[sei]

[the genius filter]

The Bias That Blinds You

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Charlie Munger believed that most mistakes aren't random; they're predictable.

In June 1995, he gave a now-legendary talk at Harvard called The Psychology of Human Misjudgment. In it, he offered a precise breakdown of the mental errors that derail people and destroy companies.

Munger dissected human nature. He named the biases and mapped the patterns that lead to misjudgment, and showed how they quietly wreak havoc when left unchecked.

Speaking to some of the brightest minds in the world, his conclusion was astoundingly humble:
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​We don’t fail because we’re dumb, we fail because we’re human.

This issue breaks down five of Munger’s most enduring mental models and why learning how we misthink is often the smartest move we can make.

[the spark]

Name the Bias Before It Becomes You

Bad calls. Dumb deals. Broken marriages. Wrecked reputations. Munger saw the same patterns show up again and again, not just in others, but in himself.

In his Harvard talk, Munger laid out the mental traps that sink even the smartest people. Not to diagnose, but to defend. He gave names to the forces that distort decisions:

Reward Bias​
Munger found that people actually bend reality to fit incentives. If someone is rewarded for a certain outcome, their judgment will tilt in that direction, even if they believe they’re being objective.

Social Proof​
“Everybody’s doing it” is more persuasive than we admit. In moments of uncertainty or pressure, people default to imitation.

Availability Bias
​The brain favors what’s easy to recall, not what’s most relevant. If something is vivid, recent, or emotionally charged, we overvalue it.

Inconsistency Avoidance​
Once we say something, we stick to it, often irrationally. Munger compared the human mind to an egg: once a belief gets in, it locks the door behind it.

Stress Denial
​Pain makes us lie to ourselves first. When a truth feels unbearable, the mind bends it until it’s livable. Munger called this “simple psychological denial.”

Each one of these tendencies is subtle on its own, but a lethal package when they stack.

Munger's goal in identifying them was clarity, not comfort. You can’t outthink your brain’s wiring, but you can watch it, learn, and adapt.

Start by calling it what it is.

[the science]
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Why Bias Feels Like Truth

In 2021, cognitive scientists Lingyun Wang and colleagues ran a simple experiment. They showed people random shapes. Some were tied to rewards. Others were linked to the word “self.”

Participants responded faster and more accurately to the ones tied to money or identity. But when shapes were linked to both? Their brains lit up.

Wang’s study proved what Munger knew from experience: reward and self-relevance don’t just influence decisions—they warp them. These cues sneak past logic, shape perception, and feel like truth.

That’s what makes bias dangerous. You don’t see it. You feel certain. And that certainty hardens into commitment. The decisions that come next might feel rational. But they aren’t.

The science confirms it: rewards change what we notice, how we think, and what we believe. Which is exactly how misjudgments take root. Quieting that distortion starts with spotting the pattern.

[the takeaways]

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1) Watch the Incentives​
​Munger said he underestimated the power of incentives his entire life. Wang’s study showed why. When rewards enter the frame, perception bends. If you don’t account for that bias, it will account for you.

2) Certainty Is a Red Flag​
​Reward bias, social proof, and consistency tendencies tend to create conviction. The stronger you feel, the more likely you’re being fooled. Certainty should make you slow down and look deep.

3) Check Your Story​
​The stories we tell ourselves (“I’m a loyal person,” “This is a sure thing,” “Everyone else agrees”) aren’t neutral. They cement commitment, drown out disconfirming signals, and lock in flawed conclusions.

4) Patterns Are Plain to See​
​Munger didn’t theorize, he tracked errors. One by one. The point isn’t to outthink the bias, just notice when it shows up. If you can name it, you can catch it. If you can catch it, you can course-correct.

5) Make Room for Doubt​
​Awareness doesn’t cancel bias, but it will weaken its grip. Like Wang’s participants, the second you step outside the rush of reward and identity, you start seeing things more clearly. That’s where good judgment begins.