Shane Parrish – Learning to Learn at Farnam Street (Capital Allocators, EP.164)

Decision Making

Shane Parrish emphasizes the importance of structured decision-making, highlighting the difference between speed and velocity. He argues that velocity, which includes direction, is more valuable than mere speed in decision-making processes 1. Shane shares his personal journey of improving his decision-making skills, which began with a challenging experience at a young age. He recalls a pivotal moment when he realized the need for better judgment and took it upon himself to learn from others and seek out knowledge 2.

Often we're going for speed when we should be going for velocity. The difference is velocity has a direction and a vector attached to it, and speed doesn't.

--- Shane Parrish

Shane's approach includes learning from experts and developing a course called "Decision by Design," which offers practical skills for effective decision-making 1.

   

Inversion Models

In discussing decision-making models, Shane introduces the concept of inversion, inspired by Charlie Munger. This model focuses on identifying and avoiding negative outcomes to ensure positive results 3. Shane also explores Hanlon's Razor, which encourages interpreting others' actions with the most respectful explanation rather than assuming malice. He believes that understanding different perspectives can lead to more effective decision-making 3.

Tell me where you're going to die and you don't want to go there, right? So that was the original concept of inversion that I got from Munger.

--- Shane Parrish

Additionally, Shane discusses the value of delayed gratification and second-order thinking, which involves considering long-term benefits over immediate rewards 4.