WHAT I CAN SEE
The Physical World
I can see something that happens in the physical world. And if an objective outside viewere can see it then it is real.
The Inner World (of which I can be the only observer)
I can "feel" a feeling in my body, such as "I feel tension in my body" or, better yet, "I feel tension in my temples and my shoulders, with some soreness in my neck." The more complete the description the more it matches true reality, since there are no details left out of reality. To describe reality, I am writing out what I observe. The body observations are usually quite real - and they get more real as I get better at noticing and observing.
I can observe that I am thinking something. So it is real to say "I am (was) thinking the thought that I am inferior" is a description of reality. Of course, it is also a thought and a belief that may not be true. But it is true that I was thinking it, so it would fit in the description of "what happened".
Note that it is incredibly important in any decision-making, problem solving or changing beliefs that we start with as accurate a description as possible of what happened, as that is the beginning step in each of the processes for making progress, based on what's real and complete - you can't derive as good a resolution from an inaccurate basis as you can from a very accurate one. How to do this is in the piece called What Happened? (Link into Problem-Solving/Decision-Making in the Life Management section, as an essential skill for having a good life!)
It is not in reality to "see" what someone else is thinking, so you would not put in your desciption "I could see that he was thinking badly of me." That is an inference or an assumption from data that might be seeable but the inference is not seeable, not definitely in existence. (You could check it out for accuracy with the other person, but at the description stage we are not quite at that point. So it is merely conjecture.)
However, you could say "I had the thought..." or "I inferred that he was thinking badly of me because I saw his eyes squint." Observing that you "inferred" something is accurate and his eyes narrowing would probably be reality, since it is fairly seeable. Others' thoughts are never "seeable".
A FEELING IS NOT A THOUGHT AND VICE VERSA
One of the key areas that leads to, at a minimum, fuzzy thinking, and, at a maximum, nutso thinking, is the incorrect thinking (believing) that you can "feel" a thought. (You could feel the emotion from the thought, but you can't "feel" a thought, you can only think it. A feeling is a "physical sensation" only.)
"I feel I'm right" is a common expression, but, although this sounds picky, it is important to be precise and accurate with our language or it'll lead us down the path to incorrect conclusions or beliefs. "I think I'm right" is accurate. It is just another version of the clearer statement "I have the thought 'I'm right'", which you observed in your head.
MIND READING IS FRAUGHT WITH INACCURACY AND DANGER
As highly developed brainy people, we have the ability to "infer", "to guess", and "to predict" things "out there". But these are not accurate and are prone to the same errors as, say, intuition, a vital function but not an accurate one. To say "I can see you're thinking that I'm bad" is to say something that is not possibly true. I mean that your "seeing" it is not possibly true. Sure, your guess might be true, but you cannot "see" into another person's mind at all - not to speak even of the accuracy or inaccuracy of it (it's just a guess!!!). Read, for more clarification, Assuming, Mind-Reading, And Interpreting Versus Verifying, Clearing Up And Cleaning Up.
Much unnecessary agony has resulted from such guessing and interpreting, as our human systems tend more to look for what might be wrong or "bad" and, if we believe our thoughts in this regard we will suffer. A basically enlightened person (an emotionally intelligent person) will say to him/herself "that is just a thought and it is not reality. I know it is often inaccurate, so I won't give it any credibility." Or "I am smart enough to distinguish between reality and something I make up. I never believe that 'made-ups' are the truth - for that is a fool's belief!"
THE DIFFERENCE BETWEEN HIGHSANITY AND CRAZY
Insane people believe they "see" things that aren't there and can't tell the difference. But one leaves the state of insanity when one begins to see that his thoughts and illusions aren't necessarily real. See the movie A Beautiful Mind, noting what happens to completely alter the quality and sanity of his life. Most of us, before we realize that thoughts aren't real, dwell on the side where he was in most of the movie (though not quite as extreme). Great movie! And a great lesson!
And if you don't make a decision to change things in life, you'll be living another famous (and must-see) movie: Groundhog Day.