Naval believes judgment is the decisive skill. “In an age of infinite leverage, judgment becomes the most important skill”. Once you have force multipliers, your decisions get amplified. The quality of your judgment determines success.
Modern leverage amplifies judgment exponentially. “If I’m managing $1 billion and I’m right 10% more of the time than somebody else, then that’s $100 million worth of value on a judgment call”. Technology multiplies good decisions. “Someone who makes decisions right 80% of the time instead of 70% of the time will be valued and compensated in the market hundreds of times more”. Good judgment builds on itself over decades.
Naval develops judgment through true understanding, not memorization. “In the real world, you get paid for making good judgments and decisions based on the basics”. He returns to first principles and fundamental math repeatedly. “You start with reasoning and then you build up your judgment. And then when your judgment is sufficiently refined, it just becomes taste or intuition or gut feel”.
This gut feeling represents millions of years of evolution compressed into intuition. It’s accumulated wisdom from countless decisions.
Stillness of mind enables judgment. “The judgment comes from clear thinking. The clear thinking comes from having time to reflect and to pursue your genuine intellectual curiosity”. Naval prioritizes intellectual freedom over busyness. “If you don’t have a day or two days a week in your calendar where you’re not always in meetings, and you’re not always busy, then you’re not going to be able to think. You’re not going to be able to have good ideas for your business. You’re not going to be able to make good judgments”. This empty space allows for deep reading and reflection.
Naval distinguishes judgment from reactive judging. “The act of judging something separates you from that thing”. Constant evaluation creates unnecessary suffering. “Over time, as you judge, judge, judge, you invariably judge people. You judge yourself. You separate yourself from everything, and then you end up lonely”. This separation feeds endless desires for things to be different.
He wants to run his mind like debugging code. “I would literally be watching every single thought I have and letting no reaction pass without it being stopped, inspected, strip searched, examined, understood, and then let go”. The goal is making decisions without outdated mental models and “prepackaged heuristics and judgments”.
Naval’s wealth formula includes judgment frequency. [“Your eventual outcome will be equal to something like the distinctiveness of your unique knowledge; times how much leverage you can apply to that knowledge; times how often your judgment is correct; times how singularly accountable you are for the outcome”](transcripts/eventually.md). Being right more often creates nonlinear returns.
Warren Buffett exemplifies judgment-based wealth creation. Even if you took away all his money, investors would hand him billions because of his proven track record. “A person like that, people will throw infinite leverage behind him because of his judgment”. Nobody questions his work schedule; they trust his decisions.
Naval wants to own his outcomes, not sell his time. “The ideal would be to make money with your mind, not with your time. So if I can just make one good decision a year, and that makes me all the money that I need for that year, then that’s perfect”. This requires developing judgment through constant iteration: “10,000 iterations, not 10,000 hours”. “Once, you know, you don’t have to put in the time anymore. It’s your judgment”.