It's a fantastic read that can really help you understand why supposedly rational masses of people can end up being so wrong. In the tech world, it ends up being more relevant than one would like it to be.
It was revised and updated by Munger - it's better than the original because it has more experience and information. The old one is fine too, but is harder to read and a bit more dated.
That's referenced in this interesting blog post with some Munger quotes from ~10 years ago. For context Munger appears to have been centrally involved with Berkshire's various energy plays and investor-owned utility deals (a major fraction of their portfolio).
> "… running out of hydrocarbons is like running out of civilization. All this trade, all these drugs, fertilizers, fungicides, etc. … which China needs to eat with a population so much, they all come from hydrocarbons. And it is not at all clear that there is any substitute.
> "When the hydrocarbons are gone, I don’t think the chemists will be able to simply mix up a vat and there will be more hydrocarbons. It’s conceivable, of course, that they could but it’s not the way to bet."
That's in the context of his arguments about for ignoring any calls for 'energy independence' because it's better to preserve domestic resources for future emergencies.
Once you start observing the biases he has mentioned in the talk, you realise how vulnurable you are as a human to be co erced into making decisions which could be so wrong.
Thank you for the link, it is an interesting read, and has a lot of funny quotes, stories and some interesting ideas. In the beginning I felt it was insightful, but by the end of the read I felt it was just a bunch of opinions based on personal anecdotes.
(disclaimer -- I'm obviously much less wealthy and successful than Munger)
Human judgment is often flawed due to various psychological biases and tendencies hardwired in our brains through evolution, such as incentive-caused bias, consistency and commitment bias, and deprivation super reaction syndrome.
Figures like B.F. Skinner and Ivan Pavlov conducted important experiments demonstrating how reinforcement and conditioning shape human and animal behavior.
Marketing, advertising, and product design frequently exploit psychological tendencies like contrast effects, reciprocity bias, and social proof to influence consumer choices.
Board of directors are often ineffective at reining in CEOs due to psychological factors like commitment to prior decisions and not wanting to undermine authority figures.
Understanding psychological tendencies can help avoid being manipulated and make better decisions by considering disconfirming evidence and alternatives objectively.
Applying insights from psychology and economics together gives a more holistic view of human decision-making than either field alone.
Education should teach about these psychological tendencies so people can recognize their own biases and make more informed judgments.
Case studies of companies like Coca-Cola and mistakes of leaders like John Gutfreund demonstrate impacts of psychological factors consequentially.
Figures like Charles Darwin and Sam Walton applied self-awareness of psychological tendencies to achieve remarkable success and wisdom.
Secretive conventions and forcing priority on difficult tasks can help overcome natural human biases revealed through experiments.
It's a fantastic read that can really help you understand why supposedly rational masses of people can end up being so wrong. In the tech world, it ends up being more relevant than one would like it to be.