Hi friends,
Welcome to another issue.
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This issue might be slightly different. I would be sharing some notes about avoiding stupid decisions -mine and otherwise.
Since science is falsifiabe i.e it's based on the ability of assumptions to be proven wrong by evidences. How do we know we are doing the right thing. Think smoking cigars from the 1930s to the 1950s. Eg Bitcoin, how do I know that buying it is the right thing to do? In hindsight things look pretty obvious but then how would you know when you are in it?? Say how would I know that bitcoin at the moment isn't madness.
If science is falsifiable, how do we know we are doing something right?
What is Falsifiability?
This is the ability of assumptions to be proven otherwise with evidence. The capacity for a statement, theory, or hypothesis to be contradicted by evidence.
While I do not have a specific answer, here are two laws I think would help.
The Lindy Effect and Inversion Thinking
The Lindy Effect
The Lindy effect is the idea that the future life expectancy of non-perishable things like books, technologies and ideas is proportional to their current age.
Lindy things age in reverse – the older they are, the longer is their remaining life. Every additional year they survive, their remaining life increases by another year.
Only the non-perishable can be Lindy.
Lindy effect is a rule of thumb (heuristic). It is generally true, but not always. It is not a law like the Law of Gravity which is always true.
Let’s dive into the origins of Lindy Effect before exploring its practical applications in day to day life.
But how does this help?
Lindy Effect provides a useful rule of thumb to assist:
“For things to survive, they necessarily need to fare well in the risk dimension, that is, be good at not dying.
By the Lindy effect, if an idea has skin in the game, it is not in the truth game, but in the harm game.
An idea survives if it is a good risk manager.
[It] not only doesn’t harm its holders, but favors their survival.”
-Nassim Nicholas Taleb, Skin in the Game
When you cannot decide, let Time decide.
Lindy makes Time the final judge of value and quality.
Inversion Thinking
While we all try to do good and fall short sometimes. Inversion thinking helps us better avoid things we don’t want to do. Say you want to pass your exams, instead of trying to do what people pass their exams do, inversion thinking tells you to avoid doing things people who fail their exams do.
Instead of trying to be a successful manager, try to avoid what unsuccessful managers do.
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
— Charlie Munger
In the end, Avoiding Stupidity is Easier Than Seeking Brilliance.
Inverting your failed relationships and playing biased games is good writing on something similar by Hameed I believe you should read too.
Pictures
Readings
The Revised Psychology of Human Misjudgment, by Charlie Munger (worth it)
Avoiding Stupidity is Easier than Seeking Brilliance
Tools
That wraps it up for this week.
If you want to discuss any of the ideas mentioned above or have any books/papers/links you think would be interesting to share in a future edition, please reach out to me by replying to this email or sending me a direct message on Twitter at @iamuhammadtahir.
Until next week, take care!
Muhammad Tahir.