BR 106: Thinking, Fast and Slow by Daniel Kahneman

Category: 3 – SHELF it (All Categories are 1 – Read ASAP!, 2 – BUY it!, 3 – SHELF it, 4 – SOMEDAY it)

Comments: This is a legendary book. It should be in the ‘BUY it!’ category but I didn’t put it there for a few reasons –

1. The book is written a bit like a research thesis with very little synthesis. There are hundreds of great lessons, great stories of outcomes from experiments with the kind of insights that you would expect from Nobel laureate. That said, it could have benefited by having a writer help synthesize the many takeaways.

2. The other more personal issue I had is that this book, while comprehensive, felt slightly late in the game. I have been going down the path of understanding the mind and behavior over the past year and found that many of his insights had already been covered by other researchers.

3. It’s not a book that I would recommend to other’s who aren’t math geeks/knee deep in the subject. It is a rather geeky book and I realize not everybody would enjoy it.

4. I found it very difficult to get through. It really depends on why you read books. I generally read books with 2 things in mind – what can I apply in my life? And are there any stories I can use for my blogs, learnings etc?

While I did find a few great stories from the book, it took a lot of effort to figure out what is applicable. The ‘so what’ question wasn’t easily answered. Again, a real researcher’s book. Lots of great content. Just not that easy to discern the applicability in my point of view.

Top 3 Learnings: There were many learnings I took away from the book. Here are the top 3 that come to mind –

1. Our judgments and decision making are always extremely biased. There are too many biases to keep track of and biases are almost always unavoidable. The best thing we can do is to accept these biases that we do have and remind ourselves that we are biased when making big decisions. Just this act of acceptance and awareness could save us a lot of pain.

2. Be careful with trusting experts who use their ‘gut’. Essentially, expertise can be trusted in fields wher the natural behavior is recurring and predictable. The stock market, for example, is one of those fields where the ‘gut’ or ‘expert intuition’ or Kahneman’s system 1 doesn’t work.

3. We have 2 selves – the experiencing self and the remembering self. And, when it comes to experiences, we are almost fully dependent on the remembering self. At the end of the day, if our memory of an experience is great, we remember the experience well.

And what do we remember? We remember the peak and end of an experience. As long as the peak and end are good, our memory of an otherwise bad experience could end up being great!