In fact he credits mental models for his unusually sharp understanding of the world. In a speech that munger gave at usc business school in 1994, he started to delve into this idea of a latticework of mental models. Audio of the often referred to speech by charlie munger on the psychology. To get there, were starting with 4 reference books that cover the core, timeless, individual mental models you should have learned. Well, the first rule is that you cant really know anything if you just remember isolated facts and try to bang em back. Charlie munger s elementary worldly wisdom prescribes learning mental models from many different fields in order to develop better thinking. Munger is pointing out that people tend to ignore or deny the faults of people they love and even distort facts to facilitate that love. He recommends widening our competencies by combining the core principles or key ideas from multiple disciples like math, economics, psychology, accounting, sociology, history, etc.
Mental models are deeply held beliefs about how the world works. The advantages of a mental model 5 eat grab something to eat while on commute eat at home. The phrase latticework of mental models comes from berkshirehathaways charles munger, who is a person that has spent most of his life working out ways to, for lack of a better term, think better munger has come to the conclusion that in order to make better decisions in business and in life, you must find and understand the core. Life lessons, success, principles and mental models from a titan of finance kindle edition by thorniley, dave. Mental models introduction youve got to have models in your head and youve got to array your experience both vicarious and direct onto this latticework of mental models. Charlie munger refers to a latticework of about 100 mental models that he and warren.
Theyre called mental models, and you can find them in dense textbooks on psychology, physics, economics, and more. One mental model the economic law of supply and demandwould appear to have been violated. Munger and buffett have spent decades accumulating mental models. Theyve even developed a famous checklist they use to assess every investment opportunity. Mental models are what charlie munger refers to the key ideas in each discipline. Munger goes mental, on munger s speech at uc santa barbara page 96. You must know the big ideas in the big disciplines and use them routinelyall of them, not just a few. But the main idea that robert and munger are getting at is that the benefit of a mental latticework is that it gets stronger the more you weave into it. Charlie munger, mental models, and making better decisions. There are thousands of mental models, but the best ones apply broadly to life and are useful in a wide range of situations.
Make use of a few mental models, charlie munger, warren buffett, seth klarman, mohn, release date. Here is what charlie munger on the importance of mental models in our lives you must know the big ideas in the big disciplines, and use them routinely all. And when you understand things at a deeper level you make better decisions. Learn how charlie mungers system of mental models helped the contrarian. Charlie munger on elementary wisdom and mental models. Charlie munger and the latticework of mental models. By the time youre done, youll think better, make fewer mistakes, and get better results. Charlie munger may be mediashy, but when he speaks, people listen, and his wisdom on using mental models provides a far superior tool for making decisions and solving problems. I have set up a bookmarks system in the pdf file to ease your navigation, which you can access by clicking view, navigation panels, bookmarks. To get the most out of a collection of models, there are three things worth understanding. Munger, there are about 100 or so models across the disciplines of microeconomics, physiology, psychology, elementary mathematics, hard science and engineering that carry about. Sloth unreliability intense ideology selfserving bias perverse incentives perverse associations influences that. These lenses are known by many terms mental models, mindsets, biases or analytic assumptions charlie munger is a huge advocate of the need for a wide array of mental models for sound judgement. That said, its still filled with great latticeworkframeworks for mungers mental models.
While not an easy read, this book provides a better structure and lays out the big mental models to look for. In a famous speech in the 1990s, charlie munger summed up the approach to practical wisdom through understanding mental models by saying. He has a list of these ideas mental models in his mind and quickly picks the ones applicable to the given situation, much as a pilot automatically goes through a checklist prior to takeoff. What are the 100 mental models mentioned by charles munger. May 5, 1995 the theory of modern education is that you need a general education before you specialize. If the facts dont hang together on a latticework of theory, you dont have them in a usable form. A list of top 100 mental models for business by rob d.
Munger used the example of a business that raises its prices and, as a result, sells more of its product. Where can i find charles mungers mental models or a guess, since. There are more than 1 million books that have been enjoyed by people from all over the world. Charlie munger mental models explained the ways to. While we all use mental models to think, mungers idea is to actively go and learn the big timetested ideas men. How to train your brain to think in new ways this article shares some useful examples of how mental models work and how the right mental model can make a big difference. The top 100 mental models inspired by charlie munger. Like warren buffett, i think its a good idea to look to charlie munger for wisdom. The top 100 mental models inspired by charlie munger rob kelly.
