Tag: Predictions

We Might Be Wrong

Posted on by jabittan
“If you can be sure of being right only 55 percent of the time,” writes Dale Carnegie in the book How to Win Friends and Influence People, “you can go down to Wall Street and make a million dollars a day. If you can’t be sure of being right even 55 percent of the time, why should you tell other people they are wrong?”

 

We always feel so sure of our judgments and conclusions. From the health and safety of GMO foods, to the impacts of a new tax, to who is going to win the Super Bowl, we are often very confident people. The world seems to always want our opinions, and we are usually very excited to offer our opinion with a staggering amount of confidence. This has lead to a lot of funny social media posts about people being incorrect about history, science, and sports, but more seriously, it can create thinking errors that lead nations to invade countries for poor reasons, lead to mechanical failures of spacecraft and oil platforms, and can cause us to loose huge sums of money when the game doesn’t turn out the way we knew it would.

 

I think a good practice is to look for areas where we feel a high degree of confidence, and to then try to ascribe a confidence level to our thoughts. We can try to tie our confidence levels back to real world events to help us ground our predictions: The percent chance of getting blackjack in a given hand is 4.83%, Steph Curry’s 3-point shooting percentage is 43.5%, and the percent chance of getting heads in a coin flip is of course 50%. Can you anchor your confidence (or the chance you are wrong) to one of these percentages?

 

I haven’t studied this (so I could be wrong – I’d wager the chance I’m wrong and this is not helpful at Steph Curry’s 3-point percentage), but I would expect that doing this type of exercise would help us recognize how overconfident we often are. It might even help us get to the next step, admitting that we might be wrong and considering different possibilities. Carnegie continues:

 

“You will never get into trouble by admitting that you may be wrong. That will stop all argument and inspire your opponent to be just as fair and open and broad-minded as you are. It will make him want to admit that he, too, may be wrong.”

 

The important thing to remember is that the world is incredibly complex, and our minds are only so good at absorbing lots of new data and articulating a comprehensive understanding of the information we synthesize. We should be more willing to consider ways in which our beliefs may be inaccurate, and more willing to listen to reasonable people (especially those who have demonstrated expertise or effective thinking skills) when they suggest an idea that does not conform to our prior beliefs. Try not to be close-minded and overly confident in your own beliefs, and you will be better at avoiding thinking errors and making better long-term decisions.

Be Calm Ahead of Your Obstacle

Posted on by jabittan
In Letters From a Stoic Seneca writes, “There are more things … likely to frighten us than there are to crush us; we suffer more often in imagination than in reality.” Our minds work really hard to keep us safe, keep us in important positions, and keep us connected so that we can succeed and so that our children and grandchildren can enjoy a high status life. Our minds are trying to help us navigate an uncertain future, but sometimes our minds go too far and we become paralyzed with a fear that is worse than the outcome we want to avoid.

 

Seneca continues, “What I advice you to do is not to be unhappy before the crisis comes; since it may be that the dangers before which you paled as if they were threatening you, will never come upon you; they certainly have not come yet.”

 

We can live our lives worrying about what will go wrong five minutes from now, five days from now, or five years from now, but we never truly know what is around the corner. Sometimes we set artificial deadlines on ourselves and sometimes those deadlines are forced upon us, but that doesn’t mean we need to live every moment of our lives up to that deadline in fear of what will happen if we don’t achieve what we intended by that date. The fear that we feel can be useful in pushing us to get stuff done and avoid procrastination, but when we notice that we can’t sleep at night because we are worried of the negative consequences of what may happen if that bad thing we fear occurs, then it is time for us to step back and refocus on our present moment. I find that it is helpful for me to look at the fears that I have and recognize that in the present moment I am fine, and to recognize that the status quo will most likely continue if I miss the deadline or if the bad thing does happen. There are plenty of things to fear, and we should build a capacity to see that we will still be able to move on with life even if some of our worst fears come true.

 

Ultimately, we know we are going to have obstacles and setbacks in our lives, but that does not mean we need to live every moment in fear of what bad thing is around the corner. We can live conservatively and save money and resources to confidently weather such challenges, but we do not need to allow negative things in our lives to cause us trauma before they have occurred. Preparing ourselves ahead of time will help mitigate the fear, but learning to accept that bad things will happen and learning to enjoy the present moment are the only ways we can truly escape from the fear of what lies ahead.

Training Our Instincts

Posted on by jabittan
In his book Becoming Who We Need To Be, author Colin Wright explains how training in certain areas changes us. “Training our instincts is like feeding our subconscious. It grants us more informed, helpful knee-jerk reactions, rather than blind and potentially damaging impulses.” For examples, Wright writes about the ways that experienced auto mechanics are diagnose vehicle problems in one area of an engine based on a signal in a different area of the engine and he writes about learning to cook in six months and having a new understanding and appreciation for raw ingredients that can be cooked together to make a meal. In isolated cases, things we don’t know about and don’t understand at all can become things that give us clues and slight insights based on our experience and knowledge.

 

Recently, Tyler Cowen interviewed Ezekiel Emanuel for his podcast, Conversations with Tyler, and I was struck by Emanuel’s efforts to learn and engage with something new each year. He has recently learned how to make his own jam and chocolate and in the interview talked about the insights and unexpected things that he has gained by trying something completely new. He doesn’t always stick with everything he learns and tries, but by applying himself in a lot of different areas, he picks up new perspectives, meets new people, and gains a new appreciation for something that was foreign to him in the past.

 

The lessons from Wright and Emanuel are things we should keep in mind and try to build into our own lives. When we only have a vague understanding or idea of how the world works, we are going to move through it making assumptions that are not warranted. We will act in ways that seem intuitively obvious for us, but our way of moving through the world may be as foolish as asking the French why they haven’t had an air tanker drop water on Notre-Dame. Ignorance can be quite costly in our own lives and in the negative externalities that we push onto the rest of the world, and as we become more responsible with relationships, families, and businesses that count on us, ignorance can be quite costly for the rest of society. Becoming aware of areas where we have no expertise and no training is important so that we can identify where we might have these knee-jerk reactions that won’t help anyone. Awareness of our ignorance can help us choose what we want to focus on, what we want to learn about, and what would help us become a better person for our society.

 

On the opposite side of the coin, as we become more expert in a given area, we will be able to better sense what is happening around us and make choices and decisions that we can’t explain but that work properly. It is something we should strive toward, but all the while we should recognize where our expertise falls short and how bad assumptions could harm us and others.