Max Zimmerman

Decision-making

• One-way vs. two-way doors

  Move faster on decisions that are easy to reverse. Give lasting commitments more scrutiny.

  Jeff Bezos · 2015 shareholder letter · PDF

• Inversion

  Work backward from failure: what would make this go badly, and how can those mistakes be avoided?

  Warren Buffett on Charlie Munger · 2009 shareholder letter · PDF

• Ex ante vs. ex post

  Separate decision quality from the outcome. Judge the reasoning using what was knowable at the time, not just what happened afterward.

  Steve Kelman on Richard Zeckhauser · Good decision, bad outcome

• Top-down vs. bottom-up thinking

  Check the big picture against the details. Feynman's comparison of shuttle-engine design approaches is a useful engineering example, not a rule that one approach always wins.

  Richard Feynman · Challenger report, Appendix F

• Induction vs. deduction

  Induction draws conclusions that go beyond the evidence. Valid deduction preserves truth from premises to conclusion, but still depends on the premises being true.

  James Lawson · Be Humble: Black Swans and the Limits of Inductive Reasoning · LinkedIn

• Occam's razor

  When explanations fit the evidence comparably well, prefer fewer unnecessary assumptions. Simpler is a starting preference, not a guarantee of truth.

  Stanford Encyclopedia of Philosophy · Simplicity

• Hanlon's razor

  Before assuming bad intentions, consider mistakes, confusion, or incompetence. A useful restraint on snap judgments, not a reason to ignore evidence of harm.

  The Jargon File · Folk maxim

• Logical fallacies

  Check the argument, not just how convincing it sounds. Traps worth recognizing: appeal to ignorance, misplaced authority, ad hominem, unsupported slippery slopes, strawmen, false dichotomies, and whataboutism. Context matters; naming a fallacy isn't a substitute for explaining the flaw.

  Amanda Ruggeri · Seven ways to spot a bad argument · BBC Future

Systems

• Stocks, flows, and feedback loops

  Distinguish what has accumulated from what changes it. Then look for feedback that reinforces or counteracts those changes.

  Donella Meadows · Leverage Points

• Theory of constraints

  Find what limits the whole system before improving individual parts. Making a non-bottleneck faster may accomplish very little.

  Theory of Constraints Institute · Goldratt's five focusing steps

• Goodhart's law

  A measure can become less informative when it becomes a target. Improving the score isn't necessarily improving the thing it was meant to track.

  Wikipedia overview · Charles Goodhart's original paper (full text requires access)

• The purpose of a system is what it does

  Watch repeated outcomes as well as stated intentions. A system's behavior can reveal priorities that its mission statement leaves out.

  Stafford Beer's heuristic · Wikipedia overview

• Plasticity vs. rigidity

  Adaptability makes room for new possibilities; stable routines preserve what works. The challenge is balancing exploration with exploitation, rather than maximizing either.

  Related research: James G. March · Exploration and Exploitation in Organizational Learning

• Alignment as the sum of vectors

  Effort has direction as well as magnitude. As a team analogy, people pulling in opposite directions can cancel out a great deal of hard work.

  Elon Musk · Tweet, November 13, 2022

• Little's law

  In a stable system, average work in progress equals average throughput times average time in the system: L = λW. More work in progress at the same throughput means longer waits.

  Ken Feldman · Little's Law: A Powerful Metric for Process Analysis · iSixSigma

• Abstraction and recursion

  Abstraction hides details so you can reason at a useful level. Recursion solves a problem through smaller instances of itself, with a stopping point.

  MIT OpenCourseWare · Structure and Interpretation of Computer Programs

Psychology

• System 1 vs. System 2

  A useful distinction between fast, intuitive thinking and slower, deliberate thinking. Both help; neither is automatically right.

  Daniel Kahneman · Nobel lecture · PDF

• Commitment and consistency

  We tend to act consistently with earlier commitments. Notice when staying consistent starts to matter more than being right.

  Robert Cialdini · Principles of Persuasion

• Reciprocity

  Receiving something can create pressure to give something back. A favor can influence a decision even when no obligation was agreed.

  Robert Cialdini · Principles of Persuasion

• Social proof

  Other people's behavior becomes a shortcut for deciding what to do, especially when we're uncertain. Popularity and correctness aren't the same thing.

  Robert Cialdini · Principles of Persuasion

• Authority

  Expertise can be valuable evidence, but titles and status also persuade. Check whether someone's expertise actually applies to the question.

  Robert Cialdini · Principles of Persuasion

• Liking

  We are more receptive to people we like. Separate the appeal of the person from the merits of the proposal.

  Robert Cialdini · Principles of Persuasion

• Scarcity as persuasion

  Limited availability can make something feel more desirable. Ask whether its usefulness changed, or only the fear of missing out.

  Robert Cialdini · Principles of Persuasion

• Gell-Mann amnesia

  Crichton's name for noticing errors in coverage of a subject you know, then forgetting that skepticism when reading about one you don't. An observation, not a validated psychological law.

