Every mistake follows a three-act psychological framework of schemas and execution
Josh Steiner · Making Mistakes – Josh Steiner (EP.502) · May 18, 2026 · at 20:27
Investor and author Josh Steiner explains the core psychological framework from his research on diagnosing personal and professional errors.
0:00 / 0:27exact quote · 27.7s
720p mp4 · rendered on demand · StarZero watermark
“Each mistake is a three-act play. There's act one, and that's where your schemas are generally developed, either it's in your childhood or in your early professional experience. You form a way of looking at the world. Act two is when you make the mistake itself. You make a decision, probably without self-awareness about your emotional state or your context. And then act three is how do you deal with it? Do you go off and offer apologies to people you've hurt? Do you forgive yourself? Do you process your mistake?”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Josh Steiner
Mistakes stem from lack of self-awareness, whereas failures follow planned ambitions
“A mistake is a decision that you make almost always by yourself, where you're not aware of your surroundings or your emotional state, and it leads to regret. There's no planning. It's a decision you make without self-awareness. That's very different from a fai…”
Investment committees frequently fail to address internal firm pressures and behavioral biases
“Investment committees, in my experience, are very good about talking about the specifics of an underlying investment. Here's this company. What do we think its cash flow characteristics are? What's the competition like? We're much less adept at discussing what…”
Investors shouldn't take credit for macro luck without an explicit initial thesis
“When it moves in your favor, you shouldn't be patting yourself on the back unless that was an explicit part of your investment judgment.”
CEOs who articulate direct reports' career aspirations are typically excellent managers
“The vast majority of the time, if you talk to a CEO and she can tell you what the career aspirations of her five or six direct reports are, the likelihood that she's a really good manager of those people is quite high.”
Expanding AUM to satisfy employee career ambitions often dilutes investment returns
“There are definitely times where both forms of growth can dilute the returns and lead to a drift in strategy relative to what made the firm successful initially. That's driven by the fact that you had people who wanted to grow their careers, but there hadn't b…”