Daniel kahneman quotes

Most of the moments of our life - and I calculated, you know, the psychological present is said to be about three seconds long; that means that, you know, in a life there are about 600 million of them; in a month, there are about 600,000 - most of them don't leave a trace.

Acquisition of skills requires a regular environment, an adequate opportunity to practice, and rapid and unequivocal feedback about the correctness of thoughts and actions.

The brain scientists are the wave of the future in the financial world. If you seek to maximize understanding, whether you're in academia or in the investment community, you'd better pay serious attention to them.

It's a wonderful thing to be optimistic. It keeps you healthy and it keeps you resilient.

The brains of humans contain a mechanism that is designed to give priority to bad news.

You should not take your intuitions at face value.

To better avoid errors, you should talk to people who disagree with you and you should talk to people who are not in the same emotional situation you are.

It's not a case of: 'Read this book and then you'll think differently. I've written this book, and I don't think differently.

Being wealthy is often a powerful predictor that people spend less time doing pleasurable things and more time doing compulsory things and feeling stressed.

We have no reason to expect the quality of intuition to improve with the importance of the problem. Perhaps the contrary: high-stake problems are likely to involve powerful emotions and strong impulses to action.

Laziness is built deep into our nature.

People exaggerate their confidence in their plans - something we call the planning fallacy... The existence of the plan tends to induce overconfidence.

Although professionals are able to extract a considerable amount of wealth from amateurs, few stock pickers, if any, have the skill needed to beat the market consistently, year after year.

Optimistic people play a disproportionate role in shaping our lives. Their decisions make a difference; they are inventors, entrepreneurs, political and military leaders - not average people. They got to where they are by seeking challenges and taking risks.

If owning stocks is a long-term project for you, following their changes constantly is a very, very bad idea. It's the worst possible thing you can do, because people are so sensitive to short-term losses. If you count your money every day, you'll be miserable.

The idea that the future is unpredictable is undermined every day by the ease with which the past is explained.

Unfortunately, skill in evaluating the business prospects of a firm is not sufficient for successful stock trading, where the key question is whether the information about the firm is already incorporated in the price of the stock. Traders apparently lackthe skill to answer this crucial question, but they appear to be ignorant of their ignorance.

Below an income of ... $60,000 a year, people are unhappy, and they get progressively unhappier the poorer they get. Above that, we get an absolutely flat line. ... Money does not buy you experiential happiness, but lack of money certainly buys you misery.

Most people are highly optimistic most of the time.

In a rising market, enough of your bad ideas will pay off so that you'll never learn that you should have fewer ideas.

True intuitive expertise is learned from prolonged experience with good feedback on mistakes.

To know whether you can trust a particular intuitive judgment, there are two questions you should ask: Is the environment in which the judgment is made sufficiently regular to enable predictions from the available evidence? The answer is yes for diagnosticians, no for stock pickers. Do the professionals have an adequate opportunity to learn the cues and the regularities? The answer here depends on the professionals' experience and on the quality and speed with which they discover their mistakes.

We're generally overconfident in our opinions and our impressions and judgments.

A plan is only a scenario, and almost by definition, it is optimistic... As a result, scenario planning can lead to a serious underestimate of the risk of failure.

Every night for the next week, set aside ten minutes before you go to sleep. Write down three things that went well today and why they went well...Writing about why the positive events in your life happened may seem awkward at first, but please stick with it for one week. It will get easier. The odds are that you will be less depressed, happier, and addicted to this exercise six months from now.

A person who has not made peace with his losses is likely to accept gambles that would be unacceptable to him otherwise.

Our memory tells us stories, that is, what we get to keep from our experiences is a story.

If you can't take the time for a vacation right now, or even a night out with friends, put something on the calendar - even if it's a month or a year down the road. Then whenever you need a boost of happiness, remind yourself about it.

The concept of loss aversion is certainly the most significant contribution of psychology to behavioral economics.

Overconfidence is a powerful source of illusions, primarily determined by the quality and coherence of the story that you can construct, not by its validity.

We don’t choose between experiences, we choose between memories of experiences. Even when we think about the future, we don’t think of our future normally as experiences. We think of our future as anticipated memories.

A general “law of least effort” applies to cognitive as well as physical exertion. The law asserts that if there are several ways of achieving the same goal, people will eventually gravitate to the least demanding course of action. In the economy of action, effort is a cost, and the acquisition of skill is driven by the balance of benefits and costs. Laziness is built deep into our nature.

Money does not buy you happiness, but lack of money certainly buys you misery.

It's nonsense to say money doesn't buy happiness, but people exaggerate the extent to which more money can buy more happiness.

The evidence is unequivocal, there's a great deal more luck than skill in people getting very rich.

If there is time to reflect, slowing down is likely to be a good idea.

