Collection: Charlie Munger - #87 'Bias From Over-Influence By Extra Vivid Evidence'

Video Link: https://youtu.be/KEhmtZuflQg

In this episode, Charlie Munger talks about bias from over-influence by extra vivid evidence and how it causes his biggest investing mistake?

In this episode, you’ll learn:

  • What is bias from over-influence by extra vivid evidence?

  • What causes Charlie Munger biggest investing mistake?

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Now we come bias from over-influence by extra vivid evidence. Here’s one … I’m at least $30 million poorer as I sit here giving this little talk because I once bought 300 shares of a stock, and the guy called me back and said, “I got 1500 more.” I said, “Will you hold it for 15 minutes while I think about it?” In CEO of this company, I’ve seen a lot of vivid peculiarities in a long life, but this guy set a world record. I’m talking about the CEO, and I just mis-weighed it. The truth of the matter is his situation was foolproof. He was soon gonna be dead. I turned down the extra 1500 share, and it’s now cost me $30 million, and that’s life in the big city.

It wasn’t something where the stock was generally available, and so it’s very easy to mis-weigh the vivid evidence. Gutfreund did that when he looked into the man’s eyes and forgave the colleague.

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