Saturday Serendipity
Quote, Mental Model, Interesting find.
Hi,
Reading time: About 6 minutes
Quote
“Man will do many things to get himself loved;
he will do all things to get himself envied.”
— Mark Twain
Mental Model
Decision Making Fatigue
It’s wedding season, and I see my mother and sister choosing which clothes to wear for which function with great intent. My father is deciding which kurta to wear when. Then there is me, I fully rely on my father and mother to pick an outfit for me(this is not an ideal quality, but for this post let’s fuel my ego).
While they were packing, I was looking at them and wondering why are they so stressed and fatigued.
Turns out one of the reasons is the fact that they have to make so many decisions. Their normal life and work goes on. So this wedding decision making is just an extra load for them. Looking at them I wonder how much stress and fatigue the people who planned the wedding are under.
Safal Niveshak wrote,
According to one estimate, we normally make somewhere around 35,000 decisions every single day. Many of those decisions are unconscious like walking, blinking, breathing and don’t need any extra mental effort. But the sheer volume of even those decisions that require at least some brain power like what to wear, where to eat, how to get to work, who to call when you get there, is staggering.
Now that I think of it we make a lot of decisions which can be avoided and if avoided we reduce our mental fatigue.The problem arises when you make a lot of decisions then you have to use up willpower and mental energy. Both are limited in supply.
“Science has demonstrated that humans have a limited supply of willpower. If you use up your supply resisting one temptation, it limits your ability to resist others.” - Scott Adams
What’s the problem if you lose willpower and get mentally fatigued?
Well if you do lose these two things by the end of the day your brain cannot remain rational. Your mental capacity is over as it has been exposed to too much information. The worst part is, if you end up losing your energy early on some important decisions that require you to be rational, you might end up making decisions that are not so rational.
I have experienced this multiple times. Sometimes I just want to end the day so I don’t think a lot I just do whatever can end the day early. In doing so, I left a problem that needed to be solved, solved but done in a very mediocre way.
Decision fatigue can have very serious implications especially in areas like judicial process. Here’s an example from the book Art of Thinking Clearly –
Four prisoners in an Israeli jail petitioned the court for early release. Case 1 (scheduled for 8.50 a.m.): An Arab sentenced for 30 months for fraud. Case 2 (scheduled for 1.27 p.m.): A Jew sentenced to 16 months for assault. Case 3 (scheduled for 3.10 p.m.): A Jew sentenced to 16 months for assault. Case 4 (scheduled for 4.35 p.m.): An Arab sentenced for 30 months for fraud. How did the judge decide?
More significant than the detainee’s allegiance or the severity of their crimes was the judge’s decision fatigue. The judges granted request 1 and 2. However, they struck out applications 3 and 4 because they could not summon enough energy to risk the consequences of an early release…A study of hundreds of verdicts shows that within a session, the percentage of courageous judicial decisions gradually drops from 65% to almost zero.
Now I am a man of no importance, but a judge being prone to decision fatigue shows it can have a huge impact on society. But a small tip from my side, if you ever need to present something to others try and go as early as you can.
In my opinion the answer is simple, just reduce your decisions and become more focused in the things you want to focus on. I tend to relate this concept to Sherlock Holmes and how he used to forget all the information that he thought was useless like how many planets are there, how far the sun is, etc. He believed the mind is like an attic, if you fill it up with too much information you won’t be able to find the things you want to find. (remember the important stuff)
The mind only has so much willpower and energy. Focus it on the things that matter. This is of course something you have to ask yourself there is no general answer.
For people like Zuckerberg and Steve Jobs making the decision of what to wear was pointless. They thought for them it is way more important to do the work than to decide what to wear every day.
In Investing
Many people believe that the lesser decision you make as a value investor the more likely you are to be right. You cannot expect to make a 100 decisions a year. There are simply not that many opportunities where you can find a 100 great companies at a fair price.
Munger on how many decisions you need to make as an investor –
…you don’t need many in a lifetime. If you look at Berkshire Hathaway and all of its accumulated billions, the top ten insights account for most of it. And that’s with a very brilliant man—Warren’s a lot more able than I am and very disciplined—devoting his lifetime to it. I don’t mean to say that he’s only had ten insights. I’m just saying, that most of the money came from ten insights.
So you can get very remarkable investment results if you think more like a winning pari-mutuel player. Just think of it as a heavy odds against game full of craziness with an occasional mispriced something or other. And you’re probably not going to be smart enough to find thousands in a lifetime. And when you get a few, you really load up. It’s just that simple.
We make decisions for various reasons when we are not supposed to. The errors of commission and omission happen due to a huge list of biases, that we experience but the key to investing lies in making a few decisions which work out well.
Warren Buffett is supposed to have said this at a business school –
I could improve your ultimate financial welfare by giving you a ticket with only twenty slots in it so that you had twenty punches – representing all the investments that you got to make in a lifetime.
And once you’d punched through the card, you couldn’t make any more investments at all. Under those rules, you’d really think carefully about what you did, and you’d be forced to load up on what you’d really thought about. So you’d do so much better.
To conclude,
“To attain knowledge, add things every day. To attain wisdom, subtract things every day,” - Lao Tzu
Resources:
Interesting find
How to guarantee a life of misery
That’s it! Enjoy your weekend!
Thank you,
Samvit.