I try to regularly read John Mauldin's weekly columns. In addition to his weekly though, he works to highlight an article each week from another analyst and this week's struck as extremely insightful. Check it out here:
InvestorsInsight : John Mauldin's Outside the Box
To summarize though, James Montier takes the stance that most of us are terrible at learning from past mistakes. He uses some interesting study data to make four supporting points:
"Firstly, we often fail to recognize our mistakes because we attribute
them to bad luck rather than poor decision making. Secondly, when we are looking
back, we often can't separate what we believed beforehand from what we now know.
Thirdly, thanks to the illusion of control, we often end up assuming outcomes
are the result of our actions. Finally, we are adept at distorting the feedback
we do receive, so that it fits into our own view of our abilities.
While this is all in the context of investing, really, I think it's a valuable lesson for all of us throughout our lives. We need to be aware of how poor we are at assessing our decision making and work on it. Personal, professional, what have you, try to examine the decisions that you've made the outcomes that they resulted in and how you can learn from them. Work to be more honest at it over time.
Make it a habit.I think we'd all gain a lot from working on just that, and that alone.
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decision making,
learning from mistakes,
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