Tagged “risk”
Entries across every discipline that share this thread.
Circle of Competence
Know the boundary of what you actually understand — and operate inside it.
Mental modelCompounding
Small gains that build on themselves grow slowly, then astonishingly fast.
How to thinkHow to Think About Decisions Under Uncertainty
Judge decisions by the quality of the process, not the outcome — and think in probabilities, not certainties.
How to thinkHow to Think About Risk
Separate the probability of an outcome from the size of its consequences — and respect ruin.
Cognitive biasLoss Aversion
A loss hurts about twice as much as an equivalent gain feels good.
Mental modelMargin of Safety
Build in a buffer so that being wrong — and you will be — doesn't ruin you.
Mental modelOpportunity Cost
The true cost of any choice is the best alternative you gave up to make it.
Mental modelSecond-Order Thinking
Ask "and then what?" — trace the consequences of your consequences before you act.
Cognitive biasSunk-Cost Fallacy
Continuing something because of what you've already spent, not what it's now worth.
Cognitive biasSurvivorship Bias
Judging from the winners you can see, while the losers who'd change the story are invisible.