Rocketship.fm
Jul 17, 2019

Charlie Munger's Mental Models

Summary

I’ve seen a few posts about mental models recently but not spent the time to dive down the rabbit hole. This article has been on my reading list forever.

When I saw this podcast from Rocketship.fm, I thought I’d see what all the *hype* is about.

Interesting stuff. They take excerpts from a Charlie Munger speech back in the 90’s and explain how to use a handful of his mental models.

And if Charlier Munger isn’t a familiar name to you, he’s Warren Buffett’s business partner.

3 lessons…

  • Mental models are concepts to simplify the world around you. Things proven to be true in the way the world works.
  • When you understand a mental model, you can use it to try and take the bias out of your thinking. It allows you to take a step back and see the world through a different lens / perspective.
  • We get persuaded by marketers using these models. And we can use them ourselves to do the persuading. But use them for good, not evil 😄

Mental models are how we understand the world. Not only do they shape what we think and how we understand but they shape the connections and opportunities that we see. Mental models are how we simplify complexity, why we consider some things more relevant than others, and how we reason.

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.

Today we explore some of Charlie Munger's famous mental models as outlined in his speech "The Psychology of Human Misjudgment."

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