We can't live in a state of perpetual doubt, so we make up the best story possible and we live as if the story were true.

When everybody in a group is susceptible to similar biases, groups are inferior to individuals, because groups tend to be more extreme than individuals.

People tend to assess the relative importance of issues by the ease with which they are retrieved from memory—and this is largely determined by the extent of coverage in the media. Frequently mentioned topics populate the mind even as others slip away from awareness. In turn, what the media choose to report corresponds to their view of what is currently on the public’s mind. It is no accident that authoritarian regimes exert substantial pressure on independent media. Because public interest is most easily aroused by dramatic events and by celebrities, media feeding frenzies are common

Facts that challenge basic assumptions-and thereby threaten people's livelihood and self-esteem-are simply not absorbed. The mind does not digest them.

The dominance of conclusions over arguments is most pronounced where emotions are involved.

One of the major biases in risky decision making is optimism. Optimism is a source of high-risk thinking.

Our memory tells us stories, that is, what we get to keep from our experiences is a story.

Researchers who studied a thousand Dutch vacationers concluded that by far the greatest amount of happiness extracted from the vacation is derived from the anticipation period.

People exaggerate their confidence in their plans - something we call the planning fallacy... The existence of the plan tends to induce overconfidence.

When action is needed, optimism, even of the mildly delusional variety, may be a good thing.

Below an income of ... $60,000 a year, people are unhappy, and they get progressively unhappier the poorer they get. Above that, we get an absolutely flat line. ... Money does not buy you experiential happiness, but lack of money certainly buys you misery.

Some achieve a reputation for great successes when in fact all they have done is take chances that reasonable people wouldn't take.

To know whether you can trust a particular intuitive judgment, there are two questions you should ask: Is the environment in which the judgment is made sufficiently regular to enable predictions from the available evidence? The answer is yes for diagnosticians, no for stock pickers. Do the professionals have an adequate opportunity to learn the cues and the regularities? The answer here depends on the professionals' experience and on the quality and speed with which they discover their mistakes.

Spend some effort in figuring out why each decision did or did not pan out. Doing that systematically is key: really try to question the way you make decisions, and improve it.

Being wealthy is often a powerful predictor that people spend less time doing pleasurable things and more time doing compulsory things and feeling stressed.

We can be blind to the obvious, and we are also blind to our blindness.

The illusion that we understand the past fosters overconfidence in our ability to predict the future.

Finally, the illusions of validity and skill are supported by a powerful professional culture. We know that people can maintain an unshakeable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers. Given the professional culture of the financial community, it is not surprising that large numbers of individuals in that world believe themselves to be among the chosen few who can do what they believe others cannot.