Charles Munger believes that every subject is blind and touches the elephant from a unique angle. To surpass ordinary people's cognitive decision-making, we must master multiple core thinking modes. The following content is taken from Charles Munger 100 thinking model, which will benefit people for life.

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Compound interest principle

Einstein said: compound interest is the eighth wonder in the world.

Buffett said: Life is like snowballing, the key is to find enough wet snow and long slopes.

Charles Munger said: Understanding the power of compound interest and the difficulty of obtaining it at the same time is the core and soul of understanding many things.

In a limited time, put limited energy and wealth into a certain field continuously and repeatedly, and stick to it for a long time, and the final positive impact will be like snowballing, and the return will definitely exceed your imagination. This is a typical compound interest thinking in economics.

Most people will never use compound interest in their lives, and they will not realize its power. The thinking of compound interest requires us to look at things from a developmental perspective and a long-term perspective.

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Anti-entropy increasing thinking mode

From a system, an organization, to a planet, and even each of us, it conforms to the law of entropy increase. We will become chaotic, disorderly, rigid and lifeless until we die in this chaos.

Fortunately, the universe is balanced, which gives us a different path under the premise of entropy increase, that is, anti-entropy increase, that is, self-organization and life.

Amazon CEO Bezos has a deep understanding of anti-entropy increase. He made Amazon's services open enough, so he had Amazon Cloud. He will praise new things, even a little achievement, and ask employees above the supervisor level to read The Innovator's Dilemma once a week.

Anti-entropy increase is to reproduce life. Planets are born from nebulae. There are lithosphere, atmosphere, rivers, monsoons, springs and mineral deposits on the planets. These are all organized processes and resistance to disorder. The peak of this orderly and organized process is the emergence of life: DNA clumps, single-celled organisms, multicellular organisms, plants and animals, all the way to the most exquisite organized structure-human beings.

When people are old, the best state is to return to babies and nature. If an enterprise wants to increase its anti-entropy, it is to make itself more dynamic, more open, more adaptable to external changes, and let itself evolve in the environment. At the same time, independent new businesses can be born and new businesses can evolve.

In essence, sustainable development is a process of increasing entropy, and to break through discontinuity, we must "generate" a new curve, which is the best way to resist the increase of entropy.

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Anti-fragile thinking mode

Things can be divided into three categories: fragile, tough and fragile.

Fragile things will break when they are subjected to external pressure, just as a glass will break when it falls to the ground; Tough things are not affected by external pressure.

And anti-fragile things can evolve with the pressure in this fluctuating world and make themselves stronger.

Don't be overwhelmed by pressure, it is the best energy for your evolution. Changes in the external environment will screen out the real anti-vulnerable. Anti-fragile thinking mode can be applied to:

1. Analyze rationally from the predicament, enhance cognition and gain energy;

2. Return to the heart from the pressure and improve your mind and tolerance;

3. Relocate from the limitations and improve the vision and pattern.

And naturally also has anti-vulnerability. In this world, many natural things are elastic and fragile. Nature has many characteristics. There are universal laws in nature, spring, summer, autumn and winter. Adaptable creatures evolved from such fluctuations, while clumsy creatures such as dinosaurs became extinct. The human body also conforms to the laws of nature, but also has anti-fragility. When a person breaks a bone, the bone born will be stronger, and the poisoned person will also have anti-toxic properties.

Anti-vulnerability itself can face risks and benefit from them.

Facing the uncertainty of the future, we can do this:

1.？ Using asymmetry, small input and high output.

2.？ Become diversified and let yourself have more than one skill or identity.

3.？ I believe that the future nonlinearity will give us more opportunities and fun. In this world, it is precisely because of nonlinearity that new creatures will constantly appear, and new things will replace old things, and they will continue to grow and improve.

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10+ 10+ 10 bystander thinking mode

In the face of a decision or choice, when you are hesitant, you can think about it:

10 minutes later, what do you think of your current decision, will you still agree or regret it; 10 months later, what do you think of this decision made by 10 months ago? 10 years later, what do you think of your own judgments and decisions 10 years ago?

This mode of thinking can be applied to: temporary judgment, big decision-making, forecasting one's own future, etc.

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Three-layer explanatory thinking mode

There are three interpretations of a thing: the reality layer, the technology layer and the bottom layer.

The reality layer will explain the simple cause and effect that ordinary people can see; The technical layer will explain the law behind the reality, which is the law brought by a background and a visible skill law under the phenomenon; At the bottom, it is a law that can be widely applied, and it is a deep-seated thinking mode to understand human nature and understand the law.

