I recently finished Michael Mauboussin’s new book entitled “Think Twice” which expands on many of the topics of “More Than You Know” but is geared a bit more towards a general audience and less directly at institutional investors. Mauboussin’s goals are not dissimilar from those of Alpha Theory. We both strive to help people appreciate the common and avoidable mistakes of the decision making process, although he explains the pitfalls much more eloquently than I.
Now I read a lot of books on Behavioral Finance and Neuroeconomics, so the studies he reference in “Think Twice” are old hat, but Mauboussin does a great job of teasing out new insights. Check out the first chapter for a taste of how Mauboussin takes an interesting subject – Big Brown in the Kentucky Derby, makes it relevant for decision making – odds were obviously incorrect because of emotional bias, and creates a repeatable way to enact it – every chapter has a summary of how to incorporate each lesson into your decision process.
Additionally, I ran across a recent interview with Mauboussin discussing “Think Twice” and it highlights a few of the key tenets of his new book. Take a look (video here) and if you liked “More Than You Know” you should definitely check out “Think Twice”.