Page 218 - Ray Dalio - Principles

Learning must come before deciding. As explained in Chapter One,
your brain stores different types of learning in your subconscious,
your rote memory bank, and your habits. But no matter how you
acquire your knowledge or where you store it, what’s most important
is that what you know paints a true and rich picture of the realities
that will affect your decision. That’s why it always pays to be
radically open-minded and seek out believable others as you do your
learning. Many people have emotional trouble doing this and block
the learning that could help them make better decisions. Remind
yourself that it’s never harmful to at least hear an opposing point of
view.

Deciding is the process of choosing which knowledge should be
drawn upon—both the facts of this particular “what is” and your
broader understanding of the cause-effect machinery that underlies it
—and then weighing them to determine a course of action, the “what
to do about it.” This involves playing different scenarios through
time to visualize how to get an outcome consistent with what you
want. To do this well, you need to weigh first-order consequences
against second- and third-order consequences, and base your
decisions not just on near-term results but on results over time.

Failing to consider second- and third-order consequences is the
cause of a lot of painfully bad decisions, and it is especially deadly
when the first inferior option confirms your own biases. Never seize
on the first available option, no matter how good it seems, before
you’ve asked questions and explored. To prevent myself from falling
into this trap, I used to literally ask myself questions: Am I learning?
Have I learned enough yet that it’s time for deciding? After a while,
you will just naturally and open-mindedly gather all the relevant
info, but in doing so you will have avoided the first pitfall of bad
decision making, which is to subconsciously make the decision first
and then cherry-pick the data that supports it.

But how does one learn well?

LEARNING WELL

For me, getting an accurate picture of reality ultimately comes down
to two things: being able to synthesize accurately and knowing how
to navigate levels.

Synthesis is the process of converting a lot of data into an
accurate picture. The quality of your synthesis will determine the