Excessive Self-Regard Tendency

Munger's term for the universal tendency to overestimate one's own abilities, contributions, and possessions—the Lake Wobegon effect where everyone is above average. The tendency manifests as: (1) Overestimating personal competence (most people rate themselves above average at driving, leadership, and intelligence). (2) Overvaluing one's possessions (endowment effect—you think your house is worth more than the market does). (3) Overweighting one's contributions (in any group project, summing individuals' self-assessed contributions exceeds 100%). (4) Making decisions that serve self-interest while believing they're objective. Munger considers this tendency among the most damaging because it prevents self-correction—you can't fix what you don't see.

When to use it

When self-assessment accuracy matters for decision quality; when overconfidence is producing uncalibrated risk-taking; when evaluating whether personal contributions are being assessed fairly vs. inflated; when the circle of competence needs honest delineation.

How it can help

Build systematic humility checks into your evaluation processes. The practices: (1) Actively seek calibration—compare your self-assessment to external feedback regularly. (2) Track predictions and outcomes to discover where your self-regard exceeds your actual capability. (3) In decision-making: assume your initial assessment of your own role is inflated and adjust downward. (4) Seek dissent—excessive self-regard makes you dismiss contradicting viewpoints. (5) For organizations: 360-degree feedback and independent assessment provide external calibration that self-assessment can't. Munger's personal practice: emphasize understanding what you DON'T know (circle of competence) rather than what you do.