of Economics and takes The Theory of Money and Credit of Mises, chances are he is going to understand close to nothing.
45. Skimming creates blind spots - when reading a summary you miss details, details that were not relevant for the author of the summary, but that may be relevant for you. Besides, I think there is another reason why one should read full books; many times the weakest link of our learning process is not the ideas, it is the time and effort we put into thinking and rethinking learnt ideas. In this regard, I often find that many books are as good as our effort to get immerse into them.
46. Information is food for the mind, what you put in today shapes the thoughts and solutions of tomorrow. This reminds of something similar I heart from Chris Williamson - If your body is made of what you put into your mouth, your mind is made of the things you put into your mind and ears. Your content diet should be spirulina for your soul, not fast food for your amygdala.
Executing:
47. Actions and decisions should be categorized based on consequences and reversality. ASAP Principle: When the cost of the mistake is low, move fast. ALAP Principle: When the cost of undoing high, make it as late as possible.
48. There is one point at which, the benefit of getting more information is exceeded by the cost of loosing time or opportunity. The stop / flop / know principle: Stop gathering more information and execute your decision when either you stop gathering useful information or when loose an opportunity, or when you know something that makes it evident what option you should choose.
49. There is a point at which more information only increases confidence, not accuracy. Paul Slovic showed this in 1974 with horse race competitions. This idea was shown in Heuer´s Lessons from the CIA.
50. When the cost of failure is expensive, it is worth investing in a large margin of safety - this is the difference between what you think will happen and what could happen. My personal rule of thumb here is: When cost of failure is low, optimize (I especially do this with time, deadlines, etc.) When the cost of failure is high, unoptimize, become robust to randomness, work with high margin of safety.
51. Performing small, low-risk experiments on multiple options keeps optionality up before committing all the resources to one. If the cost is low, it is often worth buying exposure to positive tail events. The first step is however, is to eliminate the negative tail risks (i.e., risk of ruin). Look for asymmetries. This is often called "Barbell Strategy". In investing barbell strategy is about having a high % of the portfolio in ultra safe assets, and a small % in vary risky assets. In a professional career, the barbell strategy could be about having a safe job, and working on small high risk side businesses.
52. Before making a major decision it is worth waiting or even sleeping before telling it to anyone. Extra point: before going to bed, write a note explaining it to your future self. It is good to live with the decision before talking, so that you see new things!
53. Three execution self safes from Ulysses: (i) Setting up wires: Hard rules based on time, amount, circumstances. (ii) Commander´s intent: Empower others to make decisions without you. (iii) Tie your hands: E.g., throw away all your junk food.
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Learning from our decisions:
54. The process principle: We should focus on the process rather than on the outcome when there is randomness regarding the latter. We need to avoid resulting, our natural tendency to equate the quality of our decision with the outcome. Do not be fooled by randomness... good poker players understand this. Journalists do not. If interested on the subject, Thinking in Bets by Annie Duke, More Than you Know by Michael Mauboussin, or Fooled by Randomness by Nassim Taleb could be interesting reads.
55. The transparency principle states that you should make your decision process as transparent and open to your own scrutiny as possible. This is the best antidote against blind spots. However, when doing this transparency exercise, we should be aware of our own creativity. We are experts in coming up with legit ideas to cover our un-legit inner motives. Remember Feynman and Dostoevsky´s take in point 28...
56. Closely related to the previous point - Write down your decision making principles at the time of doing them, do not rely on your memory, your ego is going to distort it. Often times we connect the dots backwards and create a narrative that perfectly fits our past decisions, and the more we talk about them, the bigger the distortion, and more difficult it becomes to separate reality from imagination.
Learning from our decisions:
57. Good decision making is about knowing how to get what you want, and knowing what is worth wanting. Our worst regret in life comes when we fail to play the game by our own scoreboard. A life lived according to someone else´s scoreboard is a life not worth living. Think about much people spend thinking how to things they want, and how little time they spend thinking what is worth wanting.
58. The hedonic treadmill is the idea that an individual's level of happiness, after rising or falling in response to positive or negative life events, ultimately tends to move back toward where it was prior to these experiences.
59. What seems like the most important thing at a time, the very thing that consumed you seems silly now in hindsight. In my view, the best thing we can do to avoid this phenomenon, is to anticipate it - use detachment, see yourself in third person, and ask when facing a problem "what will I think about this issue in one year?"
Trying to be Happy:
60. Time is the ultimate currency. Say things now to people you care about, spend maximum amount of time with your family / children, savor daily pleasures instead of waiting for "big ticket items" to make you happy, work in a job you love, do not rush to choose your mate, do it carefully.
61. Happiness requires a conscious change in outlook in which one chooses daily optimism over pessimism, hope over despair. Not long ago I saw happiness as just prediction error, reality minus expectations. But that definition excludes from the equation what Daniel Z. Lieberman calls the "Here & Now". A key component of happiness is also mental peace, being happy with the things you have is a choice that needs deliberate action. I recently learnt that just 5 minutes of gratitude per day have same impact on happiness as doubling your salary [1]. It may sound as a cliché, but every day I am more convinced that if you are not happy with a coffee, you will not be happy with a yacht.
"If you suffer distress because of some external cause, it is not the thing itself that troubles you but your judgement about it, and it is within your power to cancel that judgement at any moment" - Marcus Aurelius
[1] The New Stylized Facts About Income and Subjective Well-Being (J.Wolfers, D.Sacks & B.Stevenson)
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