This is a collection of mental models charlie uses to explain human behavior. Reviewing mungers the psychology of human misjudgment. Jun 24, 2017 the psychology of human misjudgment by charlie munger the italicized parts at the end of many sections are the additional quotes and comments from tren griffins book. Mungers an adherent of a particular value system common among businessmen from the mid19th late20th century. The psychology of human misjudgment 2005 pdf hacker news. Mungers psychology of human misjudgment when making decisions, most of us have mental processes that we tend to follow on a moreorless automatic basis. I had previously listened to a recording of mungers the psychology of human misjudgment and read the transcript in poor charlies almanack and elsewhere. I noticed a few grammatical errors that i corrected when reading it through this time, and there are probably some others that i missed. I am very interested in the subject of human misjudgment, and lord knows ive created a good bit of it. These are notes of a lecture munger gave on the psychology of human misjudgement, in which he talks about how psychology impacts decisionmaking, especially in the context of finance. Billionaire charlie munger gave a very famous speech at harvard university titled the psychology of human misjudgment. He gave three talks that were combined into this talk at harvard university on 25 different biases that are the root of most poor. The definitive book on warren buffets business partner. After attending the last berkshire hathaway shareholder meeting, i read a book on charlie mungerpoor charlies almanack.
Aug 16, 2008 after attending the last berkshire hathaway shareholder meeting, i read a book on charlie mungerpoor charlies almanack. With markets, youre dealing with the collective judgment of human beings. The psychology of human misjudgement andrew wilkinson medium. Well i havent been able to find the actual audio of the presentation until a listener of the show recently sent it to me. For the most part, these processes have developed over a lifetime and are not explicitly based on following some set of standardized principles or checking items off a list. Its called the psychology of human misjudgement and its about the many ways that we fool ourselves into making horrible decisions in business, investing, and life. In the last chapter, charlie summarizes 25 human psychologybased tendencies while generally useful, often mislead. Charlie munger and the psychology of human misjudgment. Charlie munger on the psychology of human misjudgment part 1, stocks. Charlie munger is warren buffetts right hand man at berkshire hathaway nyse. Jun 29, 2017 its called the psychology of human misjudgement and its about the many ways that we fool ourselves into making horrible decisions in business, investing, and life.
Apr 14, 2016 a summary of the psychology of human misjudgment by charles munger published on april 14, 2016 april 14, 2016 21 likes 4 comments. Bias 1 reward and punishment superresponse tendency. So i think he thinks of his specialty as the psychology of human misjudgment, and part of this human misjudgment, of course, comes from worrying about the types of fads and. Charlie mungers psychology of human misjudgement tradingtools. Hes the authority on the subject and the book is revered by many in the psychology field and outside. Theres a more complete version of this in the book poor charlies almanack. Along with commentary and recommended resources on the psychology of human misjudgement. Audio of the often referred to speech by charlie munger on the psychology of human misjudgement given to an audience at harvard university circa jun 1995. A summary of the psychology of human misjudgment by charles munger published on april 14, 2016 april 14, 2016 21 likes 4 comments. Charlie munger on the psychology of human misjudgment speech at harvard university estimated date. When i read transcripts of my psychology talks given about fifteen years ago, i realized that i could now create a more logical but much longer talk, including most of what i had earlier said. Munger says this should be obvious but so many people dont understand the how important incentives are for. A site dedicated to the psychology of human misjudgement. The final revision was made from memory over about fifty hours by a man eightyone years old, who never took a course in psychology and has read none of it, except one book on developmental psychology, for nearly fifteen years.
We cheat more when we believe the world owes us one. The psychology of human misjudgement by charlie munger on. Jan 17, 2015 the psychology of human misjudgment by charles t. Those familiar with the work of daniel kahneman for example wont find too much new here, but nonetheless it is a good quick introduction to the topic. In this value system, 1 the primary purpose of economic activity is efficiency, producing more with less 2 the purpose of employees is to serve as instruments for their employers to accomplish their business goals and 3 anything that gets in the way of this is by definition. Charlie got a fair bit of inspiration from cialdinis book influence. The abridged and animated video of mungers the psychology of human misjudgment speech that has been making the rounds led me to go back and reread the version munger rewrote in 2005 for inclusion in poor charlies almanack. On the psychology of human misjudgment free summary by. Munger preface when i read transcripts of my psychology talks given about fifteen years ago, i realized that i could now cre ate a more logical but much longer talk, including most of what i had earlier said. In general, youre better off avoiding most media outside of books and films and media sources you. Readers will receive a masters degree in decision making, investing, human psychology, and much more. And this talk on the psychology of human misjudgment is one of the best youll.
Psychology and the secret of investing success duration. Instead, interest in psychology was pretty well confined to a group of professors who talked and published mostly fat them selves, with much narural detriment fromisolation and groupthink. In all his talks, he shows wit, rationality, and incredible clarity of thought. Charlie munger and the psychology of human misjudgment, continued this series covers each of the 25 tendencies munger addresses in his book poor charlies almanack. Fairly late in life, i stumbled into this book, influence, by a psychologist named. And they interact, so it gets slightly complicated. But behavioral economists dont agree with the view of standard economics. The psychology of human misjudgement charlie munger book.
