Second Order Thinking. Second Order Thinking is a critical… | by Noah Pepper | Medium

Second Order Thinking is a critical practice for making effective policy, business and personal decisions. Many of our self-created problems as a society are due to people’s lack of Second Order Thinking. First order thinking is the process of considering the intended and perhaps obvious implications of a business decision or policy change. Second order thinking is the process of tracing down and unraveling the implications of those first order impacts. In a similar vein, in his excellent book The Most Important Thing revered investor Howard Marks writes about the importance of “Second Level Thinking” He introduces this topic with the following: First-level thinking says “it’s a good company; let’s buy the stock.” Second-level thinking says, “It’s a good company, but everyone thinks it’s a great company, and it’s not. So the stock’s overrated and overpriced; let’s sell.” First-level thinking says, “The outlook calls for low growth and rising inflation. Let’s dump our stocks.” Second-le

Second Order Thinking is a critical practice for making effective policy, business and personal decisions. Many of our self-created problems as a society are due to people’s lack of Second Order Thinking. First order thinking is the process of considering the intended and perhaps obvious implications of a business decision or policy change. Second order thinking is the process of tracing down and unraveling the implications of those first order impacts. In a similar vein, in his excellent book The Most Important Thing revered investor Howard Marks writes about the importance of “Second Level T