Overall Rating: ★★★ (3/7) (mediocre for its category)
Learning Potential / Utility: ★★★★ (4/7)
Readability: ★★ (2/7)
Challenge Level: 4/5 (High) | ~420 pages ex-notes (official: 512)
Blurb/Description: Nobel prizewinner Daniel Kahneman discusses, academically, the two systems driving our thoughts (and behavior): the emotional, intuitive “System 1” and the deliberative, logical “System 2.”
Summary: Thinking Fast and Slow is my runner-up for “book most overrated by investors” (with Klarman’s Margin of Safety the champion.) People who pitch this book as “required reading” simply haven’t read broadly enough about cognitive biases: while the content is certainly useful and I don’t take anything away from Kahneman as a researcher, his writing/communication/worldview leave much to be desired, and the same lessons can be learned far more effectively and enjoyably via a variety of other books (many of which are suggested below).
Highlights: Kahneman’s research provides a useful framework for thinking about decision-making; the book is thorough and provides a number of notable/memorable examples (such as “Linda,” the bank teller and sometimes-feminist, who vividly demonstrates the flaws of the intuitive, snap-judgment System 1 and its representativeness heuristic) which will catch unassuming readers out (some of them got me for sure) and prove that behaviorally-driven irrationality isn’t just “other people’s problem” but rather part of how the human brain works (including yours and mine).
Lowlights: The first major flaw is that Kahneman’s writing is repetitive, tedious, repetitive, academic, and repetitive; from my standpoint as I diligently and painstakingly trudged through every page, calling Thinking Fast and Slow “dry” would be an insult to the comparative lushness of Death Valley. Kahneman has neither the witty and humorous accessibility of Richard Thaler, the data-driven storytelling flair of Nate Silver, or the deeply technical yet understandable delve into real-world medical situations of Jerome Groopman. To the extent that there are plenty of other authors covering the same cognitive processes in a much more engaging and applied way, Thinking Fast and Slow should be your last read in the category of cognitive biases, only for the sake of completeness, after exhausting all other options – certainly not the first or best book that someone should read about the topic.
Second and maybe even more importantly, Kahneman is a self-described pessimist – I would even go so far as to suggest he has a bleak, demotivating streak of Taleb-esque nihilism in his attitude – and for those of us who read to actually learn rather than just to show off and make ourselves part of the in-club, that’s a problem. Pessimists don’t make for good teachers. Whereas other cognitive bias authors (Thaler, Munger, Silver, Groopman, Bevelin) present material in an engaging way that says “we can do better” – and shows readers exactly how – a more disenfranchised tone permeates Kahneman’s book, driven home by this brutally depressing note in his conclusion on page 417:
“What can be done about biases? How can we improve judgments and decisions…? The short answer is that little can be achieved without a considerable investment of effort. As I know from experience, System 1 is not readily educable. Except for some effects that I attribute mostly to age, my intuitive thinking is just as prone to [cognitive biases] as it was before I made a study of these issues.”
As one of my clients, a tenured investing professional who’s one of the sharpest/best-read people I know, pointed out: well, if you think we can’t really improve, why bother writing the book, and why should we bother reading it? Thankfully, the experience of others – Munger as expressed through his life and in Damn Right and Poor Charlie’s Almanack, and Richard Thaler’s work as described in Nudge, not to mention all the thoughtful medical practitioners interviewed by Jerome Groopman in How Doctors Think or even Gawande in The Checklist Manifesto strongly suggest that Kahneman’s inability or unwillingness to apply what he’s learned shouldn’t discourage the rest of us. Kahneman fails to understand the conditioning mental model; it’s basic psychology that we can change our schema – Philip Tetlock and Dr. Judith Beck both have much more useful perspectives on this.
Kahneman does, in his defense, go on to mention that organizations have a better shot at improvement than individuals, but when I read Thinking Fast and Slow, the ending left a really bitter taste in my mouth and convinced me never to read it again: I slogged through this dense material, and my reward is Kahneman telling me I should give up hope? Yeah no, there are better uses for my time, thanks.
Instead, you should read: “Misbehaving“ by Nobel laureate Richard Thaler (review + notes). Misbehaving is my favorite book of all time because it not only provides a thorough, nuanced, and insightful exploration of cognitive biases, and is hilarious / engaging, but does so through the lens of the profoundly irrational behavior of classical economists who clung to the “rational actor” hypothesis.
Reading Tips: Skim heavily after a little while – this is a repetitive book that repeatedly gets very repetitive.
Reread Value: 3/5 (Medium) – if you can tolerate reading it again, which I won’t be able to.
More detailed notes: not available at this time.
First Read: 2014
Last Read: 2014
Number of Times Read: 1
Review Date: early 2018