25 Ways Charlie Munger Outsmarted Bad Decisions (That You Can Too)
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“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” – Charlie Munger
Decision making is one of those skills that quietly impacts everything.
If your judgment is sharp, tools will amplify it.
If it’s off, they just help you make worse choices faster.
That’s why I keep coming back to Charlie Munger’s 25 cognitive biases.
They form a mental checklist to help avoid the kind of mistakes that compound.
I first tried reading this when I was 18.
Printed it at my college library.
Every time I tried to read it, I’d fall asleep by paragraph three.
It didn’t click.
Over a decade later, I now see this completely differently. And it’s been a game-changer ever since.
So I want to share all 25 of Munger’s biases with you, grouped in a way that’s easy to remember with real-world examples for each.
Let’s dive in.
Social & Influence Biases
How people sway your thinking
- Liking/Loving Bias
You believe people you like are smarter or more right than they are.
→ You overlook flaws in your favorite celebrities or leaders.
- Disliking/Hating Bias
You reject good ideas from people you dislike.
→ Your rival says something brilliant, but you dismiss it anyway.
- Social Proof
You copy the crowd’s actions.
→ Everyone's buying the new thing, so you do too without thinking.
- Authority Bias
You give extra weight to experts.
→ A doctor on TV says a supplement works, so you buy it.
Reward & Incentive Biases
How payoffs distort your judgment
- Incentive-Caused Bias
People do what they’re rewarded for — even if it’s wrong.
→ A mechanic finds more repairs because he’s paid per fix.
- Reciprocation Bias
You feel obligated to return a favor.
→ Free sample = "I should buy something."
- Commitment & Consistency Bias
You stick to your decisions just to seem consistent.
→ You defend a bad idea because you said it out loud.
Fear, Loss, & Emotion Biases
Where feelings cloud logic
- Loss Aversion
Losing feels worse than winning feels good.
→ You’d rather not lose $100 than win $100.
- Envy/Jealousy Bias
You make choices just to keep up.
→ You buy the car because your neighbor did.
- Stress-Influence Bias
Stress changes how you think.
→ Crisis hits, and you make a rash call.
- Deprival Super-Reaction Bias
Losing something makes you overreact.
→ You pay too much to recover something you left behind.
Pattern & Memory Biases
Shortcuts that mislead
- Availability Bias
You judge based on what’s easiest to recall.
→ You fear plane crashes more than car accidents.
- Representativeness Bias
You judge by stereotypes.
→ Tall = must play basketball.
- Contrast Misreaction Bias
You compare relatively, not absolutely.
→ A $500 watch seems cheap next to a $5,000 one.
- Confirmation Bias
You seek info that proves you right.
→ You only read articles that match your beliefs.
- Recency Bias
You overvalue recent events.
→ After a bad week in the market, you panic sell.
Miscellaneous Mental Traps
The sneaky ones
- Curiosity Bias
You’re drawn to novelty.
→ You click headlines or open notifications just to “see.”
- Chemical Influence Bias
Substances alter your judgment.
→ You agree to risky plans after a few drinks.
- Over-Optimism Bias
You assume things will go well.
→ You start a business thinking failure is impossible.
- Use-It-Or-Lose-It Bias
Skills fade without use.
→ You forget a language you haven’t practiced.
- Kantian Fairness Bias
You insist on fairness at a cost.
→ You’d rather lose money than let someone cheat.
- Survivorship Bias
You only see the winners.
→ You copy a millionaire’s routine, ignoring the 99% it didn’t work for.
- Self-Serving Bias
You credit yourself for wins and blame others for losses.
→ You ace the test because you’re smart. Fail? It was the teacher.
- Denial Bias
You reject uncomfortable truths.
→ You ignore bad medical news.
- Excessive Self-Regard Bias
You think you’re better than average.
→ Most drivers think they’re safer than everyone else.
What to do with this?
Most of these show up without you realizing it.
But once you start noticing them, they lose their power.
You don’t need to memorize all 25.
Just noticing which ones show up is often enough to change your trajectory.
That’s why I made a Notion cheat sheet you can save in your workspace and use as a mental checklist before big decisions.
It’s the same one I glance at often and it’s free.
Download the Notion doc here.
And if this sparked something for you, subscribe to the Habit Chess Podcast on YouTube here.
In your corner,
Misbah Haque
Author & Consultant at Pod Mahal
Writer & Host of Habit Chess
