It is a tendency to interpret new information so that it becomes compatible with our existing theories.Warren Buffet has seen people losing money with this because they ignore facts that contradict the theory in the mind of the investor.Disconfirming evidence must be sought out to beat this theory.

2. Confirmation bias is the mother of all misconceptions.

99% Fat-Free product seems more healthy than a product with 1% Fat.

7. It is not what you say, but how you say, that's important. 

Send an email to 10,000 people with the stock market predictions by dividing them into 2 groups - telling reverse prediction to each group. Prediction for one of the groups will come true.Send a new prediction to the 5,000 whom you predicted correctly earlier - again after dividing them into 2 groups...carry on like this, and the last 100 would consider you as a genius. People get inducted into a decision based on history without thinking logically.

4. Induction

Follow your passion even if you have to do away with part of your income for that

9. Passion 

When it comes to compounding, don't trust your intuition - you have no idea how powerful it is.

6. Compounding

The fear of losing something motivates people more than the prospect of gaining something of equal value.

5. Loss Aversion 

Whenever you are dealing with averages, be careful of the distribution behind them. A Bill Gates monthly income in a group of 50 ordinary citizens can give an extremely misleading average.

10. Averages

If you ever find yourself in a tight unanimous group, you must speak your mind, even if your team does not like it, and even if it means risking expulsion from the warm nest.And if you lead a group, appoint someone as devil's advocate.He or she will not be the most popular member of the team, but definitely the most important.

 3. Speak your mind

Never underestimate the hard work and lower probability of success, just because we are shown more successful people than many more actual failures.It does not mean, in any way, that you should not dream big. It just says that don't get overawed by the number of success stories you read and assume that success would be easy. No one prints the failure stories.

1. Hard Work

There is no 3rd category of passive onlookers.

8. If you are not a part of the solution, you are definitely a part of the problem.

10 Powerful Lessons of the book “The Art of Thinking Clearly” 

A world-class thinker counts the 100 ways in which humans behave irrationally, showing us what we can do to recognize and minimize these “thinking errors” to make better decisions and have a better life Despite the best of intentions, humans are notoriously bad—that is, irrational—when it comes to making decisions and assessing risks and tradeoffs. Psychologists and neuroscientists refer to these distinctly human foibles, biases, and thinking traps as “cognitive errors.” Cognitive errors are systematic deviances from rationality, from optimized, logical, rational thinking and behavior. We make these errors all the time, in all sorts of situations, for problems big and small: whether to choose the apple or the cupcake; whether to keep retirement funds in the stock market when the Dow tanks, or whether to take the advice of a friend over a stranger. The “behavioral turn” in neuroscience and economics in the past twenty years has increased our understanding of how we think and how we make decisions. It shows how systematic errors mar our thinking and under which conditions our thought processes work best and worst. Evolutionary psychology delivers convincing theories about why our thinking is, in fact, marred. The neurosciences can pinpoint with increasing precision what exactly happens when we think clearly and when we don’t. Drawing on this wide body of research, The Art of Thinking Clearly is an entertaining presentation of these known systematic thinking errors--offering guidance and insight into everything why you shouldn’t accept a free drink to why you SHOULD walk out of a movie you don’t like it to why it’s so hard to predict the future to why shouldn’t watch the news. The book is organized into 100 short chapters, each covering a single cognitive error, bias, or heuristic. Examples of these concepts include: Reciprocity, Confirmation Bias, The It-Gets-Better-Before-It-Gets-Worse Trap, and the Man-With-A-Hammer Tendency. In engaging prose and with real-world examples and anecdotes, The Art of Thinking Clearly helps solve the puzzle of human reasoning.

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Personal Development

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Money & Investments

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Books

A world-class thinker counts the 100 ways in which humans behave irrationally, showing us what we can do to recognize and minimize these “thinking errors” to make better decisions and have a better life Despite the best of intentions, humans are notoriously bad—that is, irrational—when it comes to making decisions and assessing risks and tradeoffs. Psychologists and neuroscientists refer to these distinctly human foibles, biases, and thinking traps as “cognitive errors.” Cognitive errors are systematic deviances from rationality, from optimized, logical, rational thinking and behavior. We make these errors all the time, in all sorts of situations, for problems big and small: whether to choose the apple or the cupcake; whether to keep retirement funds in the stock market when the Dow tanks, or whether to take the advice of a friend over a stranger. The “behavioral turn” in neuroscience and economics in the past twenty years has increased our understanding of how we think and how we make decisions. It shows how systematic errors mar our thinking and under which conditions our thought processes work best and worst. Evolutionary psychology delivers convincing theories about why our thinking is, in fact, marred. The neurosciences can pinpoint with increasing precision what exactly happens when we think clearly and when we don’t.Drawing on this wide body of research, The Art of Thinking Clearly is an entertaining presentation of these known systematic thinking errors--offering guidance and insight into everything why you shouldn’t accept a free drink to why you SHOULD walk out of a movie you don’t like it to why it’s so hard to predict the future to why shouldn’t watch the news. The book is organized into 100 short chapters, each covering a single cognitive error, bias, or heuristic. Examples of these concepts include: Reciprocity, Confirmation Bias, The It-Gets-Better-Before-It-Gets-Worse Trap, and the Man-With-A-Hammer Tendency. In engaging prose and with real-world examples and anecdotes, The Art of Thinking Clearly helps solve the puzzle of human reasoning.

Rolf Dobelli is a Swiss author and businessman. He began his writing career as a novelist in 2002, but he is best known internationally for his bestselling non-fiction The Art of Thinking Clearly (2011, English 2013), for which The Times has called him "the self-help guru the Germans love".

3. Speak your mind

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