Perfectly Confident
How to Calibrate Your Decisions Wisely
Book Edition Details
Summary
"Perfectly Confident (2020) is an in-depth exploration of what confidence is and how we can leverage it effectively. Having too much confidence can be just as bad as having too little. But how do you strike the right balance and become perfectly confident? Drawing on psychology, economics, and his own research into business leadership, author Don A. Moore offers some insightful answers."
Introduction
Every day, you make countless decisions that hinge on one crucial factor: how confident you feel about your judgment. Whether you're considering a career change, making an investment, or simply deciding which route to take to work, your level of confidence shapes every choice. Yet confidence remains one of the most misunderstood concepts in personal development. Too little confidence keeps you trapped in missed opportunities and self-doubt, while too much can lead to costly mistakes and spectacular failures. The truth is that perfect confidence isn't about pumping yourself up with positive affirmations or projecting an image of invincibility. Instead, it's about calibrating your confidence to match reality, allowing you to take bold action when the odds favor success and exercise caution when they don't. This delicate balance between overconfidence and underconfidence represents the middle way—a path that enables you to see opportunities clearly, make decisions based on evidence rather than wishful thinking, and ultimately achieve more of what you truly want in life.
Calibrate Your Beliefs with Reality
Well-calibrated confidence is the art of aligning your beliefs about your abilities with the actual evidence of your performance. Unlike blind optimism or crushing self-doubt, calibrated confidence is rooted in an honest assessment of what you can and cannot do. It's the difference between believing you can accomplish something and knowing you can based on past results and current capabilities. Consider Alex Honnold's extraordinary free solo climb of El Capitan, the 3,000-foot granite monolith in Yosemite. When Honnold attempted this seemingly impossible feat without ropes or safety equipment, he wasn't driven by reckless overconfidence. Instead, he had spent years methodically building his skills, practicing every single move with safety gear until each motion became second nature. His confidence wasn't wishful thinking—it was calibrated to his proven abilities. Honnold's transformation from a talented but ordinary climber to someone capable of the impossible didn't happen overnight. He understood that true confidence comes from competence, not self-delusion. Every practice session, every successful climb with safety equipment, every careful analysis of the route contributed to his calibrated understanding of what he could achieve. By the time he made his historic ascent, his confidence matched his capabilities exactly. To calibrate your own confidence, start by gathering objective evidence about your performance in specific areas. Keep track of your predictions and their outcomes. When you estimate how long a project will take, write it down and compare it to reality. When you assess your chances of success in a negotiation or presentation, document both your confidence level and the actual results. This practice of tracking and scoring your judgments will reveal patterns in your thinking and help you adjust your confidence accordingly. The key insight is that confidence should be treated as information, not emotion. Instead of asking yourself how you feel about your chances, ask what the evidence suggests about your likelihood of success. This shift from feeling-based to evidence-based confidence will dramatically improve your decision-making and help you take appropriate risks while avoiding unnecessary failures.
Question Assumptions and Consider Alternatives
The most dangerous confidence is the kind that goes unexamined. When you're certain about something, your natural tendency is to look for information that confirms what you already believe while ignoring evidence that contradicts it. This confirmation bias can lead you astray in both directions—making you overconfident in weak positions and underconfident in strong ones. Ray Dalio learned this lesson the hard way in 1982 when he bet his entire hedge fund, Bridgewater Associates, on his prediction that the U.S. economy would collapse. He was so convinced of his analysis that he publicly declared on television, "There'll be no soft landing. I can say that with absolute certainty, because I know how markets work." His confidence was absolute, and he was absolutely wrong. The economic collapse never came. Instead, the U.S. entered what Dalio later called "the greatest noninflationary growth period in its history." His certainty cost him everything—Bridgewater lost so much money that Dalio had to let all his employees go and borrow money from his parents to survive. What transformed this devastating failure into eventual success was Dalio's willingness to question his own assumptions. He realized that his confidence had been built on a foundation of unexamined beliefs rather than rigorous analysis. Following his humbling experience, Dalio implemented a radical approach at Bridgewater that he called "radical transparency." He actively sought out people who disagreed with him, encouraging them to challenge his views with logic and evidence. This wasn't about being negative or pessimistic—it was about stress-testing his beliefs before making major decisions. The company that emerged from this philosophy became one of the world's most successful hedge funds. You can apply this principle by building your own "devil's advocate" process. Before making important decisions, deliberately seek out information that contradicts your initial instincts. Ask yourself: "What would have to be true for me to be wrong about this?" Actively look for smart people who disagree with your position and try to understand their reasoning. This practice doesn't mean becoming paralyzed by doubt, but rather ensuring that your confidence is based on thorough analysis rather than wishful thinking.
