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Making better decisions

Making better decisions

Embrace uncertainty

In private life as well as in business we need to make many decisions on a daily basis. As humans we tend to over estimate our ability to predict the future outcome of our decisions. We rely on experts opinions, we use data from the past to forecast the future or just rely on our intuition. We forget to acknowledge that chance plays an important factor.

Illusion of control

Illusion of control

We tend to see events as predictable.We have an intense desire to have control over our environment. Our quest to certainty leads us to believe that experts (like fund managers) to see in the future and we are not. There is no shortage of people who claim they can help. Greed, fear and hope make our rational intensions disappear. Succes or failure is the sum of our own actions plus chance.

We fall victim to a common trap: We oversample succes and under sample failure.

 

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