The Best Mental Models
Moat:
“An intrinsic characteristic that gives the business a durable competitive advantage” - Munger
mental model
A mental model is simply a representation of how something works. We cannot keep all of the details of the world in our brains, so we use models to simplify the complex into understandable and organizable chunks.
Farnam Street • Mental Models: The Best Way to Make Intelligent Decisions (~100 Models Explained)
The Circle of Competence is a mental model that involves developing a knowledge of what specific areas an individual has an understanding of or experience in. Everyone has built up useful knowledge in some area of the world. By realizing where your strengths lie, you can determine the areas where you have very little familiarity and avoid them to... See more
What is the Circle of Competence and How Do You Find Yours? | MyWallSt
Rather than focusing on having a brilliant day, why not consider what a crap day would look like and avoid that? It will likely be easier and will achieve similar results. Or, as Charles Munger pointed out: "It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very... See more
Inversion
A first principle is a basic assumption that cannot be deduced any further. Over two thousand years ago, Aristotle defined a first principle as “the first basis from which a thing is known.”
First principles thinking is a fancy way of saying “think like a scientist.” Scientists don’t assume anything. They start with questions like, What are we... See more
First principles thinking is a fancy way of saying “think like a scientist.” Scientists don’t assume anything. They start with questions like, What are we... See more
jamesclear.com • First Principles: Elon Musk on the Power of Thinking for Yourself
The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated (Heilbrunn Center for Graham & Dodd Investing Series)
amazon.com
“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
"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