{"id":54193,"date":"2021-11-05T23:30:00","date_gmt":"2021-11-06T03:30:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=54193"},"modified":"2021-11-15T14:43:57","modified_gmt":"2021-11-15T18:43:57","slug":"making-better-decisions-2","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/making-better-decisions-2\/","title":{"rendered":"Three Keys to Making Better Decisions in Life"},"content":{"rendered":"\n

Why is making better decisions<\/a> important? How do you make better choices<\/a>?<\/p>\n\n\n\n

You will become better at human relations, investing, and leadership when you start making better decisions. The secrets to making good choices are discipline, learning from the mistakes of others<\/a>, and curbing ideological bias in favor of objectivity. <\/p>\n\n\n\n

Read more about the secrets to making better decisions.<\/p>\n\n\n\n\n\n\n\n

Have Discipline in Choosing Good Ideas<\/strong><\/h2>\n\n\n\n

After collecting more information and trying to be as objective as possible, you then need to make actual decisions. Making better decisions involves making few, high-quality decisions with discipline, instead of chasing too many seemingly promising ideas<\/strong>.<\/p>\n\n\n\n

Warren Buffett articulated the process of making better decisions as follows\u2014if you were given only twenty possible investments in your lifetime, you would be much more successful as an investor<\/strong>. You\u2019d be forced to think through each investment very carefully, and if you saw a good opportunity, you\u2019d bet big. In contrast, typical investors make far too many careless bets, knowing that they have unlimited opportunities to make up losses.<\/p>\n\n\n\n

Li Lu, a fundamental investor and a disciple of Warren Buffett, describes the process of making better decisions with a baseball analogy: \u201cTed Williams is the only baseball player who had a .400 single-season hitting record in the last seven decades. In The Science of Hitting<\/em>, he explained his technique. He divided the strike zone into seventy-seven cells, each representing the size of a baseball. He would insist on swinging only at balls in his \u2018best\u2019 cells, even at the risk of striking out, because reaching for the \u2018worst\u2019 spots would seriously reduce his chances of success. As a securities investor, you can watch all sorts of business propositions in the form of security prices thrown at you all the time. For the most part, you don\u2019t have to do a thing other than be amused. Once in a while, you will find a \u2018fat pitch\u2019 that is slow, straight, and right in the middle of your sweet spot. Then you swing hard.\u201d<\/p>\n\n\n\n

Surprisingly, the worst risk often isn\u2019t chasing bad ideas<\/strong>\u2014bad ideas are relatively obvious and they\u2019re hard to overdo. It\u2019s the seemingly \u2018good\u2019 ideas with some attractive kernel of truth that are dangerous, because you can easily overdo them. <\/strong><\/p>\n\n\n\n