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TIP571: Charlie Munger & The Psychology of Human Misjudgment

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Aug 18, 2023

Discover the 28 psychology of human misjudgments that can cloud decision-making and investment choices. Explore the influence of biases like self-deception, status quo bias, and the anchoring effect. Learn how rewards, punishments, and social proof shape our behavior in investing. Uncover strategies to counteract impatience and the desire to minimize uncertainty. By recognizing these psychological factors, investors can make more rational decisions and ultimately enhance their financial success.

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ANECDOTE

Steakhouse Influence

A supplier took a client to a luxurious steakhouse.
This pleasant association influenced the client's future purchase decisions.

ANECDOTE

NYPD Overtime

NYPD officers maximized overtime in their final year due to a flawed pension system.
This demonstrates how incentives drive behavior.

ADVICE

Managing Experiences

Separate pleasurable experiences into segments.
Deliver painful experiences all at once to lessen negative impact.

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