In the late 1980s I was a cofounder of a biotech company called Progenics Pharmaceuticals. In a meeting at Goldman Sachs, a partner there asked me, “What are the odds that this company will be successful? And don’t tell me 100 percent.” I said, “I know it can’t be 100 percent, but it feels like 100 percent to me.” In fact, the company was successful after a number of stresses and strains, and is now traded on Nasdaq. The point is, if you are an investor, do you want the head of a company to be the guy who says it has a 5 percent chance of success or the guy who says 100 percent and believes it? Of course you want the crazy person who will blow through the tough times. It requires that kind of confidence.

Overconfidence is actually something that serves us better than it did our ancestors. In ancient times you lived among the same group of people your entire life. So if you were Terry the overconfident boaster at age 20, people would remember that forever. In this world some people will remember forever your boasting that failed to pan out, but the opportunities for fresh starts are greater. Whatever the correct level of overoptimism was in a world where you could easily be killed if you thought you could go head-to-head in battle with an elephant, and all of your mistakes were remembered forever by every single person you knew, when you transfer that tendency to this world, your lizard brain might try to adjust your behavior in the wrong direction. It probably pays to be more optimistic than you feel.