📚 Could You Bear Being the Sidekick?
Unequal Partnerships, The Culture of Debate, and The Undoing Project by Michael Lewis
In his book The Undoing Project Michael Lewis chronicles the careers and collaboration of psychologists Amos Tversky and Daniel Kahneman, the duo whose work revolutionized our understanding of decision-making.
While the book is a helpful reminder of our many biases, investors won’t exactly be shocked to learn that “even statisticians did not think like statisticians”. We’ve long abandoned the idea of humans as rational actors. Instead, we scroll through the ever-expanding glossary of cognitive biases plaguing life and markets. That said, joining Tversky and Kahneman on their journey to uncover flawed thinking, including in themselves, is a visceral and memorable reminder that even the best minds are prone to making systematic errors.
I especially liked examples that illustrated the importance of framing and presentation (such as doctors making inconsistent diagnoses if presented with the same data repeatedly). We tend to focus on the substance of a problem. Does this company have a sustainable competitive advantage? Are these macro factors likely to topple the market? Will this CEO allocate capital well? It is much less intuitive to consider how our conclusions are shaped by how, and by whom, the information is presented. If you are getting your ideas delivered as stories, do you gravitate to the best ideas or the best stories?
This applies in many domains and perhaps masters of the craft incorporate this into their process intuitively. The following quote is from Tim Ferriss’s conversation with music producer Rick Rubin. Rubin understands that his judgment will be affected by how he receives his information:
We try not to even know whose ideas are which to take the personal out of it. Let’s say there’s a band with three different songwriters. They might send me demos. And in the past they would say, “These three are Bill’s and these four are Sam’s and these are Sally’s.” And then when I’m listening to them, I’m not focused on what’s the best of everything. Because I’m thinking about the individuals.
So I always ask for any information shared with me to not be labeled and not explained at all. Then I’m only reacting based on the actual material.
The same goes for when we’re hiring a mix engineer for something. I listen to them without knowing who did what. Because if one of them is a superstar, we might think, oh, the superstar probably did the best job. It clouds the decision-making. Even unintentionally knowing the information is not helpful. So we do as much blind testing as possible.
However, the most interesting aspect of The Undoing Project is the relationship between Tversky and Kahneman. The unlikely pair of outstanding minds fell into a kind of creative ‘work marriage’ that flourished before falling apart again.
A key ingredient to their mission of undoing the mistakes and misperceptions of others was the culture of debate and questioning that existed at Hebrew University:
The students … seemed to be intent mainly on catching their professors in error. They were shockingly aggressive and lacking in deference. One student had so insulted a visiting American intellectual by interrupting his talk with derisive comments that university officials demanded he seek out the American and apologize. “I’m sorry if I have hurt your feelings,” the student had said to the visiting dignitary, “but, you see, the talk was so bad!”
For the final exam in one psychology class, the undergraduates were handed a published piece of research and told to find the flaw in it.
This cultural DNA fueled their work.
“Amos’s approach to doing science wasn’t incremental,” said Rich Gonzalez. “It proceeded by leaps and bounds. You find a paradigm that is out there. You find a general proposition of that paradigm. And you destroy it. He saw himself doing a negative style of science. He used the word a lot: negative. This turns out to be a very powerful way of doing social science.” That’s how Amos would begin: by undoing the mistakes of others. As it turned out, other people had made some other mistakes.
Even the beginning of their relationship was an argument. After Tversky gave a talk, Kahneman cornered him with the comment: “Brilliant talk, but I don’t believe a word of it.”
Amos was a psychologist and yet the experiment he had just described, with apparent approval, or at least not obvious skepticism, had in it no psychology at all. “It felt like a math exercise,” said Danny. And so Danny did what every decent citizen of Hebrew University did when he heard something that sounded idiotic: He let Amos have it. … “The idea that everyone is entitled to his/her opinion was a California thing—that’s not how we did things in Jerusalem.”
For a while, their relationship took on a conspiratorial nature with the two laughing behind closed doors while plotting the upheaval of scientific orthodoxy. While the culture of debate can be uncomfortable and confrontational, Tversky and Kahneman were having fun. And their collaboration allowed for bad or mediocre ideas to get discarded quickly in favor of better ones.
Michael Lewis writes that “Danny and Amos did not so much as pause to mourn the loss of a theory they’d spent more than a year working on. The speed with which they simply walked away from their ideas about regret—many of them obviously true and valuable—was incredible.”
One day they are creating the rules of regret as if those rules might explain much of how people made risky decisions; the next, they have moved on to explore a more promising theory, and don’t give regret a second thought.
This can be difficult to implement because we get attached to our ideas and defensive when they are questioned (“science advances one funeral at a time…”). Honest debate requires trust, a thick skin, low ego, and the right incentives to avoid descent into toxic politicking.
