1. People base their judgment of an activity not only on what they think about it but also on what they feel about it.

2. We delude ourselves in think we proceed forward in a rational matter weighting out the pros and cons of various alternatives.

3. Emotions and feelings are biological regulators. Without emotions it is impossible to make decisions: impaired feelings and flawed decisions go hand in hand.

4. Daniel Kahneman describes two system of decision making: System 1, experimental, fast, automatic, effortless, associative, and difficult to control and modify. System 2, analytical, slower, serial, effortful, and deliberately controlled.

5. Kahneman’s System 1 uses perception and intuition to generate impressions of objects. Intuition is a judgment that reflects an impression. System 1 needs to operated normally to make good judgments.

6. What influences impressions and how do these impression shape perception of risk and reward?

7. Affect is the goodness or badness we feel based on stimulus. Affect operates in the realm of system 1 and is rapid and automatic.

8. When an outcome does have a strong affective meaning, we tend to overweigh the outcome. Payoffs lack effective meaning. People pay the lottery because the payoff are so affective.

9. When an investor feels good about an investment, he deems the risk low and returns high irrespective of more objective probabilities.

10. Ideas and formulas to manipulate raw materials form the engine of wealth creation.

11. Innovation is recombining the building blocks of ideas, the more building blocks that exist, the more opportunities to solve problems.

12. More idea building blocks leas to more innovation.

13. Industries gravitate towards the dominate design. The large number of applicants competing for the dominate design drop off significantly after a product gains acceptance: PC, disk drives, internet failures, autos, and TVs. During boom periods revenue is strong and during bust revenue declines. Revenues margins are the largest during rapid growth.