Book Review: the art of thinking clearly

Hello folks!

This is part of my attempt at trying to meet my goals for 2017 and pursuit for self-improvement and learning how to think a bit clearer in investing, in dealing with my own thoughts and with people.

I came across the art of thinking clearly by Rolf Dobelli recommended by theescapeartist for sometime and has been interested given the clarity of thought and simplicity of ideas that TEA communicates in his posts. Life is simple as we make it out to be.

the art of thinking clearly
rolf dobelli

The purpose of the book is to illustrate various different fallacies in human thinking in the hope that it can help us avoid these mind traps. The book is laid out in short chapters (99 chapters in total), each of 400-500 hundred words to illustrate an idea with relevant examples and evidence. A very easy read given how information is given out in short chunks and you can immediately apply it to your thinking straight away.

So I saw the piece on the Guardian: There’s a disaster much worse than Texas. But no one talks about it. Which following on from reading the book by Dobelli, you learn that large media corporations display traits of cherry picking: choosing stories that matter to them most (Storm in Texas) and selling it as news and disregarding other disasters that may have a much larger magnitude of impact (floods in South Asia). Hardly surprising if you can imagine if you are a American writing the article, the story about the storm and deaths on your side of the land is more personal and right in your backyard and may have immediate impact on your life rather then the floods in Asia.

And then there’s potentially the best advice from the book: The News Illusion: Why you shouldn’t read the News. One, most news hardly matter. Two, news is a waste of time. Three and lastly, our brains react to news; stimulated by shocking ones (Brexit; Twin Towers; Charlies Gard) and sedated by complex information (Ads, Changes to Tax rules). Together, Rolf suggests that living a news-free world would help us build a clearer mind based on seeing what’s actually around us, listening to others and reading books and articles with more thought to it.

And there are some good mindfulness for the investor’s philosophy:

  • Decision Fatigue: Making decisions is mentally exhausting; Keeping investing simple and eliminate as many decisions that you have to make as much as possible
  • Survival Bias: We tend to overestimate success as we only hear stories of people who succeed. Perhaps we should try to look for the failures before the success and not disregard the people who failed for they have a certain courage to try anyway.
  • Cognitive Dissonance: Our minds reinterpret the situation in hindsight of a failure to convince ourselves otherwise. A sweet lie we tell ourselves.
  • Outcome Bias: We should never judge a decision by its result. A bad result does not necessary indicate a bad decision and vice versa.
  • The paradox of choice: More choices does not necessarily lead to better decisions. In choosing a life partner or perhaps in choosing which stock to buy. Good enough is good enough.

I think it will take me some more time to restudy this book and recognize the meanings behind each fallacy to the point where I can point it out in daily life.

In fact, I have been guilty of the Confirmation Biaswhen my boss told me I have been trying to fit in the test results of a patient with a particular diagnosis I had in mind. Ah well, human minds how complex.

Perhaps reading less news from now on will help.

-FIREplanter