The three-layer explanatory thinking mode can be applied to deeply analyze the cause of an event and understand the law of a complex thing.

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Golden circle thinking

The golden circle is a way to know the world, which has three levels. Starting from why, exploring the essence of the problem is a sharp weapon to quickly analyze the root of the problem.

The mode of thinking is based on why, why and what is the idea of doing so, which stimulates perceptual emotions from the heart to produce driving force; Think about how fast, set goals and solve them step by step; What is the final result, which is more in line with the original idea.

Why: think about why we should do this, our goals and ideas;

How: What methods and measures are adopted;

What: the expression of the result. ?

The process of thinking about why is a determination of principles, boundaries and values for an enterprise and a person, which provides a general model for solving problems.

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nonlinear thinking

Due to the long-term evolution of human beings, we are more inclined to understand the world in a "linear" way of thinking.

However, the nature of the world is nonlinear. The reason why some people in this world can achieve great success while most people are ordinary depends on whether their way of thinking is linear or nonlinear. ? The core of nonlinear thinking:

-? Understanding the world is nonlinear, jumping and unpredictable;

-? Understand the core reasons of qualitative change, accelerate or wait for the critical point to arrive, and gain huge benefits during the qualitative change period;

-? Have the courage to give up short-term benefits during the accumulation period and do things that help promote the last one (such as investing more principal and accumulating more work experience during the accumulation period). ?

There are five basic forms of nonlinear thinking: systematic dialectical thinking, divergent thinking, reverse thinking, intuitive thinking and inspirational thinking.

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Gestalt fusion thinking mode

To accomplish one thing, we need to have complete and clear logical thinking and integrate various elements. For example: human resources, material and financial resources, timing and environment.

It's like finishing the creation of a ceramic work:

In addition to creative drawings and ceramics, mud is also needed, which is equivalent to resources related to materials and money; Water, like people, needs to be combined with mud; The firing of ceramics also needs proper temperature and speed, which is like an invisible opportunity and background environment; Carving on ceramics is like dealing with the details of things. The order of what to do first and then what to do is also important.

Therefore, if a project wants to succeed, it needs not only possible planning, but also sufficient manpower preparation, decomposition and stratification, methodology support, process system incentive support, and? A stable and clear explanation of the breakdown of responsibilities and rights, as well as emergency plans and ideas. Only in this way can we get twice the result with half the effort.

Gestalt fusion thinking mode can be applied to: the execution of things, the thinking of the reasons for things, the prediction of people's judgments and so on. Only by considering enough factors, as well as the mutual support of the overall demand and the relationship between factors, can we make a more accurate judgment and analysis.

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Descartes mode of thinking

Descartes was a great philosopher. He put forward a bold view. How do you prove that the world is real? What can't be doubted in this world?

He thought and thought, but he never grasped the cornerstone. It was not until a certain moment that he suddenly realized. He realized that there was only one thing that could no longer be doubted: I was doubting it.

That is: me? So, think about it? Me? 10 am. This thing is certain, so I exist, so no matter whether the present world is true or not, there must be a world. And now the world, I don't know if it really exists.

This is critical thinking, boldly questioning everything. We think that the evolution of science is inheritance, but in fact it is subversion.

Almost all the next generation of scientists have subverted the previous generation. As Jobs said: Stay? Hungry, stay? Stupid; The god of stocks will say: the only thing I know is that I know nothing.

In people's cognitive experience, the more successful the paradigm in the past, the greater the constraint on themselves.

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Acquired prejudice thinking mode

People often misjudge one thing, not because they don't know anything; But because I pay too much attention to the known parts.

From the gestalt point of view, the information you know may be less than 5%, so the information you get may not only be unimportant, but also limited and biased. What life scenes will the acquired deviation appear in? For example:

1.？ When people are looking for a new job, it is often difficult to let go of what they have done.

2.？ Persistence, even stubbornness, to inherent ideas.

3.？ Nostalgia for useless old things

Many of us have encountered similar situations, and many things are useless but reluctant to throw away. As we all know, the entropy of the room is increasing, and because your living environment is not concise enough, you will become confused, dull and not worth the candle. In addition, it is difficult for new things to come in, and your life is gradually becoming inefficient and rigid.

How to overcome acquired deviation?

1.？ Lower yourself, be modest and open-minded;

2.？ Independent thinking, starting from the essence, using deduction instead of induction, reasoning with the essence of things, rather than constantly using previous experience;

3.？ Organize information to keep everything in order;

4.？ Re-analyze and evaluate the environment and information, which are reasonable, which are backward and which can be improved;

5.？ Know how to give up and let go;

6.？ Dynamic mentality, possession is only temporary, and change is eternal.

