M&Ms: Excessive Self-Regard Tendency
Knowing when the odds are against you in the 106th edition.
Did you know gambling in the lottery increases significantly when players can pick their numbers vs. when the numbers are randomly generated?
How can this be?
After all, the odds of winning the lottery are pretty much identical if you pick the numbers yourself or if they generate them for you. And having them generated is less work.
But you can bet lotteries worldwide are glad to take advantage of people's high self-regard for picking numbers.
In the famous viral video from a few years ago that aired on Fox 5, the news anchor explained to the gentlemen selecting his numbers, "Slim to none. Let me tell you, your odds of winning are one out of two-hundred-nighty-two-million." She added, "Your numbers are lucky, though, am I right?" And he responded with, "I hope so, I hope so." Then the rest of the video goes south quickly.
But the point here is what causes this behavior is what Charlie Munger calls the human "Excessive Self-Regard Tendency."
And I tell you, few people I know think they're bad.
Charlie Munger points out:
"According to Tolstoy, the worst criminals don't even appraise themselves as all that bad.
They come to believe either
(1) that they didn't commit their crimes or
(2) that, considering the pressures and disadvantages of their lives, it is understandable and forgivable that they behaved as they did and became what they became."
And let me tell you, growing up in The Bronx, many of the people doing criminal things didn't think they were that bad.
But "Excessive Self-Regard Tendency" is not limited to criminals.
I had some software engineers reporting to me that nothing was their fault when things went south. I once had a guy who was almost ready for a Performance Improvement Plan; the thing they put you on before they fire you tell me he thought he was about to get promoted.
And the irony is that sometimes it works out for people like that. Charlie Munger points out, "While an excess of self-regard is often counterproductive in its effects on cognition, it can cause some weird successes from overconfidence that happen to cause success. This factor accounts for the adage: 'Never underestimate the man who overestimates himself.'"
This tendency, of course, is not all bad. It does not mean you should not believe in yourself. Or to take pride in your work. That pride in my work led me to build things that made our customers happy. Pride in our work is a powerful and great force for the world. That was one of the forces that led to my career success.
But this tendency humans have does mean we should understand when the odds are stacked against us.
It's not just lotto pickers, criminals, or some engineers reporting up to me that are prone to this self-regard tendency. I am inclined to this tendency, too; we all are.
This "Excessive Self-Regard Tendency" was probably what caused me to bet big. It was the thing that convinced me to quit my job and go all in on one thing, a startup. I knew the odds were bad, like the guy who picked his own lotto numbers.
But I was hopeful and confident in my choice.
Except my bank account started dwindling fast, and the one big thing wasn't working out anywhere near the rate I hoped it would.
"Excessive Self-Regard Tendency" is what probably causes a lot of other people to bet big too.
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Three Things From This Week: In the end, ballpens, summarizing.
Felix Denis wrote two incredible books on entrepreneurship and had a successful run-up as an entrepreneur back in the day, running magazines when magazines were a big thing. And in the end, he just wanted to write and do what he wanted to do.
Funny how that works out.
It is ironic that in the end, even after making hundreds of millions, money most of us will never see in our lifetimes, he just wanted to do the thing we could all probably do today with a little effort.
Yann makes a solid point here that the ballpen probably destroyed society.
It just democratized writing and publishing too much.
Of course, I am joking; after all, this is the Memes and Motivations (M&Ms) newsletter.
But it is ironic that these same arguments are surfacing today. Most are about Twitter, free speech, or AI. But they surface over and over again.
This is a nice piece highlighting that reading is not enough to comprehend, remember, and benefit from the things we read.
You need more than that.
The author thinks writing a summary is enough, but I think you need even more than that.
Charlie Munger thinks you need to teach and apply the things to your life too, or you'll never get the full benefit.
And, of course, I agree, which is why I teach. And it is why I share many of the things I read and consume each week in this newsletter.
Two Tweets From Me This Week: What can you do for them? A dollar is validation.
Two Memes: Moats and Kings.
Open AI CEO Sam Altman testified in front of Congress this week, and the only thing he asked for was a moat.
I am certain, from watching the videos, that the King of England is full of Self Regard.
But Imagine for a second if he had not won the ovarian lottery and been born where he was and to whom he was born to.
As always, thank you for reading.
P.S. You can reply to this email; it will get to me, and I will read it even if I can’t always reply in a timely manner.
Just as many people think themselves better than they really are, many also think their way of thinking is more universal than it really is. I vehemently disagree with your tweet emphatically stating that people care exclusively about how you have and can help them. I'm a utilitarian and libertarian socialist (values which do sometimes conflict but that's beyond the scope of this comment unless you're curious in which case I'm happy to discuss it!) not because I covet and crave and envy what others have, but because I've lived a privledged, spoiled, mostly-charmed life largely thanks to situations and circumstances I can take little to no credit for, and I want everyone and every creature to be as blessed as I have been. I hate suffering and want better for others because they should not suffer as well.
Damn Louie, you just keep getting more nuanced, engaging and thoughtful in your thinking about participating in the value game. Since there is such a thing as "excessive self-regard" then I assume there would be such a thing as "reasonable self-regard." And in that respect I'd venture to guess that the kind of self-awareness and self-knowledge that comes having direct experience of your personal strengths and weaknesses, knowing when and where to bet on yourself, and when and where to ask for help or perspective, would all be highly beneficial. And then additionally, we'd feel an ethical obligation not to take advantage of those who have "diminished self-regard" by trying to sell them things they don't need.