[Collection] Charles Munger 100 Thinking Model-Multiple Thinking Model

Some models in the book ~

List of investment principles:

1) risk-all investment evaluations should start with strategic risks (especially credit risks);

2) Calculate the appropriate safety margin;

3) Avoid dealing with people with moral problems;

4) Insist on appropriate compensation for predetermined risks;

5) Always remember the risks of inflation and interest rates;

6) avoid making a big mistake: avoid the continuous loss of capital;

7) Independence-"Only in fairy tales will someone tell the emperor that he is naked";

8) An objective and rational attitude requires independent thinking;

9) Remember that your right or wrong does not depend on whether others agree with you or oppose you-the only important thing is whether your analysis and judgment are correct;

10) following the crowd will only get you close to the average level (only moderate performance);

1 1) preparation-"The only way to win is to work, work, work, and hope to have a little insight";

12) Cultivate yourself as a lifelong learner through extensive reading; Cultivate curiosity and try to be smart every day;

13) More important than the will to win is the will to be prepared;

14) master the thinking model of major disciplines;

15) if you want to be smart, the question you have to keep asking is "why, why, why";

16) modesty-admitting your ignorance is the beginning of wisdom;

17) only in their clearly defined ability circle activities;

18) Identify and verify negative evidence;

19) resist the desire to pursue false accuracy and false certainty;

20) most importantly, don't fool yourself, remember that you are the easiest to be fooled by yourself;

2 1) Strict analysis-using scientific methods and effective checklists can minimize errors and omissions;

22) Distinguish between value and price, process and action, wealth and scale;

23) Remember that simplicity is better than profundity;

24) Become a business analyst, not a market, macroeconomic or securities analyst;

25) Considering the overall risks and benefits, always pay attention to the potential second-order effects and higher-level impacts;

26) Think before you think-empathy, always empathy;

27) Remember that the best use is always measured by the second best use (opportunity cost);

28) There are few good ideas-when the time is good for you, make a good bet (allocate capital);

29) Don't "fall in love" with investment projects-it depends on the situation and timing;

30) Patience-restraining people's natural preference for action;

3 1) "Compound interest is the eighth wonder of the world" (Einstein), don't interrupt it until it is necessary;

32) Avoid unnecessary transaction taxes and friction costs, and never act for the sake of action;

33) Keep a clear head when luck comes;

34) Enjoy the results and the process, because you live in the process;

35) determination-when it comes to verification, we must take resolute action;

36) When others are greedy, be afraid; When others are afraid, be greedy;

37) Opportunity will not come many times, so when it comes, seize it;

38) Opportunities only favor those who are prepared; Investment is such a game;

39) change-learn to change and accept the complexity that cannot be eliminated in life;

40) Know and adapt to the true nature of the world around you, and don't expect it to adapt to you;

4 1) Face the reality, even if you don't like it-especially when you don't like it;

42) focus-don't complicate things, remember what you originally wanted to do;

43) Remember, reputation and honesty are your most precious assets-they can be wiped out in an instant;

44) avoid arrogance and rashness;

45) Don't pay too much attention to details and ignore the obvious;

46) Never rule out unnecessary information: "A levee of a thousand miles was destroyed by an ant nest";

47) Face up to your big problem and don't hide it.

Of course, these principles are not applied in the order mentioned above, and their importance has nothing to do with the order. Each principle must be regarded as a part of the whole complex investment analysis process.

The most important example of multiple modes of thinking

The redundant backup model of 1) project;

2) Mathematical compound interest model;

3) Physical and chemical critical point, overturning moment and autocatalytic model;

4) Modern Darwinian summation model of biology;

5) Cognitive misjudgment model of psychology;

The most basic guiding principle

1) Take precautions;

2) Be patient;

3) Strict self-discipline;

4) impartiality;

Double-track analysis method

1) first of all, rationally speaking, what factors really control the interests involved. This rational analysis method is to identify real interests and find real opportunities;

2) Secondly, when the brain is in a subconscious state, what subconscious factors will make the brain automatically form useful conclusions that often fail in various ways? This method is to evaluate the psychological factors that lead to subconscious conclusions (most of these subconscious are wrong, so they need to be avoided);

Useful general concepts

1) Generally speaking, the best way to simplify tasks is to solve those big problems with obvious answers first;

2) Only mathematics can explain the true face of science, because mathematics seems to be the language of God;

3) It is not enough to think positively, but to think negatively;

4) The best and most practical wisdom is the basic academic wisdom. But there is an extremely important premise: we must think interdisciplinary.

5) The real big effect, namely lollapalooza effect, usually appears under the joint action of several factors;

The strict six-element system on which pilot training is based.

1) Give him enough comprehensive knowledge to master all the knowledge used in flight;

2) Giving him all this knowledge will not only enable him to pass one or two exams, but also enable him to skillfully apply this knowledge, and even handle two or three complicated and intertwined dangerous situations at the same time;

3) Just like any excellent algebra scientist, he should learn to sometimes use positive thinking and sometimes use reverse thinking, so that he can understand when to focus on what he wants and when to focus on what he wants to avoid;

4) He must be trained in various subjects in order to minimize the possibility of losses caused by his future operational mistakes. The most important operation steps must go through strict training to reach the highest level of proficiency;

5) He must get into the habit of checking the list;

6) After receiving the initial training, he must master these knowledge regularly: often use the flight simulator to avoid being unfamiliar with the knowledge of dealing with rare and important problems because of long-term non-use;

Psychology of human misjudgment

1) Reward and punish overreaction tendency;

2) Liking/loving tendency;

3) dislike/hatred tendency;

4) avoid suspicion;

5) Avoid the tendency of inconsistency;

6) curiosity;

7) Kant's fair tendency;

8) Envy/jealousy tendency;

9) Feedback tendency;

10) is influenced by simple association;

1 1) Simple and painful psychological denial;