Mental models are the basic units which construct a person’s world view. Mental Models What’s a mental model? A mental model is a representation, inside your head, of an external reality. How do you do that? By learning the mental models. Instead the strategy should be to race through numerous problems and quickly identify the solvable ones. You don’t want to spend a disproportionate amount of time analysing a single problem.
At same time, our world and life is full of opportunities, disguised as problems and challenges, which need to be either pursued or avoided. To think we can fit it all into our heads is a logical absurdity. We live in a world that is not only complex but vastly older and bigger than we are. And one reason for inadequacy of human perception is that it has to deal with an enormously complex real world.
But because it serves us so well, it’s easy to forget how limited perception really is. In fact, our perception is good enough to guide us through a very complex world with few problems. Most of the time, that’s fine…because our perceptions serve us quite well. We seldom stop to wonder whether the world we perceive matches the real world outside. The question is where do we begin? We often go through each day without questioning our perception of the world. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you. Introduction | Mental Models, Investing, And You machines. Image Source: Poor Charlie’s Almanack Charlie Munger, the inimitable partner of Warren Buffett, has been saying the same thing for years – I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning So it’s time that we recognize not just the importance but the urgency of the need to become a learning machine. To stay relevant, we need to make sure that we remain valuable to the society in a way which can’t be substituted by a robot. The day is not far where our work and skills will be threatened by an artificial intelligence. Introduction The world around us is changing pretty fast and the modern computers are becoming cheaper, faster and more intelligent than ever which means they are ready to replace a large part of human workforce. TABLE OF CONTENTS | Mental Models, Investing, And YouĬhapter 45: Permutations and Combinations TABLE OF CONTENTS | Mental Models, Investing, And You Chapter 24: Complex Adaptive SystemsĬhapter 29: Law of Diminishing Marginal Utility Chapter 4: Contrast Mis-reaction TendencyĬhapter 5: Deprival Super Reaction Syndrome