People hate contradictions. They make you uncomfortable. You own a stock which is ridiculously cheap. The market, however, is not cheap. What should you do? Do you ignore the market or do you focus on the market and ignore the opportunity? Is there a way out of this contradiction?
Ben Franklin created a way to deal with contradictions. He called it Prudential Algebra. He described it in a letter he wrote to a friend in 1772:
“My way is, to divide half a sheet of paper by a line into two columns, writing over the one pro, and over the other con. Then during three or four days of consideration I put down under the different heads short hints of the different motives that at different times occur to me for or against the measure. When I have thus got them all together in one view, I endeavour to estimate their respective weights; and where I find two, one on each side, that seem equal, I strike them both out: If I find a reason pro equal to some two reasons con, I strike out the three. If I judge some two reasons con equal to some three reasons pro, I strike out the five; and thus proceeding I find at length where the balance lies; and if after a day or two of farther consideration nothing new that is of importance occurs on either side, I come to a determination accordingly. And though the weight of reasons cannot be taken with the precision of algebraic quantities, yet when each is thus considered separately and comparatively, and the whole lies before me, I think I can judge better, and am less likely to make a rash step; and in fact I have found great advantage from
this kind of equation, in what may be called Moral or Prudential Algebra. Wishing sincerely that you may determine for the best, I am ever, my dear Friend, Yours most affectionately – Ben Franklin”