The essay in poor charlies almanack is his most recent and comprehensive version of what he calls the psychology of human misjudgment. Jul 25, 2016 the psychology of human misjudgment 2005 pdf. Jun 02, 2014 the psychology of human misjudgment by charlie munger by hurricanecapital june 2, 2014 august 8, 2016 the elementary part of psychology. The psychology of human misjudgement in pdf format here via diana. Poor charlies almanack by charlie munger book summary and. Jan 14, 20 2 thoughts on full text of speech the psychology of human misjudgement by charlie munger charlie munger on the psychology of human misjudgements finance and strategy thinking says. Everybody knows about warren buffett, but few people outside of the investing world know about his business partner, charlie munger. Jan 03, 2017 charlie munger is the vice chairman of berkshire hathaway. I was educated in an era wherein the contributions of nonpatienttreating psychology to an understanding of misjudgment met little approval from members of the mainstream elite. Munger selections from three of charlie mungers talks, combined into one talk never made, after revisions by charlie in 2005 that included considerable new material. Charlie munger the psychology of human misjudgment. Given below is the mind map for one of the misjudgment association. The power that incentives and disincentives have on the actions of others cannot be overstated.
Terribly smart people make totally bonkers mistakes by failing to pay. Underrecognition of reinforcement psychology or incentives economics 2. Charlie munger on the psychology of human misjudgment part 2, stocks. Full text of speech the psychology of human misjudgement. Ive recently finished a book called poor charlies almanac by charlie munger who is warren buffets partner. There is not much point in rewriting what charlie says in different words, but perhaps i can find more recent examples that are informative andor amusing. This is the transcript of one of the speeches given by berkshire hathwayss very own, charlie munger at harvard law school, 1995, a truly brilliant investor and an intelligent man. The psychology of human misjudgement andrew wilkinson. Jan, 20 audio of the often referred to speech by charlie munger on the psychology. A summary of the psychology of human misjudgment by. Audio of the often referred to speech by charlie munger on the psychology.
A summary of the psychology of human misjudgment by charles. This time i made sure my book choice is deliberate and reading range is broad. The psychology of human misjudgment by charlie munger charlie munger. Fairly late in life i stumbled into this book, influence, by a psychologist named bob cialdini, who became a supertenured hotshot on a 2,000person faculty at a very young. The psychology of human misjudgment essay 25096 words. Check out the psychology of human misjudgement by charlie munger on amazon music. It was basically behavioral psychology before the field exploded. Mar 16, 2017 check out the psychology of human misjudgement by charlie munger on amazon music. The copy i continuously go back to is from a word file that i created in order to put the speech on my kindle, which is a lot easier to carry around than the book. Mungers psychology of human misjudgment the rational walk. The psychology of human misjudgement charlie munger full speech. Poor charlies almanack is a collection of charlie mungers best advice given over 30 years, in the form of 11 speeches given as commencement addresses and roundtable talks.
Charlie munger on the psychology of human misjudgment. Access a free summary of on the psychology of human misjudgment, by charles munger and 20,000 other business, leadership and nonfiction books on getabstract. Jul 25, 2010 the psychology of human misjudgment by charles t. Charlie munger is the vice chairman of berkshire hathaway. This section of the book should feel disturbingly familiar to anyone. Notes taken while rereading the psychology of human misjudgment in 2020. The psychology of human misjudgment by charlie munger. The psychology of human misjudgment, by charlie munger. The psychology of human misjudgement charlie munger full. The psychology of human misjudgment economists assume that people are rational in the sense that they use all available information as they take actions intended to achieve their goals. To make any money, you have to be able to make good decisions and understand why other people are making comparatively bad decisions.
Feb 23, 2016 the psychology of human misjudgment by charlie munger charlie munger. The psychology of human misjudgment the simple dollar. Instead, interest in psychology was pretty well confined to a group of professors who talked and published mostly for themselves, with much natural detriment. I dont think ive created my full statistical share, and i think that one of the reasons was i tried to do something. Full text of speech the psychology of human misjudgement by. Charlie mungers the psychology of human misjudgment. Theres a lot of fantastic wisdom in this book and i recommend it to everyone but a chapter that stands out in particular is psychology of human misjudgment in which charlie identifies what he believes are the most prevalent and harmful psychological bugs that drive otherwise. These were combined into this talk that was never made about 25 different biases that actually are the cause of most bad decisions that people make. He gave three separate talks ranging from about 20 to 23 years ago. However, i was educated in an era wherein the contributions of nonpatienttreating psychology to an understanding of misjudgment met little approval from members of the mainstream elite. A were summarizing the text he authored titled the psychology of human misjudgement, where he describes some. The goal of an investor ought to be to take advantage of human misjudgment. Charlie munger is the author of this fantastic framework, this page highlights the video that features the first speech munger gave on this subject.
1546 9 217 1336 619 938 1293 1286 458 1084 696 537 1356 1334 1175 1180 877 491 335 280 908 1356 700 496 31 1219 1431 1148