henry copeland:

Charlie Munger: learn multiple models to avoid rigid analyses

Rule #1: Learn Multiple Models “The first rule is that you’ve got to have multiple models—because if you just have one or two that you’re using, the nature of human psychology is such that you’ll torture reality so that it fits your models.” “It’s like the old saying, ‘To the man with only a hammer, every problem looks like a nail.’ But that’s a perfectly disastrous way to think and a perfectly disastrous way to operate in the world.” Rule #2: Learn Multiple Models From Multiple Disciplines “And the models have to come from multiple disciplines—because all the wisdom of the world is not to be found in one little academic department.” Rule #3: Focus On Big Ideas From The Big Disciplines (20% Of Models Create 80% Of The Results) “You may say, ‘My God, this is already getting way too tough.’ But, fortunately, it isn’t that tough—because 80 or 90 important models will carry about 90% of the freight in making you a worldly-wise person. And, of those, only a mere handful really carry very heavy freight.” Rule #4: Use A Checklist To Ensure You’re Factoring in the Right Models “Use a checklist to be sure you get all of the main models.” “How can smart people be wrong? Well, the answer is that they don’t…take all the main models from psychology and use them as a checklist in reviewing outcomes in complex systems.” Rule #5: Create Multiple Checklists And Use The Right One For The Situation “You need a different checklist and different mental models for different companies. I can never make it easy by saying, ‘Here are three things.’ You have to drive it yourself to ingrain it in your head for the rest of your life.”
- www.forbes.com