The 'Instagram Generation' now experiences the present as an anticipated memory

It doesn't take many observations to think you've spotted a trend, and it's probably not a trend at all.

Spend some effort in figuring out why each decision did or did not pan out. Doing that systematically is key: really try to question the way you make decisions, and improve it.

Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.

The psychologist, Paul Rozin, an expert on disgust, observed that a single cockroach will completely wreck the appeal of a bowl of cherries, but a cherry will do nothing at all for a bowl of cockroaches.

I have always believed that scientific research is another domain where a form of optimism is essential to success: I have yet to meet a successful scientist who lacks the ability to exaggerate the importance of what he or she is doing, and I believe that someone who lacks a delusional sense of significance will wilt in the face of repeated experiences of multiple small failures and rare successes, the fate of most researchers.

When people believe a conclusion is true, they are also very likely to believe arguments that appear to support it, even when these arguments are unsound.

Researchers who studied a thousand Dutch vacationers concluded that by far the greatest amount of happiness extracted from the vacation is derived from the anticipation period.

If you care about being thought credible and intelligent, do not use complex language where simpler language will do.

Experts don't know exactly where the boundaries of their expertise are.

If there was one ubiquitous recommendation about marriage it was this: "Don't go to bed angry."

The easiest way to increase happiness is to control your use of time.

Economists think about what people ought to do. Psychologists watch what they actually do.

Finally, the illusions of validity and skill are supported by a powerful professional culture. We know that people can maintain an unshakeable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers. Given the professional culture of the financial community, it is not surprising that large numbers of individuals in that world believe themselves to be among the chosen few who can do what they believe others cannot.

The dominance of conclusions over arguments is most pronounced where emotions are involved.

A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth. Authoritarian institutions and marketers have always known this fact.

That's one of the real dangers of leader selection in many organizations: leaders are selected for overconfidence.

People like leaders who look like they are dominant, optimistic, friendly to their friends, and quick on the trigger when it comes to enemies. They like boldness and despise the appearance of timidity and protracted doubt.

If individuals are rational, there is no need to protect them against their own choices.

The illusion that we understand the past fosters overconfidence in our ability to predict the future.

What happens with fear is that probability doesn't matter very much. That is, once I have raised the possibility that something terrible can happen to your child, even though the possibility is remote, you may find it very difficult to think of anything else. Emotion becomes dominant.

It is the consistency of the information that matters for a good story, not its completeness. Indeed, you will often find that knowing little makes it easier to fit everything you know into a coherent pattern.

One of the major biases in risky decision making is optimism. Optimism is a source of high-risk thinking.

Odd as it may seem, I am my remembering self, and the experiencing self, who does my living, is like a stranger to me.

The amount of success it takes for leaders to become overconfident isn't terribly large.

In essence, the optimistic style involves taking credit for successes but little blame for failures.

Alternative descriptions of the same reality evoke different emotions and different associations.

Except for some effects that I attribute mostly to age, my intuitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy as it was before I made a study of these issues.

Survival prospects are poor for an animal that is not suspicious of novelty.

The effort invested in 'getting it right' should be commensurate with the importance of the decision.

Poverty is clearly one source of emotional suffering, but there are others, like loneliness. A policy to reduce the loneliness of the elderly would certainly reduce suffering.

We are far too willing to reject the belief that much of what we see in life is random.

An investment said to have an 80% chance of success sounds far more attractive than one with a 20% chance of failure. The mind can't easily recognize that they are the same.

If people can construct a simple and coherent story, they will feel confident regardless of how well grounded it is in reality.

We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events.

We deeply want to be led by people who know what they're doing and who don't have to think about it too much.

I would not advise people to buy a car or house without making a list. You will probably improve your intuitions by making a list and then sleeping on it.

People who face a difficult question often answer an easier one instead, without realizing it.

There are domains in which expertise is not possible. Stock picking is a good example. And in long-term political strategic forecasting, it's been shown that experts are just not better than a dice-throwing monkey.

When action is needed, optimism, even of the mildly delusional variety, may be a good thing.

Experienced happiness refers to your feelings, to how happy you are as you live your life. In contrast, the satisfaction of the remembering self refers to your feelings when you think about your life.

However, optimism is highly valued, socially and in the market; people and firms reward the providers of dangerously misleading information more than they reward truth tellers. One of the lessons of the financial crisis that led to the Great Recession is that there are periods in which competition, among experts and among organizations, creates powerful forces that favor a collective blindness to risk and uncertainty.

Knowing the importance of luck, you should be particularly suspicious when highly consistent patterns emerge from the comparison of successful and less successful firms. In the presence of randomness, regular patterns can only be mirages.

After a crisis we tell ourselves we understand why it happened and maintain the illusion that the world is understandable. In fact, we should accept the world is incomprehensible much of the time.