A framework for putting mental models to practice, part 1. A lesson on elementary, worldly wisdom charlie munger. It is a representation of the surrounding world, the relationships between its various parts and a persons intuitive perception about his or her own acts and their consequences. Use the name mental model whether the diagram shows just the towers above the horizontal line or it shows the features aligned beneath the towers. It is a concept, framework, or worldview that you carry around in your mind to help you interpret the world and understand the relationship between things. A lesson on elementary, worldly wisdom as it relates to. How warren buffetts billionaire deputy at berkshire. The psychology of human misjudgement charlie munger full.
The people behind it have put a lot of work into developing a list and explaining charlie munger s mental models. Charlie munger on the psychology of human misjudgment speech at harvard university estimated date. According to charlie munger, its important to have a latticework of mental models with which to hang your ideas and. And i think to some extent, before you are going to be a great stock picker, you need some general education. A mental model is an explanation of how something works. Get the entire 10part series on charlie munger in pdf. The public doesnt know much about charlie munger, buffetts partner in crime at berkshire hathaway, and munger prefers it that way. Munger, vice chairman of berkshire hathaway, is warren buffetts partner at. Charlie munger on mental models, wisdom, and human psychology.
Charlie munger gave an insightful speech on 24 standard causes of human. This will help you understand how munger thinks through mental models. Charlie munger refers to a latticework of about 100 mental models that he and warren buffett credit for their successful investing. Unfortunately thinkmentalmodels pdf lacks any originality. I first learnt about mental models from reading about warren buffetts business partner charlie munger and who bill gates called the broadest thinker hes ever encountered. This idea of a latticework comes charlie munger, cochairman of berkshire hathaway.
Your brain is a roughly millionyearold piece of hardware designed and built to operate in the world of hunting and gathering where a dangerous animal may lurk behind the nearest bush. Like a system benefiting from synergistic effects, mental models offer exponential rewards to those willing to take the time to acquire their wisdom. Charlie munger has spoken a lot about mental models and their use in thinking better. Youve got to hang experience on a latticework of models in your head. Charlie munger and his mental models decoding markets. Elon musk and bill thurston on the power of thinking for yourself. M1 a2 discussion i believe mungers mental models refer.
Use features like bookmarks, note taking and highlighting while reading charlie munger. I believe munger s mental models refer to developing decision making skills and quick methods of analyzing opportunities and problems in a more effective manner. That is why the best investors stick to just a few mental models and then pound them into their heads, so they do not have to relearn these principles again and again and again. And finally, you should definitely watch his 1994 usc speech. This website, inspired by the work of charles munger, provides over 100 models that can be brought consciously to mind to aid the thinking process. In a speech that munger gave at usc business school in 1994, he delved into this idea of a latticework of mental models. Learning different mental models for evaluation is a timely and complicated process, as the quote from munger above suggests. But other mental models, from psychology, would see it as quite logical. It is this entire picture that becomes the heart of your strategy. Better to read munger bookarticles and buy influence book by robert ciadini. Always update books hourly, if not looking, search in the book search column. Learn more about the project here this guide explores everything you need to know about mental models. While our society has changed massively in the last 10,000 years or even the last 500.
Charlie munger s unique approach to being an expertgeneralist developing the habit of mastering the multiple models which underlie reality is the best thing you can do. But finding all of their mental models listed in one place is impossible. In a speech to stanford law school titled a lesson on elementary, wordly wisdom, revisited he asserted. Charlie munger on mental models, wisdom, and human. The importance of multiple mental models from poor charlies almanack, and what i think is the single most important idea i carry with me when it comes to going through life. Or, you can just read super thinking, a fun, illustrated guide to every mental model you could possibly need. A dozen things ive learned from charlie munger about mental models and worldly wisdom. Download it once and read it on your kindle device, pc, phones or tablets. Life lessons, success, principles and mental models from a titan of finance. Mental models wikipedia defines a mental model as an explanation of someones thought process about how something works in the real world. Get ebooks the great mental models volume 2 on pdf, epub, tuebl, mobi and audiobook for free. Save it to your desktop, read it on your tablet, or email to your colleagues. His notion of elementary, worldly wisdom a set of interdisciplinary mental models involving economics, business, psychology, ethics, and management allows him to keep his emotions out of his investments and avoid the common pitfalls of bad judgment. Latticework of mental models building a better invsting mind.
Charlie mungers remarks on mental routines youtube. The munger network of mental models focus investor. Each idea is a concept or model about how the world really works that can. Munger says there are seven things you should avoid in life. The great mental models is a project by fs to help equalize opportunity in the world by making a highquality multidisciplinary, interconnected, education free and available to everyone. Munger points out that if you dont master the multidisciplinary approach of such mental constructs, you will remain in the middle ranks or shallows in life. The great mental models volumes one and two are out. The mental models approach helps you understand reality. The great mental models volume 2 ebook download free pdf.
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