Seeking Wisdom: From Darwin to Munger, 3rd Edition
Peter Bevelinwww.poorcharliesalmanack.com
PERMISSION ACKNOWLEDGMENTS 5
ACKNOWLEDGMENTS 6
CONTENTS 7
INTRODUCTION 8
The Second Edition 11
The Third Edition 11
PART ONE: WHAT INFLUENCES OUR THINKING? 12
01: OUR ANATOMY SETS THE LIMITS FOR OUR BEHAVIOR 13
What we feel and think depends on neural connections 14
Genes control brain chemistry but are turned on and off by the environment 15
Interaction and flexibility characterize our biological functions 17
Neural connections are shaped by life experiences 18
Behavior is influenced by our state of mind 19
02: EVOLUTION SELECTED THE CONNECTIONS THAT PRODUCE USEFUL BEHAVIOR FOR SURVIVAL AND REPRODUCTION 21
Mutations cause variations 21
Natural selection 21
Darwin made the following three observations 22
The evidence for evolution 24
Guidance through values and life experiences 26
The hunter-gatherer environment has formed our basic nature 29
03: ADAPTIVE BEHAVIOR FOR SURVIVAL AND REPRODUCTION 31
The individual comes first 31
Often cooperation is in our best interest 32
A tendency for fear 34
Seeking explanations 36
Making fast classifications 37
Males and females have different priorities 37
The Social Animal 39
Much of our psychology is the result of cultural influences 42
Our basic nature 43
Some decisions are not in our best interest 44
PART TWO: THE PSYCHOLOGY OF MISJUDGMENTS 47
01: MISJUDGMENTS EXPLAINED BY PSYCHOLOGY 48
02: PSYCHOLOGICAL REASONS FOR MISTAKES 51
I. MERE ASSOCIATION 51
Keep in mind 52
2. REWARD AND PUNISHMENT 53
Keep in mind 57
3. SELF-INTEREST AND INCENTIVES 58
Keep in mind 63
4. SELF-SERVING TENDENCIES AND OPTIMISM 63
Keep in mind 67
5. SELF-DECEPTION AND DENIAL 68
Keep in mind 68
6. CONSISTENCY 69
Keep in mind 74
7. DEPRIVAL SYNDROME 76
Keep in mind 79
8. STATUS Quo AND Do-NOTHING SYNDROME 80
Keep in mind 81
9. IMPATIENCE 81
Keep in mind 82
10. ENVY AND JEALOUSY 82
Keep in mind 82
II. CONTRAST COMPARISON 83
Keep in mind 85
12. ANCHORING 85
Keep in mind 86
13. VIVIDNESS AND RECENCY 86
Keep in mind 87
14. OMISSION AND ABSTRACT BLINDNESS 87
Keepinmind 88
15. RECIPROCATION 89
Keepinmind 90
16. LIKING AND SOCIAL ACCEPTANCE 90
Keep in mind 92
17. SOCIAL PROOF 93
Keep in mind 97
18. AUTHORITY 98
Keep in mind 99
19. SENSEMAKING 100
Keep in mind 102
20. REASON-RESPECTING 103
Keep in mind 104
21. BELIEVE FIRST AND DOUBT LATER 105
Keep in mind 106
22. MEMORY LIMITATIONS 106
Keep in mind 107
23. DO-SOMETHING SYNDROME 108
Keep in mind 109
24. SAY-SOMETHING SYNDROME 109
Keep in mind 109
25. EMOTIONS 110
Keep in mind 111
26.STRESS 112
Keep in mind 113
27. PAIN, CHEMICALS AND DISEASES 114
28. MULTIPLE TENDENCIES 114
CONTEXTUAL INFLUENCES 117
SOME FINAL ADVICE FROM CHARLES MUNGER 121
PART THREE: THE PHYSICS AND MATHEMATICS OF MISJUDGMENTS 124
1. Systems thinking 125
2. Scale and limits 125
3. Causes 125
4. Numbers and their meaning 126
5. Probabilities and number of possible outcomes 126
6. Scenarios 126
7. Coincidences and miracles 127
8. Reliability of case evidence 127
9. Misrepresentative evidence 127
01: SYSTEMS THINKING 128
Wanted and unwanted consequences 128
The whole system 129
The reaction of others 131
The winner's curse 131
Predictions 133
02: SCALE AND LIMITS 137
Scale of size and time 137
Breakpoints, critical thresholds and limits 139
Breakpoints, critical thresholds and limits 141
Size and frequency 143
Constraints 144
03: CAUSES 145
Large effects 145
Random events 146
Acting on symptoms 146
Multiple causes 147
Mistaking correlation for cause 147
Alternative explanations 148
Selective data and appropriate comparisons 148
04: NUMBERS AND THEIR MEANING 151
Use basic math to count, quantify, and understand relationships 151
The effect of exponential growth 152
The time value of money 153
05: PROBABILITIES AND NUMBER OF POSSIBLE OUTCOMES 154
Number of possible outcomes 158
Low frequency events 159
Mathematical expectation 161
Chance has no memory 162
Controlling chance events 163
Gains, losses and utility 164
The consequences of low frequency events 165
The consequences of being wrong 165
06: SCENARIOS 168
Systems construction and planning processes 168
Systems failure and accidents 171
Safety factor 174
07: COINCIDENCES AND MIRACLES 175
Coincidences 175
Making up causes for chance events 176
Believing in miracles 177
08: RELIABILITY OF CASE EVIDENCE 179
Prior probabilities 179
