Mental Models

You win by focusing on making fewer mistakes

(Excerpt from Extraordinary Tennis Ordinary Players by Simon Ramo) In expert tennis, about 80 per cent of the points are won; in amateur tennis, about 80 per cent of the points are lost. In other words, professional...

April 11, 2020| Inversion, Via Negativa Read More

You win by losing less

(Excerpt from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) He Charlie Munger claimed that his best ideas haven’t done better than others’ best ideas, but he’s lost less on his worst...

April 11, 2020| Fallibility, Inversion, Investing, Via Negativa Read More

Globalisation introduces volatility spikes

(Excerpt from “The Interesting Times” email 21 Mar 2020 by Taylor Pearson) As a thought experiment, imagine 100 ladders lined up against a long wall. Each has a 10% probability of falling over. If the...

March 22, 2020| Entropy, Investing, Nonlinearity, World Read More

A mistake is made if you had legit confidence about something but you fail to act big

(Extracted from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Munger observed that the most extreme mistakes in Berkshire’s history show up as opportunity costs. … In his younger...

March 20, 2020| Circle of Competence, Investing, Kelly Criterion, Life Read More

Subtracting benefits as a market position

(Excerpt from The Star Principle by Richard Koch) Subtracting benefits is important because it usually enables the new category to lower costs, and/or to substitute the new benefits without charging more, because of...

February 20, 2020| Strategy, Via Negativa Read More

Wisdom via negativa

To attain knowledge, add things every day. To attain wisdom, remove things every day. Lao Tzu...

February 19, 2020| Via Negativa Read More

Which business idea should you pursue – is it a star venture.

(Excerpt from The Star Principle by Richard Koch) you can forget about more than 95 per cent of the ideas you may have. For every 20 ideas you have, you can junk 19 of them, confidently and securely, without doing any...

February 18, 2020| Focus, Strategy, Via Negativa Read More

Brainstorm with 15 people and make decisions with 5

(Extracted from The Economist 25 Jan 2020; Bartley column titled The Number of the Best) Dunbar observes that humans tend to have five intimate friends, 15 or so good friends, around 50 social friends and 150-odd...

January 30, 2020| Dunbar’s Number Read More

You are more open to learning if you assume you are below-average

(Excerpt from Hell Yeah! or Hell No! By Sam Kyle) Ninety-six percent of cancer patients claim to be in better health than the average cancer patient. Ninety-four percent of professors say they are better-than-average...

January 28, 2020| Inversion, Overconfidence Bias Read More

Is It Better to Overestimate or Underestimate Yourself?

(Excerpt from Motherfucking Monday on 20 Jan 20 by Mark Manson) We all have a tendency to overestimate ourselves and our abilities and this often causes a lot of unnecessary pain. A huge part of self-awareness is the...

January 23, 2020| Ego, Life, Yin Yang Read More

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