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Permutation and combination thinking mode

The permutation and combination model, like the compound interest model, is not only a mathematical tool, but also a way of thinking that can improve the quality of our decision. Many times, there are many factors that affect decision-making. Through classification, step by step, different arrangements and combinations can be formed. ?

Everything is made up of elements arranged and combined; Thinking is the movement of knowledge, the arrangement, combination and selection of knowledge; The unprecedented arrangement and combination of knowledge is innovation, and the externalization and materialization of objective and valuable thinking innovation is theoretical innovation and invention.

The essence of Charles Munger's multiple thinking mode is a multi-dimensional combined thought, which brings together different interdisciplinary knowledge to solve a problem. Different questions and disciplines have different weights, so the comprehensive consideration of questions is more comprehensive and the correct probability is higher. ? A big problem can be broken down into many related elements, so that we can see the whole problem clearly and then find the key points. Starting from the key points can get twice the result with half the effort.

Many factors are combined to see the problem more comprehensively, so as to avoid falling into the "hammer man" thinking in Charles Munger's mouth.

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Fermapaska system

Of all the qualities of knowledge, ability, hard work and patience, Charles Munger values rationality most.

Charles Munger said, "You must see the real world, not what you think or want. Only in this way can you make the right choice. " Fermapaska system is a basic tool to understand the real world. ?

Fermapaska system is the basic principle of probability theory. Life is full of temptations, and people make decisions according to their own experiences and psychological tendencies, thus falling into many traps.

Through the study and understanding of Fermapaska's system, it will be more rational to know the actual probability of things from cognition, and it will be more rational to make a decision after having a clear understanding.

Make these basic mathematical probability methods a part of our lives, so as not to give away our advantages.

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Prospect theory

Prospect theory is an important thinking model of risk decision-making. It is a theory that describes and predicts people's behavior in the process of risk decision-making proposed by psychologist Kahneman, a Nobel laureate in economics.

The analytical framework of prospect theory has three characteristics: first, most people are risk-averse when facing acquisition; Second, most people are risk-averse when facing losses; Third, people are more sensitive to loss than to gain.

Specifically:

1.？ Deterministic effect: "A bird in the hand is worth two in the bush". Between the certainty of income and "gambling", most people will choose the certainty of income and leave the burden for safety.

2.？ Reflection effect: To choose between a certain loss and "gambling", most people will choose "gambling".

3.？ Avoidance of losses: the happiness brought by the free collection of 100 yuan is hard to offset the pain brought by the loss of 100 yuan.

4.？ Obsessed with small probability events: many people have bought lottery tickets. Although the money won may be small, 99.99% of your money may support welfare and sports, but some people are lucky enough to fight small probability events.

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flow model

"Flow" refers to the state in which we are absorbed in doing something-you don't even feel the existence of time. When things are done, we will feel energetic and satisfied. ?

This is a theory about people's happiness, and the conditions for people to immerse themselves in the flow of mind require:

1.？ Clear goals, tasks with appropriate difficulty-no anxiety or boredom.

2.？ Timely feedback-satisfied with the progress. The reason why the game is so popular is that the design of the game conforms to the traffic theory. If we expand the definition of games to include study, work, sports and education, and evaluate whether what we do conforms to the three points of flow, it will be natural to live happily.

3.？ Give full play to your abilities.

4.？ Concentrate and have control over the things at hand? .

Flow state is the most beautiful and peaceful state that we can achieve in our work. Through a flow state, a new flow state will be produced. Successful people can successfully turn their lives into a pure state of flow. All parts of their lives are closely linked and all activities are meaningful.

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Occam's razor

Occam's razor law, also known as the simple law? This principle can be traced back at least to Aristotle's "natural selection of the shortest path". What is the core content? "If it is not necessary, don't add entities", which is a simple and effective principle. ?

According to the principle of minimum energy, our life should be as simple as possible, and the simple and effective way is to form good habits. Automatic transmission cars are gradually replacing manual transmission cars because automatic transmission conforms to the "simple and effective principle" of most users.

Facing the complicated investment market, we should pick up Occam's razor, simplify the complicated things, simplify our investment strategy, distinguish those things that cost a lot of money, time and energy, and then take measures to get rid of them.

Finally, it is summed up by Friedrich Maitland's famous saying: "Simplicity is the result of long-term efforts, not the starting point."