The Decision Journal Debiasing Toolkit
Four lightweight habits — base rates, pre-mortems, red teaming, and journaling — that force your mind open before you decide.
- Difficulty
- Easy
- Time to result
- ~ongoing to results
- Steps
- 4
- Confidence
- 90%
Mauboussin argues that what separates good-to-great investors from average ones has little to do with technical skill and everything to do with decision-making temperament. He offers four practical, low-effort tools: using base rates (reference classes) instead of your own gathered story; running a pre-mortem where you imagine the decision has already failed and independently write down why; red teaming, where a dedicated group is tasked with attacking your prevailing view; and keeping a decision journal that records your probabilistic expectations at the time of the decision so you can score yourself honestly later, separating good decisions from lucky outcomes.
Origin
Mauboussin developed this toolkit over years of teaching decision-making as the newest module of his Columbia security analysis course, roughly 15-20 years after realizing technical skill wasn't what separated top investors.
Core principles
- 01We tend to think we know the future better than we actually do; maintain an open-ended view.
- 02Base rates from a reference class are more reliable than your own gathered story and analysis alone.
- 03Feedback on decisions must separate the quality of the decision from the quality of the outcome.
- 04Writing down probabilistic expectations in advance creates an honest scoring system later.
How to run it
- 1
Establish the base rate
Before analyzing your specific situation, ask what happened to others who faced a similar situation before — treat your case as an instance of a larger reference class.
Pro tip This feels unnatural because you must set aside your own gathered information and views.
- 2
Run a pre-mortem
Imagine the decision has been made and, a year later, has turned out badly. Have each person independently write a short 'news article' explaining why it failed.
Pro tip Independence matters — don't discuss before writing, so you avoid groupthink contaminating the exercise.
- 3
Deploy a red team
Organize a group specifically tasked with challenging the prevailing view and attacking your own thesis, similar to cybersecurity red teams hired to hack their own systems.
Watch out Organizations naturally fall into shared mindsets; someone has to be structurally assigned to disagree.
- 4
Keep a probabilistic decision journal
Log each decision along with your probability estimate for specific outcomes by a specific date, then review the journal periodically to give yourself honest feedback.
Pro tip Write it as 'I think there's an X% probability this happens by Y date' to create a scorable record.
In the wild
Given a description of a shy, detail-oriented person named Steve, most people guess he's a librarian rather than a farmer, ignoring that farmers vastly outnumber librarians in the population.
→ Illustrates how vivid narrative descriptions override base-rate statistical reasoning unless you deliberately apply the base-rate tool.
Common mistakes
Relying only on your own gathered information
The natural instinct is to combine your own analysis and experience and project forward, ignoring more robust reference-class data.
Skipping independence in the pre-mortem
If people discuss before writing, the exercise loses its power to surface non-obvious failure modes.
Confusing good outcomes with good decisions
Without a journal recording original probability estimates, it's impossible to tell if a good result was skill or luck.
Is it for you?
Best for
Investors and executives who want a repeatable process to reduce overconfidence and improve decision quality over time.
Not ideal for
Snap decisions with no time for reflection or team input.
From the transcript
“each of us independently writes down why this turned out badly”
“red teamers are people that are organized to structure to to challenge thinking challenge the prevailing views of things”
From the episode
Michael Mauboussin Master Class — Moats, Skill, Luck, Decision Making and a Whole Lot More
Michael Mauboussin