It’s been a long time since originally reading Poor Charlie’s Almanac, so I picked up a pamphlet (called The Psychology of Human Misjudgment) at a Stripe Press event instead, as a quick way to get in the mind of Charlie Munger. It was not as quick as I hoped for, but I did feel I got a glimpse into his mind.

I don’t think you need to read the entire talk to grasp the essence. Here’s Perplexity’s summary of each rule:

  1. Reward and Punishment Superresponse Tendency: We tend to work towards rewards and avoid punishments. We are highly influenced by incentives and disincentives, which can lead to biased behavior[2].
  2. Liking/Loving Tendency: We tend to like and love things associated with what we already like or love, often ignoring faults in the object of our affection[2].
  3. Disliking/Hating Tendency: We tend to dislike or hate things associated with what we already dislike or hate, often ignoring positive attributes[2].
  4. Doubt-Avoidance Tendency: We tend to quickly remove doubt by reaching a conclusion, which can lead to hasty and poor decisions[2].
  5. Inconsistency-Avoidance Tendency: We tend to be consistent with our past actions and beliefs, even when it's not in our best interest[2].
  6. Curiosity Tendency: We tend to be curious about things we don't understand, which can lead to both positive and negative outcomes[2].
  7. Kantian Fairness Tendency: We tend to expect fairness in all aspects of life, which can lead to disappointment and irrational behavior[2].
  8. Envy/Jealousy Tendency: We tend to feel envious of others' possessions or achievements, which can lead to destructive behavior[2].
  9. Reciprocation Tendency: We tend to reciprocate both favors and slights, which can be exploited by others[2].
  10. Influence-from-Mere-Association Tendency: We tend to be influenced by mere associations, even when they're not logically relevant[2].
  11. Simple, Pain-Avoiding Psychological Denial: We tend to deny or ignore painful truths, which can lead to poor decision-making[2].
  12. Excessive Self-Regard Tendency: We tend to overestimate our own abilities and underestimate our faults[2].
  13. Overoptimism Tendency: We tend to be overly optimistic about outcomes, which can lead to taking unnecessary risks[2].
  14. Deprival-Superreaction Tendency: We tend to strongly react to the loss of something, often more than we value gaining it[2].
  15. Social-Proof Tendency: We tend to follow the actions and beliefs of others, especially in ambiguous situations[2].
  16. Contrast-Misreaction Tendency: We tend to overreact to contrasts and fail to notice small, gradual changes[3].
  17. Stress-Influence Tendency: We tend to make poor decisions under stress[3].
  18. Availability-Misweighing Tendency: We tend to overvalue easily available information and undervalue less accessible information[5].