“I have come up with another method for tempering overconfidence. I call it the PreMortem technique. A postmortem is a procedure done in a hospital to find out why a patient died. The physician benefits, the medical community benefits, and even the friends and relatives benefit from what is learned. However, a postmortem doesn’t help the patient. Similarly, after a project has failed, its managers may conduct a postmortem session to figure out what went wrong. But it is too late. The project has already failed. Why wait till the end to find out what went wrong? We can move the postmortem to the beginning to help us anticipate problems and to become more realistic about the challenges. In a PreMortem, you ask your team to pretend that a crystal ball shows that in a few weeks or months your new venture has failed. The team members then write down all the reasons why it failed. We can’t expect to fix all the flaws, but we can prepare ourselves and our teams by anticipating some of the problems.”
- Gary Klein, Searching for the Keys to Adaptive Decision Making
How might the PreMortem technique be helpful in vetting a new trading methodology, a new long-term investment, or an important business / life decision?
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