09: MISREPRESENTATIVE EVIDENCE 186
Conditions, environments and circumstances change 186
The single case or unrepresentative samples 187
Chance and performance 188
Ignoring failures 189
Variability 190
Effects of regression 193
Post Mortem 194
PART FOUR: GUIDELINES TO BETTER THINKING 196
01: Explore tools that provide a foundation for rational thinking 197
MODELS OF REALITY 197
What characterizes a useful model? 198
Considering many ideas help us achieve a holistic view 199
How can we learn an idea so it sticks in our memory? 201
Search for explanations 202
02: MEANING 207
Ask "What happens?" 209
03: SIMPLIFICATION 220
Simplify the way we do things 220
Avoid certain things 222
Focus leads to understanding and efficiency 223
Focus on what you can know and that makes a difference 224
Ask the right questions 224
Patience 225
04: RULES AND FILTERS 226
Filters 227
Elimination 229
Checklist procedures 229
05: GOALS 231
06: ALTERNATIVES 233
Opportunity cost 233
07: CONSEQUENCES 236
08: QUANTIFICATION 239
09: EVIDENCE 246
The methods of science 246
Problem or observation 247
Guess why 247
Predict consequences 247
Test 247
Finding evidence from the past 248
Observation 248
Explanation 249
Predictability 249
Continuation and Change 249
Certainty and Consequences 249
Falsify and disprove 249
10: BACKWARD THINKING 252
11: RISK 256
A fool and his money are soon parted 257
The consequences of being wrong 258
Margin of safety 258
12: ATTITUDES 260
Life is long if we know how to use it 260
Be honest 262
Act as an exemplar 263
Treat people fairly 264
Don't take life too seriously 264
Have reasonable expectations 265
Live in the present 266
Be curious and open-minded. Always ask "why" 266
The End 266
APPENDIX ONE - CHARLES T. MUNGER HARVARD SCHOOL COMMENCEMENT SPEECH - JUNE 13, 1986 267
Prescriptions for Guaranteed Misery in Life 267
APPENDIX TWO - WISDOM FROM CHARLES T. MUNGER AND WARREN E. BUFFETT 271
On how to change people 271
On some reasons to why managers don't make rational decisions 272
On the difficulty of replacing a CEO 272
On the kind of people we should do business with 273
On picking up the right character traits 274
On overconfidence 274
On some reasons to why bad lending happen so often 275
On the value of math 276
On advantages of scale 276
On disadvantages of scale 278
On how to get worldly wisdom 279
On what something really mean 279
On 3 timeless ideas for investing 280
On how to evaluate businesses 280
On commodity businesses 281
On paying cash out or keeping it in the business 282
On how to avoid problems 282
On the real risk of investing 283
On the difficulty of developing a fair social system 283
APPENDIX THREE - PROBABILITY 285
Definitions 285
How do we decide the probability of an event? 286
The logical way 286
Relative frequency 286
Subjective probability 287
Rules of probability 287
Counting possible outcomes 289
The binomial distribution 290
Calculations to some of the examples 292
APPENDIX FOUR - CHECKLISTS 294
Use notions 294
What is the issue? 294
Understand what it means 294
Filters and Rules 295
What do I specifically and measurable want to achieve and avoid and when and why? 295
What is the canse of that? 295
What available alternatives do I have to achieve my goal? 296
What ate the consequences? 296
Bias 297
The hypothesis 297
Look for evidence and judge the evidence 297
Disprove my (or others) conclusion by thinking like a prosecutor 298
What is the downside? 299
What are the consequences if I am wrong? 299
What is the value? 299
What yardstick can be used to measure progress or to measure things against? 300
How act now? 300
Have I made an active decision? 300
Post mortem or learning from mistakes 300
What exacdy is the problem? 300
WHAT ARE THE LIKELY CONSEQUENCES CONSIDERING HUMAN BEHAVIOR? 301
What is causing me to do this? 301
What is the context? 301
Can I judge him? 301
What is in his self-interest to do? 301
What are the psychological tendencies and shortcuts that influence him and can cause misjudgment? 301
What are the consequences? 301
What system would I like to have if the roles were reversed? 302
Is this the right system? 302
BUSINESS EVALUATION 302
Filter 1 - Can I understand the business - predictability? 302
Filter 2 - Does it look like the business has some kind of sustainable competitive advantage? 302
Filter 3 - Able and honest management? 303
