Decision-making: skill and luck, knowns and unknowns, and importance and unimportance
Wisdom
One piece of wisdom that motivates, encourages and empowers you to grow.
“Truly successful decision-making relies on a balance between deliberate and instinctive thinking.” –Malcolm Gladwell
Insight
One insight that helps you deeply understand a situation, idea, or concept.
Dimensions of Decision-Making
The three key dimensions of decision-making are skill and luck, knowns and unknowns, and importance and unimportance.
1. Skill and Luck
Skill and luck both influence virtually every outcome, and good decision-makers understand the interplay between the two and think probabilistically when faced with uncertainty while being mindful of the limitations of techniques like derivatives and scenario planning in predicting probability distributions of outcomes.
2. Knowns and Unknowns
The distinction between knowns and unknowns is crucial in decision-making as uncertainty is a fact of life and the best decision-makers try to estimate the probability distribution of outcomes to make the best possible decision, and by sticking to what we know and understand, we can avoid investing in situations that we don't have experience with, lowering our failure rate.
3. Importance and Unimportance
Not all decisions carry equal weight, and while we make countless decisions every day, some may be insignificant and ultimately have little impact on our lives, while others, such as choosing a career path or making a major investment, are truly important and require careful consideration and a thoughtful approach.
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Living Legend
One inspiring story of a famous person who is still living for doing something extremely well.
Warren Buffet
Warren Buffett, the chairman and CEO of Berkshire Hathaway, is renowned for his sharp mind, disciplined investment approach, and consistent market-beating returns.
In 1964, despite American Express facing a major scandal, Buffett invested $13 million of Berkshire Hathaway's funds into the company. His belief in the company's strong brand reputation and loyal customer base paid off handsomely when the company rebounded, and its stock price soared. This investment is described as one of the most successful of his career.
Buffett's investment philosophy centers around long-term value investing, avoiding short-term trades, and buying high-quality companies at a fair price, holding them for the long term. His approach has earned him a net worth of over $100 billion, inspiring many investors and business leaders to adopt intelligence, discipline, and a long-term mindset for personal and professional success.
Final Thought
One question for you to ponder and think carefully about.
"A year from now, if I decide to do X, what might this look like?"
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Cheers,
Ben Mumme
Founder and CEO of Living Your Greatness
Ps. If you watch one thing today, watch this response by Giannis Antetokounmpo.
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