Charlie Munger: The Psychology of Human Misjudgment [Outliers]

I came to the psychology of human misjudgment almost against my will. I rejected it until I realized that my attitude was costing me a lot of money and reduced my ability to help everything I love. That's a quote by Charlie Munger, and that's what we're gonna talk about today. This psychology of human misjudgment. Welcome to the Knowledge Project. I'm your host, Shane Parrish.

This podcast is all about learning from others, mastering the best of what they figured out, so you can use their lessons in your life. Charlie Munger was a lawyer from Omaha who taught himself psychology because Harvard Law School refused to. Munger was the partner of Warren Buffett, and together they created one of the best track records the world has ever seen. And they use psychology to do it. In nineteen ninety five, Munger formalized what he'd learned into a speech at Harvard. He called it the psychology of human misjudgment.

And in it, he identified twenty-four psychological tendencies that cause systematic errors in thinking. Ten years later, at age eighty one, he rewrote it from memory, expanding it to twenty five tenancies. I published the full updated version on FS.blog with his personal permission. We're the only website, to my knowledge, that has this permission to post it. I'll put the link in the description. The psychology of human misjudgment is one of the most valuable frameworks for understanding human behavior. ever created. It's Munger's map of how your brain systematically fools you and how to fight back.

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