Weekly I/O: How magicians control your decisions, Identify potential strengths instead of flaws, Personal rules
#75: Magician's Choice, Spot Strengths over Flaws, Personal Rules, Know to Diversify Less, Luxury and Necessity
Hi friends,
Greetings from San Francisco!
Here's your weekly dose of I/O. I hope you enjoy it!
Input
Here's a list of what I'm exploring and pondering on this week.
1. Magician's Choice: How magicians manipulate you to choose the card they want you to choose through equivocation.
Article: Magician's Choice
The "Magician's Choice", or "Equivocation", is a psychological technique commonly used in magic tricks, especially in mentalism and choice-based illusions. This technique creates an illusion for the audience, making them believe they have a free choice, while the magician subtly ensures a specific outcome.
Imagine a magician presenting three cards, A, B, and C, aiming to make you, the audience, choose card A. You are asked to select two cards, and the magician will act according to your choice.
If you pick cards B and C, the magician will eliminate these two and say the remaining card, A, is your decision.
However, if you pick cards A and B, the magician will eliminate card C and ask you to select one of the remaining two cards. Then, if you choose card A, that will be your final selection. But if you pick card B, the magician will discard it, and the remaining A becomes your chosen card. It doesn't matter what you select; you will always end up with A.
The Magician's Choice utilizes the "information gap" between what the audience knows and what they think they know. As long as the tactic isn't repeated, which can shorten the information gap, almost everyone can be convinced they have a free choice.
Multiple Outs is another trick that creates an illusion that the magician can predict the audience's choice.
2. While identifying flaws triggers critical thinking, spotting potential strengths fuels our creative instincts. Therefore, arguing for something we don't believe can enhance creativity.
Nolan Bushnell, the co-founder of Atari, has a trick for enhancing creativity:
"I would ask everyone to make a list of all the ideas that have been presented at our meetings and then have them rank those ideas from good to bad. I would then take the six items on the bottom of the list and say, let's suppose we were restricted for the next few months to work on just these six terrible projects. How do we make them work?"
While identifying flaws in an idea triggers our critical thinking, spotting potential strengths fuels our creative instincts. In essence, Bushnell's method flips our typical thought processes by promoting creativity over criticism.
Similarly, in debates, one must learn to debate both sides of any proposition. Arguing for something you don't believe can reshape your worldview and help you see issues you had not been able to see before.
3. Personal rules turn desired behaviors into default behaviors. They are set during our best moments to avoid making poor decisions under pressure or during moments of weakness.
Daniel Kahneman, psychologist, Nobel Laureate, and the founding father of modern behavioral economics, explains how rules guide behaviors:
"I learned over the years that people don't argue with rules. We've been taught our whole lives to follow the rules, but we've never thought of how to create rules for ourselves that we just follow when we're at our worst.
We all know no matter how bad our day is, we shouldn't speed on the highway because it's against the rules. What we don't think about is how do we use rules to our advantage?"
Implementing personal rules turns our desired behaviors into default behaviors. Therefore, the rules we set during our best moments can help us avoid making unwise decisions under pressure or during moments of weakness.
For instance, one of Kahneman's rules is to never say 'Yes' over the phone. He explained this rule helps avoid regrettable commitments influenced by social pressure or the innate desire to please others.
In the podcast, Tim and Shane also shared some personal rules that I found interesting:
Avoid reading new books for a year.
Do any form of exercise every day regardless of intensity.
Accept speaking engagements only if it's free or with an amount higher than he ever had.
Schedule no meetings before noon.
Say "No" if anyone tries to rush me into a decision in emails or phone calls. It's not just postponing giving an answer. The answer is "No".
4. "The more you know, the less you diversify." - Naval
Quote
This quote reminds me of what Warren Buffett said at the 1996 Berkshire Hathaway Annual Meeting:
"We like to put a lot of money in things that we feel strongly about. And that gets back to the diversification question.
We think diversification, as practiced generally, makes very little sense for anyone that knows what they're doing.
Diversification is a protection against ignorance.
I mean, if you want to make sure that nothing bad happens to you relative to the market, you own everything. There's nothing wrong with that. That is a perfectly sound approach for somebody who does not feel they know how to analyze businesses.
If you know how to analyze businesses and value businesses, it's crazy to own 50 stocks or 40 stocks or 30 stocks, probably, because there aren't that many wonderful businesses that are understandable to a single human being, in all likelihood."
That said, knowing how to analyze businesses is hard, and one should understand what makes them qualified to give up the only free lunch in investing.
5. "Luxury is a necessity that begins where necessity ends." - CoCo Chanel
Quote
This is how CoCo Chanel defines luxury, which is quite poetic compared to the two definitions I noted before, luxury is art that happens to have a little bit of functionality, and luxury purchases symbolize the buyer's ability to afford items beyond practical necessities.
Photo of the Week
That's it. Thanks for reading. Please share which input you found the most helpful or intriguing. Just reply to this email with a number—it's quick and easy!
And as always, feel free to send me any interesting ideas you came across recently!
Looking forward to learning from you.
Cheers,
Cheng-Wei