Decision Fatigue is a concept which everyone faces in their day to day lives but never truly know that they are facing it.
It means that the quality of your decisions reduces as you take more and more decisions.
One can also connect this to Will Power as rightly done in the book The One Thing.
Willpower has a limited battery life. Book- The One Thing
The more we use our mind, the less minding power we have. Book- The One Thing
There is a saying that where’s a will there’s a way,
But people often don’t think that your will is very limited, even though it is renewable.
You have a limited number of decision which you can make in a day
After certain number of decisions the quality falls significantly leading to irrationality.
One might have experienced it when you don’t think much about any decision you make during night, as that might be the time you are most tired after a busy day.
This decision fatigue can also occur when there is repetitive task done by you. As the process starts to get automated you pay less and less attention to detail.
Investment Decisions
Decision fatigue can happen in investing too and when it does you are exposed to losing out opportunities.
One could be in a hurry to find the next multibagger and would go through a lot of companies each day.
But without realizing the companies which you would be reading at the end would be getting your least quality attention.
There would be high probability that you would find excuses for companies which would require a further level of digging.
As at that stage your mind is done with handling so many processes.
This could happen when one decides to read follow Warren Buffett’s advice, “Start with the A’s”, that is read about all the companies that got listed.
Solution
Simple: Don’t waste your decision on trivial things.
One thing you can learn from billionaires is optimization of your time.
Running several companies together is a tough job and nobody wants to spend their limited set of decision on something trivial.
The example of a trivial thing where they have removed decision making is their clothing.
People like Mark Zuckerberg, Steve Jobs, Larry Page, Warren Buffett, etc. had set a dress code for themselves at least when they were at work.
The another way is to set an upper limit of the number of decision or set a time zone for taking important decisions.
Warren Buffett knows that he can make only finite amount of good investment decisions in his lifetime and shares a story of 20 slot punch card.
Jeff Bezos limits himself to only three good decisions per day.
Inshort
Don’t waste your decisions on trivial things, instead divert your focus towards things that truly matter to you.