Think Twice

**Author:** Michael J. Mauboussin **Estimated Reading Time:** 45 minutes

### What You'll Learn

Why intelligent, experienced people make avoidable mistakes in judgment, and how understanding the hidden machinery of your own mind can dramatically improve your decisions. You will learn to recognize the mental shortcuts that lead you astray, distinguish between situations where intuition works and where it fails, and build practical strategies for thinking more clearly about complex problems.

### Who This Book Is For

This book is for anyone who makes consequential decisions under uncertainty. That includes investors, executives, doctors, lawyers, entrepreneurs, and anyone who has ever looked back at a choice and wondered what they were thinking. If you suspect that being smart is not always enough to avoid being wrong, this book will show you why and what to do about it.

The most dangerous phrase in decision making is not "I don't know." It is "I know." And the people most likely to utter it are often the smartest people in the room. Michael Mauboussin has spent his career studying why intelligent, well-educated, highly motivated people make decisions that turn out badly. As an investment strategist and professor, he has watched brilliant analysts fall into the same traps repeatedly. He has observed skilled doctors misdiagnose patients, experienced executives launch doomed products, and sophisticated investors pile into bubbles. The pattern is always the same: the smarter the person, the more elaborate the rationalization for a decision that was flawed from the start. The problem is not a lack of intelligence. It is not a lack of information. The problem is that our brains come with factory settings that were designed for a world that no longer exists. For most of human history, survival depended on quick judgments. Was that rustling in the grass a predator or just the wind? Was that stranger friend or foe? Our ancestors could not afford to gather data, run statistical analyses, and deliberate for hours. They needed answers immediately, and the brain evolved to provide them. It developed shortcuts, rules of thumb, and pattern recognition systems that worked well enough most of the time. Those shortcuts are still running today. They operate automatically, below the level of conscious awareness. They shape what we notice, how we interpret information, and what we decide. And in the modern world of financial markets, medical diagnoses, business strategy, and complex social systems, they often lead us badly astray. Consider a simple example. If someone asks you whether more words in the English language start with the letter K or have K as their third letter, what does your mind do? Most people immediately try to think of words starting with K. Kite, kangaroo, kitchen. Those…