How does Naval define "judgment"?

Good, explaining how Naval defines "judgment" is indeed tackling a super core concept within his framework. I’ll break it down in plain language.

What is "Judgment" in Naval’s View?

To put it in one sentence, Naval believes:

Judgment is the ability to discern the long-term consequences of an action or decision.

Does that sound abstract? No worries. Let's unpack it into a few more digestible points.

1. Not Just "Smart," but "Wise"

The "smart" we often talk about might refer to someone who learns fast, has a great memory, or excels at logical reasoning. But Naval's "judgment" is different.

Smart people: Can solve a clearly defined problem right in front of them, like solving a math equation.
People with judgment: Can see whether the "problem" itself is a genuine one, or more importantly, whether solving it is even worthwhile.

Think of it like this:

Confronted with a patch of seemingly dying grass. A smart person might immediately calculate how much water is needed and the most efficient way to apply it. A person with judgment might first dig into the soil and discover the real issue isn't lack of water, but termites eating the roots underground.

Therefore, judgment is about seeing through appearances and cutting to the core essence. It’s a form of wisdom, not just raw IQ.

2. The Most Important "Lever"

"Leverage" is another key concept in Naval’s thinking. He believes wealth creation is inseparable from leverage. And judgment is the most important and central form of leverage there is.

Why is that?

Capital is leverage: Given a large sum of money, how do you invest it? In Project A or Project B? That’s judgment. A wrong decision can sink any amount of money.
Labor is leverage: Managing a team, what do you direct them to do? Develop a feature nobody uses, or optimize a core process that doubles user experience? That’s also judgment. The right decision can amplify the effort of a hundred people to achieve the result of ten thousand.

In other words, judgment is the skill that determines where you exert your effort. If the direction is wrong, intensified efforts backfire harder.

3. How to Develop Judgment?

Naval argues judgment isn’t innate; it can be trained like a muscle, primarily through two paths:

Massive Reading: But not just news headlines or chasing trends. Focus on foundational knowledge from time-tested disciplines like mathematics, science, philosophy, and economics. This foundational knowledge helps you build "mental models," allowing you to view problems from diverse perspectives.
Personal Experience and Reflection: Just reading isn't enough. You must dive in, roll up your sleeves, do things, and make mistakes. But the crucial step is reflection: understand why you made a decision, why the outcome was good or bad. Internalize experience to hone your intuitive judgment.

To Summarize

So, within Naval’s framework, "judgment" is more like "the wisdom in decision-making." It doesn’t mean making the optimal choice on every minor issue. Instead, it empowers you to:

Identify the truly important decisions – the few that will have a deep, long-lasting impact on your future.
Achieve a high probability of making the right choices when facing those critical decisions.

It’s a superpower that cuts through noise, revealing the core essence and enabling foresight of long-term outcomes. Only by possessing it can you truly navigate the course of wealth, relationships, and the larger journey that is your life.