The Path of Least Resistance

Can lead to serious mistakes, says Morgan Housel

Morgan Housel is a clear thinker and an exceptional writer. If you haven’t read The Psychology of Money, you probably should.

And you should read his recent blog post Psychological Paths of Least Resistance, which starts with this observation.

“When faced with a problem, rarely do people ask, “What is the best, perfect, answer to this question?”

The more efficient question is often, “What answer to this question can I obtain with the least amount of effort, sacrifice, and mental discomfort?”

The psychological path of least resistance.

Most of the time that’s fine. You use a little intuition and common sense and find a practical answer that doesn’t rack your brain or bog you down with details.

Other times the easy answers lead you down a nasty path of misunderstanding, ignorance, and blindness toward risk.”

Housel then goes on to discuss a few dangerous paths of least resistance, such as:

  • The quick elimination of doubt and uncertainty

  • Single-cause explanations for complex events

  • The justifications of your own actions and the judgment of others’

  • The belief that your own field of vision is the same as everyone else’s

  • The desire to supplant statistics with stories

  • Outsourcing your hard decisions to the opinions of pundits, consultants, and experts of various qualifications

  • Overconfidence as a way of shielding against the uncomfortable fact that the world is driven by probability, not black-and-white certainties

He ends by observing that…

"Being honest about the odds that your opinions and forecasts will come true can be so discouraging and uncomfortable that the warm blanket of denial and over-optimism becomes home to most people’s beliefs."

Here’s the link to go read the whole piece by Morgan Housel. I bookmarked it to reread it because it’s that good.

And in case you’re wondering what this has to do with the 80/20 Principle, it’s this: the better you think, the more likely you are to find and exploit profitable disparities.

And the more likely you are to avoid catastrophic misfortune caused by mental blind spots.

😉

Ernie

P.S. If you're inclined, here are three ways I can help improve your law practice...