Pebbles of perception: Book review

Pebbles of Perception by Laurence Endersen is a little big of wisdom and, not surprisingly, stemmed from the author's reading of Poor Charlie's Almanack and his resonation with Mungers thinking. It is a very easy read and gets you to stop and think about all aspects of choice within life and steps to take to ensure you do the best to make the best choice.

Life is about decisions and this book gets you to think more about perception, incentives and emotion in order to go through life making good decisions. I have highlighted a few main points from the book that really made me think:

1. Incentives - 'the rabbit runs faster than the fox, because the rabbit is running for his life while the fox is only running for his dinner'. The chapter on incentives is great and immediately made me think of a bit of advice I got from a former colleague that 'every decision and problem in the real world stems down to incentives and expectations of the parties involved'. The author links incentives to the 'eat what you kill' culture in finance and how there is nothing more dangerous tan underestimating incentives.
2. Perspective - ' too far east is west and too far west is east'. Understanding perspective and contextual differences in decisions will help understand outcomes.
3. Fear and uncertainty - The future is uncertain. The author uses a great analogy of fear of the future in life. 'We are the captain of our own ship. Fear of the future is the anchor that holds us in the harbour. Fear-ruled ships stay in safe harbours, but what use is a ship that won't set sail?' Uncertainty is forever present in all decisions. But without risk there is no return. Understanding the forever presence of uncertainty can not only help us calculate or imagine probable scenarios but also help us strive to eliminate as much uncertainty as possible. This point also resonates with Seth Klarman's comments on uncertainty which can be found in the link in my previous blog post here.