I recently re-read Dan Kahneman‘s Thinking, Fast and Slow, and was amazed by how much that I noted in his narrative, this time, that I had either missed or misunderstood during previous readings. In Chapter 19, “The Illusion of Understanding, he cites the WYSIATI Rule: “What you see is all there is.” In other words, people often make an assumption or a decision based on insufficient and/or inaccurate information limited to what they know or think they know.

Consider this passage: “The core of the illusion is that we believe we understanding the past, which implies that the future also should be knowable, but in fact we understand the past less than we believe we do. Know is not the only word that fosters this illusion. In common usage, the words intuition and premonition also are reserved for past thoughts that turned out to be true. The statement ‘I had a premonition that the marriage would not last, but I was wrong’ sounds odd, as does any sentence about intuition that turned out to be false. To think clearly about the future, we need to clean up the language that we use i9n labeling the beliefs we had in the past.”

Kahneman is discussing hindsight bias. Here is an example that occurred to me as I re-read this chapter. The Maginot Line was constructed in the 1930s to protect France against an invasion of German ground forces, as had happened during World War One (1914-1918). This time, German ground forces invaded France through Belgium and its Luftwaffe flew over the fortifications. The French military strategists were fighting World War Two with a World World One strategy.

With regard to the business world, consider this passage: “The average gap [between any great and good companies] must shrink, because the original gap was due in good part to luck, which contributed both to the success of the top firms and to the lagging performance of the rest. We have already encountered the statistical fact of life: regression to the mean.”

This brief commentary of mine cannot possibly do full justice to the substance of Kahneman’s insights. I urge you to read Thinking, Fast and Slow as soon as you can. The value of the material doubles each time you re-read it.

Daniel Kahneman is Eugene Higgins Professor of Psychology Emeritus at Princeton University and Professor of Psychology and Public Affairs Emeritus at Princeton’s Woodrow Wilson School of Public and International Affairs. He received the 2002 Nobel Prize in Economic Services for his pioneering work with Amos Tversky on decision making.