Think in Probabilities and Expected Values
Moving beyond simple confidence requires learning to think in terms of probabilities and expected values rather than yes-or-no predictions. This shift transforms vague feelings of certainty into precise tools for decision-making. Instead of asking "Will this work?" you learn to ask "What's the probability this will work, and what are the potential outcomes?" When Don Moore was finishing his PhD, his advisor Max Bazerman offered him a unique form of insurance. If Moore didn't get a job, Bazerman would pay him $90,000 from his own pocket. The catch? Moore would have to pay $5,000 upfront for this insurance. Rather than simply feeling confident or worried about his job prospects, Moore calculated the expected value of this bet. The math revealed something important: if Moore's chance of unemployment was greater than 5.6 percent, the insurance would be worthwhile. But if his chances of getting a job were better than 94.4 percent, he should decline the offer. This framework forced him to quantify his confidence rather than just feeling optimistic or pessimistic. After careful consideration, Moore declined the insurance, effectively betting on his own success with mathematical precision rather than mere hope. This probabilistic thinking extended to other areas of Moore's life. When planning his wedding, he and his fiancée faced the challenge of estimating how many invitees would actually attend. Instead of making a wild guess, they went through their guest list person by person, assigning each invitee a probability of attending based on their circumstances. Kelly, who had just moved to London for a new job, got a 40 percent chance. Max, who would probably enjoy visiting Chicago, received an 80 percent probability. After calculating the expected attendance across all 223 invitees, they arrived at 127.7 people. They sent invitations to everyone on the list, and 126 people actually attended—a remarkably accurate prediction that allowed them to plan their wedding with confidence grounded in careful analysis rather than hopeful guesswork. To develop your own probabilistic thinking, start by expressing your confidence in numerical terms. Instead of feeling "pretty sure" about something, assign it a specific percentage. Then track your calibration by comparing your predictions to actual outcomes. This practice will quickly reveal whether you tend toward overconfidence or underconfidence, allowing you to adjust accordingly and make better decisions across all areas of your life.
Seek Truth Through Other Perspectives
Your own perspective, no matter how thoughtful, represents just one view of reality. Seeking out other viewpoints isn't about undermining your confidence—it's about strengthening it by building it on a foundation of diverse insights and challenging assumptions. The wisdom of crowds emerges when independent perspectives combine to reveal truths that no single viewpoint could capture. Warren Buffett demonstrated this principle through his famous million-dollar bet with hedge fund manager Ted Seides. In 2007, Buffett wagered that a simple S&P 500 index fund would outperform a collection of actively managed hedge funds over the next decade. This wasn't just a bet about investment strategies—it was a test of whether individual brilliance could consistently beat collective wisdom. The hedge funds Seides selected were managed by some of the smartest financial minds in the world, people who devoted enormous resources to analyzing markets and identifying opportunities. Yet despite their expertise, talent, and sophisticated strategies, they averaged only 2.2 percent annual returns while the boring index fund delivered 7.1 percent. The collective judgment of all market participants, reflected in the index, proved wiser than even elite experts making concentrated bets. This outcome revealed a crucial insight: when you're convinced you have special knowledge that others lack, you might actually be the one missing important information. Every time you make a stock trade, you're betting against someone who disagrees with your assessment. The question becomes: what do they know that you don't? This perspective can be humbling, but it's also protective—it prevents you from risking too much on judgments that might be flawed. The same principle applies beyond investing. When you're certain about a decision, actively seek out people who see the situation differently. This doesn't mean accepting every contrary opinion, but rather understanding the reasoning behind disagreement. Often, you'll discover information you hadn't considered or assumptions you hadn't questioned. Create systematic ways to gather diverse perspectives before making important choices. Form advisory groups with different backgrounds and viewpoints. When facing major decisions, assign someone the specific role of arguing against your preferred option. Institute regular reviews where you examine not just what went right, but what alternative approaches might have worked better. This practice of perspective-seeking transforms confidence from a solitary conviction into a well-tested conclusion that can withstand scrutiny and increase your chances of success.
Summary
Perfect confidence emerges when you learn to navigate skillfully between the twin dangers of overconfidence and self-doubt. It's not about feeling more or less confident, but about calibrating your confidence to match reality. As this exploration has revealed, "the middle way enables you to see the truth and understand all that you are capable of, and how to achieve it." True confidence comes from honest self-assessment, rigorous testing of your assumptions, thinking in probabilities rather than certainties, and actively seeking perspectives that challenge your own. The path forward is clear: start tracking your predictions and their outcomes, question your most cherished beliefs, express your confidence in numerical terms rather than vague feelings, and systematically seek out people who see situations differently than you do. Perfect confidence isn't a destination—it's a practice that transforms how you approach every decision and ultimately how you live your life.
By Don A. Moore
