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Show hosts Dan Mikulskis and Mary Spencer we welcome LCP's Nikki Matthews to discuss decision making in the investment world. 

We discuss

• Nikki’s Vista article investigating how people approach and make decisions.
• Are investors fundamentally decision makers?
• How decision making is often influenced by circumstances and those around us.
• How it’s easy to slip into a role (listen to this podcast with Jeff Housenbold from the Vision Fund which Dan references in this episode.)
• We’re forming a story in our head whenever we meet someone. Subconsciously, we are forming a view and looking for information that you’re right (this is known as confirmation bias).
• It's important to move away from having to be right so you can be more open.
• We’re always very limited in our information both on decisions and on people. Don’t forget that moods influence decisions and we don’t have visibility of how others are feeling.
• Whether the best time to make decisions is before or after lunch? It could influence things more than you think.
• Evening out decision making during the day could help. Don't try and make a lot of decisions toward the end of the day.
• Perspective – this matters hugely and influences us more than we know. There are ways of combatting this such as looking for diversity in demographics and background. Read more here from author Morgan Housel around how your own experienced make up only 0.0001% of what's happened but probably 80% the way you think the world work.
• Information asymmetry – there’s always hidden information in a decision and it’s impossible to know everything that other people around the table know.

Concrete takeaways for investors:

1. Prioritise decisions correctly (identify the small number of decisions that have the biggest impact and distinguish interesting from important). Be clear on what’s actually a decision. Shorter meetings also help.
2. Devil’s advocate / constructive challenge, but done well.
3. Keep a decision journal - it keeps you honest. Go back and see what decisions you made and identify any patterns in the decisions you made. Record what you thought was the most important information (a good example of a decision journal here). Beyond meeting minutes.
4. Congruence. Making sure you’re reflecting all your thoughts in what you’re saying. Is what you’re saying what you really think? Is it consistent with what you’re doing?

One thing to take away

Assessing how you make decisions can add a lot of value. Ask yourself: is your decision making body diverse, are you seeing (enough) challenge? Do you always seem to make consensus decisions? Do you record your decisions?

Most underappreciated thing

• Psychology and decision making are a very nascent decision making sphere. So much still to learn and figure out the implications of;
• The influence you have on others and they have on you is often underappreciated. See more in Milgram’s experiment.

Recommendations

• Predictably Irrational (Dan Ariely) 
• Presence (Patsy Rodenburg) 
• You might also be interested in previous episodes on Zoomthink and Groupthink and our review of Matthew Syed's book 'Rebel Ideas.'

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Each LCP investment uncut podcast is for information and marketing purposes only and does not constitute any form of investment or financial advice or a financial promotion (under the Financial Services and Markets Act 2000). All views expressed by the podcast hosts and guests are purely their own opinions and do not represent those of LCP, its clients or affiliates. Our podcast listeners should always seek independent financial or legal advice before making any financial or investment decisions. Please refer to the Legal Notices section on the LCP website for further information.​