Daniel Kahneman Quotes - Page 5

You should not take your intuitions at face value.

The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the [investment management] industry.

That's one of the real dangers of leader selection in many organizations: leaders are selected for overconfidence.

Ten minutes of a smartphone in front of your nose is about the equivalent of an hour long walk in bright daylight. Imagine going for an hour long walk in bright daylight and then thinking, "Now I'll get some sleep." It ain't going to happen.

Finally, the illusions of validity and skill are supported by a powerful professional culture. We know that people can maintain an unshakeable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers. Given the professional culture of the financial community, it is not surprising that large numbers of individuals in that world believe themselves to be among the chosen few who can do what they believe others cannot.

This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.

Knowing the importance of luck, you should be particularly suspicious when highly consistent patterns emerge from the comparison of successful and less successful firms. In the presence of randomness, regular patterns can only be mirages.

We have no reason to expect the quality of intuition to improve with the importance of the problem. Perhaps the contrary: high-stake problems are likely to involve powerful emotions and strong impulses to action.

Except for some effects that I attribute mostly to age, my intuitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy as it was before I made a study of these issues.

One of the problems with expertise is that people have it in some domains and not in others.

It is the consistency of the information that matters for a good story, not its completeness. Indeed, you will often find that knowing little makes it easier to fit everything you know into a coherent pattern.

... sometimes when you are asked a question that is difficult, the mind doesn't stay silent if it doesn't have the answer. The mind produces something, and what it produces very characteristically is the answer to an easier but related question.

Most people are highly optimistic most of the time.

Mental effort, I would argue, is relatively rare. Most of the time we coast.

The brain scientists are the wave of the future in the financial world. If you seek to maximize understanding, whether you're in academia or in the investment community, you'd better pay serious attention to them.

Clearly, the decision-making that we rely on in society is fallible. It's highly fallible, and we should know that.

Most successful pundits are selected for being opinionated, because it's interesting, and the penalties for incorrect predictions are negligible. You can make predictions, and a year later people won't remember them.

The dominance of conclusions over arguments is most pronounced where emotions are involved.

I enjoy being active, but I look forward to the day when I can retire to the Internet.

Friends are sometimes a big help when they share your feelings. In the context of decisions, the friends who will serve you best are those who understand your feelings but are not overly impressed by them.

I'm not a great believer in self-help.

When you are under time pressure for a decision, you need to follow intuition.

We are often confident even when we are wrong, and an objective observer is more likely to detect our errors than we are.

If you're going to be unreligious, it's likely going to be due to reflecting on it and finding some things that are hard to believe.

A person who has not made peace with his losses is likely to accept gambles that would be unacceptable to him otherwise.