Judgment Requires a Willingness to Be Unpopular

Naval: People with good judgment tend to demonstrate it in all aspects of life.

They are well read, think critically and hold a broad range of ideas and opinions, including conflicting ones. People with good judgement are humble and have a relatively low ego, so they don’t get too attached to earlier decisions. They constantly question themselves.

Often, they have scientific or other technical training and work in industries where they deal with real-world, consequential feedback and not just what people think of them. 

Groupthink leads to poor judgement

People with good judgement are willing to be unpopular. The clearest thinkers work from the ground up and use first principles in their reasoning. They end up relying on their own authority.

Things that lead to poor judgment: groupthink, over-socialization of judgment and picking things because they are politically or socially popular. Lots of people lose money in this business chasing things they wish were true, as opposed to what actually turns out to be true.

The “PayPal mafia” is famous for being insular. They all have good judgment, they’re all strange and politically incorrect—and they’re all brilliant. They’re not afraid to hold unpopular views, and they value each other’s insights and judgment.

Whatever people say about Peter Thiel, no one wants to go head-to-head with him in a debate because he’s brilliant and a contrary thinker. He’s a first principles thinker from the ground up.

If you surround yourself with brilliant, contrary and first principles thinkers, you will develop extremely good judgment; however, you may not end up very popular.