Intelligent and deep-thinking people may hold opposite opinions of one another. If you hold an unshakeable opinion about anything that exists in some state of probability or confidence its almost certainly a mistake to be doing so.

One of Amazon’s leadership principles is Have Backbone; Disagree and Commit. I wish it would elaborate a bit further, Have Backbone; Disagree, Reevaluate and Commit. It shouldn’t be disagree, hunker down, and ram my opinion through… but rather an exploratory process where people that respect each other’s opinions get closer to the truth.

There are certain physical facts that aren’t worth disputing. Anybody arguing that I am NOT sitting here physically typing this at my computer would be wrong. Its undeniable and for better or worse I’m typing these words into some word document (Document2).

Now let’s pick at something with an air of doubt about it: Is the United States economy doing good or bad?

Some people may say “bad”, some may say “good”, and some may say:

  • “What a terrible question, how can a complex economy be broadly categorized as good or bad”.

While this example is heavy handed, it certainly demonstrates the need for clarifying questions.

“Oh… I said “good” because I assumed we were talking about the performance of a market-cap weighted index of U. S. equities.”

“Oh… I said “bad” because I was talking about real GDP growth slowing year over year”

If you look around, deep questions are reduced to simple statements and assumptions all around us.

  1. Political candidate ‘X’ is the sole perpetuator of problem ‘Y’
  2. The project failed/succeeded because of ‘Z’
  3. The P value was < .05, so we should reject the Null Hypothesis…

How can one possibly attribute the entirety of a complex issue to a political candidate, the failure of a project to a single problem, or why even use .05 as a cut-off for rejecting the Null why not .04, why not .049?

“Man’s mind cannot grasp the causes of events in their completeness, but the desire to find those causes is implanted in man’s soul. And without considering the multiplicity and complexity of the conditions any one of which taken separately may seem to be the cause, he snatches at the first approximation to a cause that seems to him intelligible and says: This is the cause!"

– Leo Tolstoy, War and Peace

Probabilistic thinking is such an important skill as we fight the urge to quickly categorize into binary values: buy or don’t buy, right and wrong, good and bad. This isn’t an argument for never making a decision or paralysis by analysis, but rather for careful consideration of beliefs, a willingness to update opinions, thinking in probabilities and asked clarifying questions in light of a vague inquiry.

I think we are all on some gradient descent toward truth. We wake up every day with a goal of minimizing loss (regret) through being correct, producing positive change in our environments and updating our beliefs. We inch toward this over time, but… our calculus is a bit rusty, sometimes we take a step in the wrong direction, sometimes we over shoot our destination, and sometimes we find ourselves stuck in a local minimum and only with great difficulty can we eject ourselves and find the global minimum.

This is an arduous but worthwhile process.

“The inactive investor who takes up an obstinate attitude about his holdings and refuses to change his opinion merely because facts and circumstances have changed is the one who in the long run comes to grievous loss.”

―- J. M. Keynes