Judgment Is the Scarcest Resource
Naval Ravikant · 2019
"In an age of near-infinite leverage, judgment — not effort or intelligence alone — becomes the scarcest and most valuable resource, since small differences in being 'right' get massively amplified."
Judgment, in Naval's usage, means the ability to make correct decisions under uncertainty with incomplete information — distinct from raw intelligence or hard work. He argues that historically, what you could accomplish was capped by your own labor, so judgment mattered but within limited bounds; today, leverage (code, media, capital) means one person's judgment, right or wrong, gets applied at a scale that used to require an entire organization to achieve.
Naval's essay argues that someone whose judgment is correct 85% of the time, rather than 75%, isn't just 'modestly better' — once that judgment is applied through high leverage (a piece of code, a large fund, a media platform reaching millions), that ten-percentage-point edge in accuracy compounds into a dramatically larger share of outcomes, which is why elite investors, founders, and operators can capture returns wildly disproportionate to the actual gap in their skill. (The popular paraphrase 'he who is right most often wins' circulates widely online but isn't a verified direct Naval quote — the argument above is the actual, sourced version from nav.al/judgment.)
In nav.al/judgment, what does Naval argue happens to a small edge in judgment (e.g., being right 85% of the time instead of 75%) once combined with leverage?
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The explanation above is written with AI assistance. These are the originals — go to them to check it.
- How to Get Rich (without getting lucky) — Naval RavikantNaval Ravikant / Farnam Street
- Naval Ravikant: The Angel Philosopher (Knowledge Project)Farnam Street
Opportunity Cost
"The true cost of a choice is the value of the best alternative you gave up to make it."