Wisdom is knowing the consequences of your actions, which comes from the alignment between facts and reasoning. The people that do that fail at work and fail in life. Worldly wisdom is not simply memorizing things and repeating them back. Charlie munger A Latticework of Mental Models You’ve got to have models in your head and you’ve got to array you experience – both vicarious and direct – onto this latticework of mental models. Let’s take a look at the best general models. Understanding them positions you to make fewer errors, see things others miss, and take better actions. While there are a lot of specific mental models, only a handful of general ones come from the big disciplines. Looking through them both reveals more than each one individually. Looking through one lens lets you see one thing, and looking through another reveals something different. Each lens offers a different perspective, revealing new information. Think of each model as a lens through which you can see the world. Just as knowing where to stand can turn a good photo into a great one, changing your perspective on a situation reveals critical information and offers new solutions. The best way to reduce our blind spots is to change our perspective. You’d play your hand perfectly in a poker game where you could see everyone’s cards. If you had perfect information, you would always make the best decision. The source of all poor choices is blind spots. In life and business, the person with the fewest blind spots wins. Relativity is a mental model that shows us we have blind spots and how a different perspective can reveal new information. Margin of Safety is a mental model that helps you understand that things don’t always go as planned. Reciprocity is a mental model that helps you understand how going positive and going first gets the world to do most of the work for you. For example, velocity is a mental model that helps you understand that both speed and direction matter. Mental models help us understand the world. Models concentrate the world into understandable and useable chunks. Like a map, mental models reveal key information while ignoring irrelevant details. Any idea, belief, or concept can be distilled down. A mental model is a compression of how something works.

Actor observer bias psych 100