The Best Mental Models

Reasoning by analogy, or copying what others are doing, is sort of like being a cover band where you’re playing somebody else’s music. Whereas with first-principles thinking, you go back to the fundamental raw materials of music, which are the notes, and then you build an original song from scratch. That is first-principles thinking.

Lenny Rachitsky • First-Principles Thinking

Moat:

“An intrinsic characteristic that gives the business a durable competitive advantage” - Munger

It’s crucial for us to understand as many mental models as possible. As the adage goes, a little knowledge can be dangerous and creates more problems than total ignorance. No single model is universally applicable – we find exceptions for nearly everything. Even hardcore physics has not been totally solved.

Farnam Street • All Models Are Wrong

“Invert, always invert: Turn a situation or problem upside down. Look at it backwards. What happens if all our plans go wrong? Where don’t we want to go, and how do you get there?

"Instead of looking for success, make a list of how to fail instead–through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid... See more

Inversion

Incentives are what drive human behavior. If you want to change the way people behave, think about changing their incentives. Most people look at the function utility instead of the emotional benefit. What’s the real human motivation for expensive headphones is not to hear better but for reputation and status

Lindy Effect: "If a book has been in print for forty years, I can expect it to be in print for another forty years. But, and that is the main difference, if it survives another decade, then it will be expected to be in print another fifty years.”

The Second-Order Thinking Mental Model

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Storytelling: A tremendously useful tool to increase the longevity of your message in the audience’s mind. Stories spark emotions. People use stories to make sense of things. People learn from stories.