Our mental machinery is designed to make sense of the world. Our mental machinery is designed to tell us stories, and those are stories we believe, and the stories tend to be simple. They tend to be causal, and yet, internally coherent.

And the quality of those stories plays a very significant role in our mental life. So I’ll talk about that a bit. I’ll talk about the difficulty in integrating statistics with thinking about single cases, and I will talk of the phenomenon of overconfidence, which I think is an important phenomena in the psychology of judgment.

That’s a little nugget of wisdom Daniel Kahneman delivered at the recent Legg Mason Thought Leader Forum.

You should read the rest here. If you haven’t already, you should buy Kahneman’s book Thinking, Fast and Slow.