POOR CHARLIE’S BILLION-DOLLAR DECISION-MAKING TIP
Written By Don Sevcik
unforced errors as correctable mistakes with no outside cause. In essence, the professional avoids losing points. And they do this by avoiding unforced errors.
We’ve all been there…
To do this, we take the second choice of decision-making. Instead of focusing on what helps us, we focus on what would hurt us. To show you the power of this, we turn to Warren Buffett’s partner, Charlie Munger. investment decisions, Charlie and Warren use a process called inversion. In short, instead of thinking about how an investment will go right, they find ways it could go wrong. And they eliminate behaviors and decisions based on this. Eliminate unforced errors which you can control. When making In book, Extraordinary Tennis for the Ordinary Player , he discusses the difference between professional and amateur players. Professionals win Simon Rano’s points whereas amateurs lose them. How? Amateurs make lots of unforced errors. Think of
Happier than a child at Christmas, ready to make a new decision. Every decision involves some thinking. Sometimes, it’s five seconds. Other times, it’s five months. When we start our decision-making journey, we have two choices. First, we can research all the ways we’d do it right. We’d read books related to the decision. We’d discuss options with wise colleagues. We’d enroll in training sessions. We’d do research. While this helps decision- making, it takes work. Making new decisions is like aiming at a target we’ve never seen before. What if there was an easier way? What if we could increase the probability of a good decision with less work?
“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.”
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