“This is, or was, an important aspect of Israeli discussions,” Danny said. “They were competitive.”
A similar culture of debate seems to have existed under Barry Diller’s leadership: “Creative conflict can be noisy. I think you have to pull barriers down to get at what people really think.”
Unfortunately, equal or diffuse authorship of ideas conflicts with the world’s desire for heroes and with the structure of rewards. Ownership of ideas, or perception of ownership, matters. When acclaim and rewards did not flow equally, the partnership between Tversky and Kahneman proved unstable. Tversky moved to Stanford, Kahneman just to the University of British Columbia (later followed by Berkeley and Princeton). Their status diverged and they found themselves in a creative lull. The work suffered from their lack of collaboration.
“I was having an enormous number of ideas, but he wasn’t there,” said Danny. “And so those ideas were wasted, because they didn’t have the benefit of the kind of thinking that Amos was capable of putting into things.”
And Tversky seems to have had trouble sharing credit. When Kahneman’s individual creativity started to shine and Tversky was asked about the source of their ideas, he declined to give Kahneman credit. “Danny and I don’t talk about these things.”
Lewis pinpoints this as “the moment when the story unspooling in Danny’s mind began to change. Later he would point to it and say: ‘That is the beginning of the end of us.’”
Amos had been handed on a platter a chance to give Danny credit for what he had done, and Amos had declined to take it. They’d move on, but the moment had lodged itself in Danny’s mind and would refuse to leave it.
The story illustrated to me how rare it may be for partnerships of outstanding minds to last. Buffett and Munger, working together for many decades, seem like a true outlier.
Charlie and I have … disagreed on a lot of things. We’ve never had an argument.
In 56 years, we’ve never had an argument. When we differ, Charlie usually ends the conversation by saying: “Warren, think it over and you’ll agree with me because you’re smart and I’m right.”
Consider how unusual it is for Munger to accept the junior role despite being a brilliant thinker in his own right. It’s a testament to his respect for Buffett: “There were a thousand people in my Harvard law class. I knew all the top students. There was no one as able as Warren.”
Still, it was not natural for someone of his capabilities to accept this of the sidekick at Berkshire.
“A partner ideally is capable of working alone,” explained Munger. “You can be a dominant partner, subordinate partner, or an always collaborative equal partner. I’ve done all three. People couldn’t believe that I suddenly made myself a subordinate partner to Warren. But there are some people that it’s okay to be subordinate partner to. I didn’t have the kind of ego that prevented it.
There always are people who will be better at something than you are. You have to learn to be a follower before you become a leader. People should learn to play all roles. You can divide up in different ways with different people.”
Where Tversky failed to dispense praise, Buffett does everything in his power to give credit to those around him. The most important lesson he and Munger are dispensing from Berkshire’s podium, not explicitly but by example, may be about how to sustain an unequal partnership.
For contrast, consider Carl Icahn and his one-time analyst Ben Kingsley. From Icahn’s biography:
“Carl is always yelling at Kingsley, but it all bounces off Al. Al has a great mind. He puts things in a language Carl can relate to. I used to explain things from a cash-flow standpoint but Kingsley would recast it into a ‘put money and here’s what you get for it’ approach. The Carl-like way.”
“No one has been nurtured by Carl. Guys who worked around Bass, Milken, Perelman, all got rich in their own right. Not with Carl. If Kingsley made any money it’s because he knew how to make investments. Carl doesn’t share his success with anyone.”
It made me wonder how many of these powerful duos existed, then crumbled. How often did the more senior partner fail to share the spoils and kill the golden goose? Importantly, if the duo is near invisible from the outside because one person gets most of the credit, we may fail to notice when the partnership disintegrates. Only years later will its end be revealed through the deteriorating track record.
Consider who has become instrumental in your own work.
Who helps you develop your ideas?
Whose advice has become indispensable?
Who is the sounding board without which your thoughts fall flat?
Whose ear is the carpet on which you spill your creative flow?
Who helps you unearth your own conviction with pointed questions?
Whose insights help you declutter your mind and find your gems?
Do you appreciate what they do for you (they may even be unaware of this)? Are you investing in this relationship?
Are you giving them their share of the credit? Can you accept your own role of not being the sole creator and originator but being a co-creator?
And if this was the path to success, could you bear being someone’s sidekick? Would your ego allow you to step into the role of junior partner in the service of doing great work, such as the undoing of an entire paradigm of flawed thinking?
Thank you for reading,
Charlie Munger’s complete lack of envy is remarkable especially given how similar his background is to Warren Buffett’s background. Often, envy is most acute when looking at those who are most similar to ourselves. But Munger somehow truly has conquered envy and internalized what he calls the seamless web of deserved trust. Very, very few people can be so indifferent to the corrosive powers of envy.
Such an interesting question and topic... Gotta think about it for a while 🤔