  Ben Hunt on Michael Crichton's observation · Gell-Mann Amnesia · Epsilon Theory

• Trust: character and competence

  Good intentions and the ability to deliver are different requirements. Trust is harder to sustain when either is missing.

  Stephen M. R. Covey's framework · FranklinCovey

Economics

• Opportunity cost

  A choice costs the best alternative you give up, not just the money you spend. Time and attention count too.

  Federal Reserve Bank of St. Louis · Three Ways to Think Like an Economist

• Compounding

  When returns build on earlier returns, time changes the scale of the result. Applying the idea to knowledge or habits is an analogy, not a promise of exponential growth.

  U.S. Securities and Exchange Commission · Compound interest

• Scarcity and the commons

  Shared resources can be depleted when individual incentives ignore collective costs. That outcome isn't inevitable: institutions and cooperation can change the incentives.

  Elinor Ostrom · Nobel lecture on economic governance

• Supply and demand

  Prices and quantities reflect both willingness to buy and willingness to sell. Ask which side changed before deciding what a price movement means.

  OpenStax, Rice University · Principles of Economics

• Monopolies vs. competition

  Substitutes and barriers to entry shape a firm's pricing power. A large market share alone doesn't explain how protected a business is.

  OpenStax, Rice University · Barriers to entry

• Price elasticity

  Measure how responsive quantity demanded or supplied is to a price change. The size of the response matters, not just its direction.

  OpenStax, Rice University · Elasticity

• Gresham's law

  When different monies must trade at a fixed rate that misprices them, people tend to spend the overvalued money and retain the undervalued money. The fixed-rate condition matters.

  Econlib · The Natural Law of Money and editorial introduction

• Baumol's cost disease

  Wages can rise in slow-productivity sectors because workers have alternatives in faster-growing sectors. Costs may rise even when the job itself hasn't changed much.

  Luis Garicano · Can AI solve Europe's problems? · Section on Baumol's disease

• Ferguson's law

  Ferguson's historical warning: a great power risks decline when debt-service spending exceeds defense spending. A proposed pattern to examine, not an iron law of history.

  Niall Ferguson · Hoover Institution working paper · Also: The Second Cold War Is Escalating Faster Than the First (Bloomberg; subscription may be required)

• Time value of money

  Money at different dates isn't directly comparable. Timing, potential returns, and risk matter when comparing what is available now with what may arrive later.

  Applied example: Federal Reserve Bank of San Francisco · House Prices and Fundamental Value

• Zero-sum thinking

  One person's gain needn't be another's loss. Trade and specialization can expand what's available, although the gains aren't necessarily shared equally.

  OpenStax, Rice University · Comparative advantage and gains from trade

• Volatility + leverage

  Borrowing magnifies the effect of price changes on your equity. A temporary drop can force a sale or leave losses greater than the amount originally invested.

  Howard Marks · The Impact of Debt · Oaktree Capital

• The four horsemen of a stock market bubble

  Lamont's four warning signs: overvaluation; investors who think prices are too high but buy expecting further gains; heavy equity issuance; and an influx of new market participants. A way to assess speculative excess, not a clock for the next crash.

  Owen A. Lamont · Getting bubbly · Acadian Asset Management

Personal notes

Personal reminders, useful shorthand, and the occasional joke. Where the wording is my own, the link points to the idea behind it.

• Imagination vs. creativity

  In Rao's framing, imagination spots paths to possibilities we already know about. Creativity makes new possibilities available. A useful distinction, not a universal definition.

  Venkatesh Rao · Imagination vs. Creativity · Ribbonfarm

• Gradually, then suddenly

  What looks like a sudden change may have been building for a long time. A literary reminder to notice the accumulation before the turning point.

  Tim O'Reilly · Gradually, then suddenly · Applying Hemingway's phrase to technological change

• Circumstance + perspective = experience

  What happens matters, and so does how I interpret it. A reminder to examine my perspective without pretending difficult circumstances are imaginary.

  Personal shorthand · Related reading: Epictetus, Enchiridion, section 5

• Analysis + capital + execution

  Success, according to Succession. Included tongue-in-cheek.

  Succession · HBO's "Success is easy. Anyone can do it" clip

• Quality and gatekeepers

  Work doesn't endure on quality alone; people and institutions help recognize, preserve, and pass it on. Those gatekeepers aren't infallible judges of merit.

  Personal shorthand · Related research: Mihaly Csikszentmihalyi on creativity as a system · Full text may require access

• Agency + gratitude = mental health

  My shorthand for Paul Conti's framework: agency to act on and shape my life, gratitude to appreciate it. Two foundations for mental well-being, expressed as a reminder rather than a clinical equation.

  Paul Conti · How to Understand & Assess Your Mental Health · Huberman Lab

• Energy: production, delivery, consumption

  Think about the whole electricity system, not just generation. Power has to be produced, moved, and available where and when it is used.

  Related reading: Packy McCormick · Base Power Company