We welcome LCP's Nikki Matthews to discuss decision making in the investment world.
We discuss:
- Nikki’s Vista article
- Are investors fundamentally decision makers?
- Decision making is often influenced by circumstances and those around us.
- It’s easy to slip into a role.
- (Listen to the podcast that Dan references several times with Jeff Housenbold from the Vision Fund).
-We’re forming a story in our head whenever we meet someone. -
- Subconsciously, we are forming a view and looking for information that you’re right (this is known as confirmation bias).
- It's important to move away from having to be right so you can be more open.
- We’re always very limited in our information both on decisions and on people? Don’t forget that moods influence decisions and we don’t have visibility of how others are feeling.
- Best time to make decisions: before, after lunch? It could influence things more than you think.
- Evening out decisions during the day could help and not trying to make a lot of decisions toward the end.
- Perspective – this matters hugely, our perspective influences us more than we know. There are ways of combatting such as looking for diversity, demographic diversity, background diversity.
- Listen to our podcast reviewing Mathew Syed’s book Rebel Ideas here.
- Your own experiences make up only 0.0001% of what’s happened but probably 80% of the way you think the world works.
- Information asymmetry – there’s always hidden information in a decision and it’s impossible to know everything that other people around the table know.
One thing to take away
Assessing how you make decisions can add a lot of value. Ask yourself: is your decision making body diverse, are you seeing (enough) challenge? Do you always seem to make consensus decisions? Do you record your decisions?
Recommendations
Predictably Irrational (Dan Ariely)
Presence (Patsy Rodenburg)
You might also be interested in previous episodes on Zoomthink and Groupthink.