Keep It Simple, Stupid
Complex explanations are not always the correct ones
The brightest people I have met share a superpower: the ability to make inherently complex things simple and understandable.
And yet, most humans naturally equate complexity with brilliance. Our HumanOS predisposes us to prefer the complex and artificial to the simple and unadorned. The more complex the explanation, the more likely we are to trust it.
But there is something to be said for simplicity.
You’ve probably heard of Occam’s Razor, the idea that the simplest solution explanation is usually the correct one. Well, a fascinating experiment designed by Professor Alex Bavelas demonstrates this principle in action.
In the experiment, two subjects, Smith and Jones, face individual projection screens. They cannot see or communicate with each other. They’re told that the purpose of the experiment is to learn to recognize the difference between healthy and sick cells using trial and error.
In front of each are two buttons marked Healthy and Sick, along with two signal lights marked Right and Wrong. Every time the slide is projected, they guess if it’s healthy or sick by pressing the button so marked. After they guess, their signal light will flash Right or Wrong, informing them if they have guessed correctly.
Here’s the hitch—only Smith gets true feedback. If he’s correct, his light flashes Right, if he’s wrong, it flashes Wrong.
Because he’s getting true feedback, Smith soon starts getting around 80% correct, because it’s a matter of simple discrimination.
Jones’s situation is entirely different. He doesn’t get true feedback based on guesses. Rather, the feedback he gets is based on Smith’s guesses! It doesn’t matter if he’s right or wrong about a particular slide; he’s told he’s right if Smith guessed right or wrong if Smith guessed wrong.
Of course, Jones doesn’t know this. He’s been told that a true order exists that he can discover from the feedback. He entered searching for order when there is no way to find it.
The moderator then asks Smith and Jones to discuss the rules they use for judging healthy and sick cells. Smith, who got true feedback, offers rules are simple, concrete, and to the point. Jones on the other hand, uses rules that are, out of necessity, subtle, complex, and highly adorned. After all, he had to base his opinions on contradictory guesses and hunches.
The amazing thing is that Smith doesn’t think Jones’s explanations are absurd, crazy, or unnecessarily complicated. He’s impressed by the “brilliance” of Jones’s method and feels inferior and vulnerable because of the pedestrian simplicity of his own rules.
The more complicated and ornate Jones’s explanations, the more likely they are to convince Smith.
Before the next test with new slides, the two are asked to guess who will do better than in the first time around. All Joneses and most Smiths say that Jones will. In fact, Jones shows no improvement at all. Smith, on the other hand, does significantly worse than he did the first time around, because he’s now making guesses based on some of the complicated rules he learned from Jones.
Think of all the times you've listened to the talking heads on business television or read predictions and forecasts in the financial press and on blogs.
Who *sounds* smarter, the person using $10 words and fancy jargon or the Simple Simon who cites a few easy to understand and implement "common sense" ideas?
Whose ideas are clear, concise and understandable? Simon's.
Who are we likely to believe is a brilliant thinker? Mr. or Ms. Complexity.
When you hear or read someone weaving their ideas into a beautiful mosaic of words, try to remember, they are almost certainly wrong. They might even be honest-minded: they are so good at it that *first* they baffle themselves with bullshit, and then move on to try and convince everyone else.
So, don't be fooled by unnecessary complexity - the profound truth is often nestled in the simple and the straightforward. Keep it simple, stupid.
We discuss this experiment and more in our recent episode with Gurwinder Bhogal (episode, deep-dive.) Jim first wrote the experiment in his book What Works in Wall Street.
This is such a great essay. — it's so good it almost feels like complete fiction.
"When you hear or read someone weaving their ideas into a beautiful mosaic of words, try to remember, they are almost certainly wrong." Respectfully, I don't think this is true, and I think that this kind of thinking makes people susceptible to grifters. Most people conflate the ability to understand and the ability to communicate. When we start to promote the idea that only smart people can communicate ideas simply, people will gravitate only toward simple explanations. Sometimes, a hard explanation is needed because discernment is hard and the world is a complex place.
Someone brought your essay to my attention after I'd written something similar in the opposite direction you can find here: https://charliebecker.substack.com/p/simplicity-expertise-and-bullshit
I also think Occam's Razor is often misused. To quote from my own post when someone brought it up:
"Occam's razor is a tool that was developed to decide between similarly proven hypotheses. It says that all else being equal, the argument that derives the conclusion with the least premises wins. It is not a suggestion that simplicity in itself is the best criteria to decide whether something is good or not.
For a slightly clumsy example, consider that you have decided to go to a fancy restaurant and you want to get a great steak. But everything is expensive so you decide to get the cheapest steak. What you have done is pre-screened that all the steaks are good and then you get the cheapest one. It is a two step decision where cheapness is the deciding criteria in the second step. Whereas if you had decided you wanted a delicious steak and cheapness was how you would decide, you would end up eating something that tastes terrible.
Occam's Razor is similar in that it's a tool to be implied in the second of a two step process. After you have a set of equally rigorous outcomes, you should go with the one that got there with the least amount of fuss and complexity."
As a thought experiment, I'd be curious: in your asset management career, did you allocate based on who could explain things most thoroughly, or who could explain things most simply?
(And please, read this all in a tone of charity and respect, I really enjoy Infinite Loops.)