Filter 4 - Is the price right? 303
Filter 5 - Disprove 303
Filter 6 - What are the consequences ifI'm wrong? 303
SOURCE NOTES 304
BIBLIOGRAPHY 314
PERMISSION ACKNOWLEDGMENTS......Page 5
ACKNOWLEDGMENTS......Page 6
CONTENTS......Page 7
INTRODUCTION......Page 8
The Third Edition......Page 11
PART ONE: WHAT INFLUENCES OUR THINKING?......Page 12
01: OUR ANATOMY SETS THE LIMITS FOR OUR BEHAVIOR......Page 13
What we feel and think depends on neural connections......Page 14
Genes control brain chemistry but are turned on and off by the environment......Page 15
Interaction and flexibility characterize our biological functions......Page 17
Neural connections are shaped by life experiences......Page 18
Behavior is influenced by our state of mind......Page 19
Natural selection......Page 21
Darwin made the following three observations......Page 22
The evidence for evolution......Page 24
Guidance through values and life experiences......Page 26
The hunter-gatherer environment has formed our basic nature......Page 29
The individual comes first......Page 31
Often cooperation is in our best interest......Page 32
A tendency for fear......Page 34
Seeking explanations......Page 36
Males and females have different priorities......Page 37
The Social Animal......Page 39
Much of our psychology is the result of cultural influences......Page 42
Our basic nature......Page 43
Some decisions are not in our best interest......Page 44
PART TWO: THE PSYCHOLOGY OF MISJUDGMENTS......Page 47
01: MISJUDGMENTS EXPLAINED BY PSYCHOLOGY......Page 48
I. MERE ASSOCIATION......Page 51
Keep in mind......Page 52
2. REWARD AND PUNISHMENT......Page 53
Keep in mind......Page 57
3. SELF-INTEREST AND INCENTIVES......Page 58
4. SELF-SERVING TENDENCIES AND OPTIMISM......Page 63
Keep in mind......Page 67
Keep in mind......Page 68
6. CONSISTENCY......Page 69
Keep in mind......Page 74
7. DEPRIVAL SYNDROME......Page 76
Keep in mind......Page 79
8. STATUS Quo AND Do-NOTHING SYNDROME......Page 80
9. IMPATIENCE......Page 81
Keep in mind......Page 82
II. CONTRAST COMPARISON......Page 83
12. ANCHORING......Page 85
13. VIVIDNESS AND RECENCY......Page 86
14. OMISSION AND ABSTRACT BLINDNESS......Page 87
Keepinmind......Page 88
15. RECIPROCATION......Page 89
16. LIKING AND SOCIAL ACCEPTANCE......Page 90
Keep in mind......Page 92
17. SOCIAL PROOF......Page 93
Keep in mind......Page 97
18. AUTHORITY......Page 98
Keep in mind......Page 99
19. SENSEMAKING......Page 100
Keep in mind......Page 102
20. REASON-RESPECTING......Page 103
Keep in mind......Page 104
21. BELIEVE FIRST AND DOUBT LATER......Page 105
22. MEMORY LIMITATIONS......Page 106
Keep in mind......Page 107
23. DO-SOMETHING SYNDROME......Page 108
Keep in mind......Page 109
25. EMOTIONS......Page 110
Keep in mind......Page 111
26.STRESS......Page 112
Keep in mind......Page 113
28. MULTIPLE TENDENCIES......Page 114
CONTEXTUAL INFLUENCES......Page 117
SOME FINAL ADVICE FROM CHARLES MUNGER......Page 121
PART THREE: THE PHYSICS AND MATHEMATICS OF MISJUDGMENTS......Page 124
3. Causes......Page 125
6. Scenarios......Page 126
9. Misrepresentative evidence......Page 127
Wanted and unwanted consequences......Page 128
The whole system......Page 129
The winner's curse......Page 131
Predictions......Page 133
Scale of size and time......Page 137
Breakpoints, critical thresholds and limits......Page 139
Breakpoints, critical thresholds and limits......Page 141
Size and frequency......Page 143
Constraints......Page 144
Large effects......Page 145
Acting on symptoms......Page 146
Mistaking correlation for cause......Page 147
Selective data and appropriate comparisons......Page 148
Use basic math to count, quantify, and understand relationships......Page 151
The effect of exponential growth......Page 152
The time value of money......Page 153
05: PROBABILITIES AND NUMBER OF POSSIBLE OUTCOMES......Page 154
Number of possible outcomes......Page 158
Low frequency events......Page 159
Mathematical expectation......Page 161
Chance has no memory......Page 162
Controlling chance events......Page 163
Gains, losses and utility......Page 164
The consequences of being wrong......Page 165
Systems construction and planning processes......Page 168
Systems failure and accidents......Page 171
Safety factor......Page 174
Coincidences......Page 175
Making up causes for chance events......Page 176
Believing in miracles......Page 177