The confidence people have in their beliefs is not a measure of the quality of evidence but of the coherence of the story the mind has managed to construct.

The most effortful forms of slow thinking are those that require you to think fast.

One study found that people who just thought about watching their favorite movie actually raised their endorphin levels by 27 percent.

The average investor's return is significantly lower than market indices due primarily to market timing.

People have little idea, by and large, of the investment world. They are convinced they have an advantage.

People are really happier with friends than they are with their families or their spouse or their child.

You know, the standard state for people is 'mildly pleasant.' Negative emotions are quite rare, and extremely positive emotions are rare. But people are mildly pleased most of the time, they're mildly tired a lot of the time, and they wish they were somewhere else a substantial part of the time - but mostly they're mildly pleased.

Some achieve a reputation for great successes when in fact all they have done is take chances that reasonable people wouldn't take.

Establish a closing ritual. Know when to stop working. Try to end each work day the same way, too. Straighten up your desk. Back up your computer. Make a list of what you need to do tomorrow.

Mind is a machine for jumping to conclusions

In strategic decisions, I'd be really concerned about overconfidence.

... sometimes when you are asked a question that is difficult, the mind doesn't stay silent if it doesn't have the answer. The mind produces something, and what it produces very characteristically is the answer to an easier but related question.

Optimism is normal, but some fortunate people are more optimistic than the rest of us. If you are genetically endowed with an optimistic bias, you hardly need to be told that you are a lucky person - you already feel fortunate.

We can't live in a state of perpetual doubt, so we make up the best story possible and we live as if the story were true.

Clearly, the decision-making that we rely on in society is fallible. It's highly fallible, and we should know that.

Many ideas happen to us. We have intuition, we have feeling, we have emotion, all of that happens, we don't decide to do it. We don't control it.

If you're going to be unreligious, it's likely going to be due to reflecting on it and finding some things that are hard to believe.

I'm not a great believer in self-help.

People assign much higher probability to the truth of their opinions than is warranted.

Slow thinking has the feeling of something you do. It's deliberate.

Happiness is determined by factors like your health, your family relationships and friendships, and above all by feeling that you are in control of how you spend your time.

Nothing in life is quite as important as you think it is while you're thinking about it.

Doubting what you see is a very odd experience. And doubting what you remember is a little less odd than doubting what you see. But it's also a pretty odd experience, because some memories come with a very compelling sense of truth about them, and that happens to be the case even for memories that are not true.

This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.

If people are failing, they look inept. If people are succeeding, they look strong and good and competent. That's the 'halo effect.' Your first impression of a thing sets up your subsequent beliefs. If the company looks inept to you, you may assume everything else they do is inept.

I have always emphasized the willingness to discard.

People tend to assess the relative importance of issues by the ease with which they are retrieved from memory—and this is largely determined by the extent of coverage in the media. Frequently mentioned topics populate the mind even as others slip away from awareness. In turn, what the media choose to report corresponds to their view of what is currently on the public’s mind. It is no accident that authoritarian regimes exert substantial pressure on independent media. Because public interest is most easily aroused by dramatic events and by celebrities, media feeding frenzies are common

The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the [investment management] industry.

Adaptation seems to be, to a substantial extent, a process of reallocating your attention.

So your emotional state really has a lot to do with what you're thinking about and what you're paying attention to.

All of us would be better investors if we just made fewer decisions.

I enjoy being active, but I look forward to the day when I can retire to the Internet.

When everybody in a group is susceptible to similar biases, groups are inferior to individuals, because groups tend to be more extreme than individuals.

Facts that challenge basic assumptions-and thereby threaten people's livelihood and self-esteem-are simply not absorbed. The mind does not digest them.

Intelligence is not only the ability to reason; it is also the ability to find relevant material in memory and to deploy attention when needed.

The planning fallacy is that you make a plan, which is usually a best-case scenario. Then you assume that the outcome will follow your plan, even when you should know better.

Human beings cannot comprehend very large or very small numbers. It would be useful for us to acknowledge that fact.

People's mood is really determined primarily by their genetic make-up and personality, and in the second place by their immediate context, and only in the third and fourth place by worries and concerns and other things like that.

Ten minutes of a smartphone in front of your nose is about the equivalent of an hour long walk in bright daylight. Imagine going for an hour long walk in bright daylight and then thinking, "Now I'll get some sleep." It ain't going to happen.

One of the problems with expertise is that people have it in some domains and not in others.

We can be blind to the obvious, and we are also blind to our blindness.

Often, the most enjoyable part of an activity is the anticipation.

We have a very narrow view of what is going on.

When you analyze happiness, it turns out that the way you spend your time is extremely important.

We're not aware of changing our minds even when we do change our minds. And most people, after they change their minds, reconstruct their past opinion - they believe they always thought that.