10 common errors in reasoning that undermine arguments:

Ad Hominem

Latin phrase for "to the person”—an attack of the individual rather than the argument.

Instead of addressing the argument and its merits, the offender attempts to refute the opposition on the basis of personal characteristics.

All-too-common in political debates.
The Sharpshooter

A man fires a gun at a barn wall and then paints a target around the tightest cluster of bullet holes to create the appearance of accuracy.

The offender selects and highlights evidence that supports the conclusion—while ignoring evidence that may refute it.
The Sunk Cost Fallacy

Sunk costs are economic costs already invested in an activity that cannot be recovered.

The fallacy is found in thinking that you should continue on the basis of all that you've put in—with no regard for future costs or likelihood of ultimate success.
The Red Herring

The kippered herring was a smelly fish used to distract hunting dogs while training them to focus on a scent.

"Red herring" is now synonymous with distraction.

The offender distracts from the argument with a seemingly related—but actually unrelated—point.
The Straw Man

Setup a straw man that can be ripped down.

The offender ignores the actual argument and replaces it with a flimsy, easily-refuted argument—a "straw man".

By replacing a strong argument with a weak one, the offender aims to create the illusion of a swift victory.
The Appeal to Authority

The over-reliance on the perspective of an "expert" to support the legitimacy of an argument.

The qualifications of the figure in the field of question must be considered.

Expert support can be a feature—but not the sole pillar—of the argument.
The False Dilemma

Only presenting two choices or alternatives when there are many more that exist.

This ignores nuance and lends itself to extreme positions.

Typically reduces the potential for compromise—as the two options are painted as being extremely far apart.
Post Hoc Ergo Propter Hoc

A flimsy argument framework that says since Event B followed Event A, Event B must have been caused by Event A.

Just because B followed A, doesn’t necessarily mean that B was caused by A.

Correlation ≠ Causation.
Personal Incredulity

You cannot understand or believe something, so you argue that it cannot be true.

Complex topics often require significant upfront work to understand—an inability to do so immediately cannot be used to argue the illegitimacy of a claim.
Burden of Proof

The inability to provide evidence that a claim is false is used as justification that the claim is true.

Remember, the burden of proof always lies with the person making the claim to provide evidence.

The lack of refuting evidence IS NOT supporting evidence.
Those are 10 common errors in reasoning that undermine arguments.

Internalize them. Call them out. Avoid them.

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This thread pairs extremely well with a nice red wine and yesterday’s thread: 10 common mental errors that derail decision-making.

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More from Sahil Bloom

Short Squeeze 101

If you follow financial markets (or if you watch Billions), you've heard the phrase "short squeeze" used quite frequently.

But what is a "short squeeze" and how does it work?

Here's Short Squeeze 101!

👇👇👇

1/ First, the basics.

The "short" in "short squeeze" refers to the concept of short selling.

The basics are covered in my thread below.

https://t.co/xecJYNCxMs

TL;DR - short selling is a way of betting against a stock - i.e. betting that its price will decline.


2/ "Short interest" is a measure of how heavily an asset is shorted by the market.

It is the total number of shares that have been sold short (borrowed and sold), but have not yet been covered (bought and returned).

It is usually measured as a % of the # of shares outstanding.

3/ A "short squeeze" occurs when a heavily-shorted asset experiences a rapid upward price movement.

When this happens, short sellers may be forced to close their short positions (i.e. buy the stock and return it to the broker), further accelerating the upward price movement.

4/ Let's look at a simple example to show this in action.

We will use Tesla, one of the most heavily-shorted stocks in the world.

Imagine the stock price is $1,000 per share. This seems crazy. Ricky Rational decides to short the stock at this level.

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