Prior probabilities......Page 179
Conditions, environments and circumstances change......Page 186
The single case or unrepresentative samples......Page 187
Chance and performance......Page 188
Ignoring failures......Page 189
Variability......Page 190
Effects of regression......Page 193
Post Mortem......Page 194
PART FOUR: GUIDELINES TO BETTER THINKING......Page 196
MODELS OF REALITY......Page 197
What characterizes a useful model?......Page 198
Considering many ideas help us achieve a holistic view......Page 199
How can we learn an idea so it sticks in our memory?......Page 201
Search for explanations......Page 202
02: MEANING......Page 207
Ask "What happens?"......Page 209
Simplify the way we do things......Page 220
Avoid certain things......Page 222
Focus leads to understanding and efficiency......Page 223
Ask the right questions......Page 224
Patience......Page 225
04: RULES AND FILTERS......Page 226
Filters......Page 227
Checklist procedures......Page 229
05: GOALS......Page 231
Opportunity cost......Page 233
07: CONSEQUENCES......Page 236
08: QUANTIFICATION......Page 239
The methods of science......Page 246
Test......Page 247
Observation......Page 248
Falsify and disprove......Page 249
10: BACKWARD THINKING......Page 252
11: RISK......Page 256
A fool and his money are soon parted......Page 257
Margin of safety......Page 258
Life is long if we know how to use it......Page 260
Be honest......Page 262
Act as an exemplar......Page 263
Don't take life too seriously......Page 264
Have reasonable expectations......Page 265
The End......Page 266
Prescriptions for Guaranteed Misery in Life......Page 267
On how to change people......Page 271
On the difficulty of replacing a CEO......Page 272
On the kind of people we should do business with......Page 273
On overconfidence......Page 274
On some reasons to why bad lending happen so often......Page 275
On advantages of scale......Page 276
On disadvantages of scale......Page 278
On what something really mean......Page 279
On how to evaluate businesses......Page 280
On commodity businesses......Page 281
On how to avoid problems......Page 282
On the difficulty of developing a fair social system......Page 283
Definitions......Page 285
Relative frequency......Page 286
Rules of probability......Page 287
Counting possible outcomes......Page 289
The binomial distribution......Page 290
Calculations to some of the examples......Page 292
Understand what it means......Page 294
What is the canse of that?......Page 295
What ate the consequences?......Page 296
Look for evidence and judge the evidence......Page 297
Disprove my (or others) conclusion by thinking like a prosecutor......Page 298
What is the value?......Page 299
What exacdy is the problem?......Page 300
What are the consequences?......Page 301
Filter 2 - Does it look like the business has some kind of sustainable competitive advantage?......Page 302
Filter 6 - What are the consequences ifI'm wrong?......Page 303
SOURCE NOTES......Page 304
BIBLIOGRAPHY......Page 314
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A Wall Street Journal Bestseller! "You can't really know anything if you just remember isolated facts. If the facts don't hang together on a latticework of theory, you don't have them in a usable form. You've got to have models in your head." - Charlie Munger, investor, vice chairman of Berkshire Hathaway The world's greatest problem-solvers, forecasters, and decision-makers all rely on a set of frameworks and shortcuts that help them cut through complexity and separate good ideas from bad ones. They're called mental models, and you can find them in dense textbooks on psychology, physics, economics, and more. Or, you can just read Super Thinking, a fun, illustrated guide to every mental model you could possibly need. How can mental models help you? Well, here are just a few examples... If you've ever been overwhelmed by a to-do list that's grown too long, maybe you need the Eisenhower Decision Matrix to help you prioritize. Use the 5 Whys model to better understand people's motivations or get to the root cause of a problem. Before concluding that your colleague who messes up your projects is out to sabotage you, consider Hanlon's Razor for an alternative explanation. Ever sat through a bad movie just because you paid a lot for the ticket? You might be falling prey to Sunk Cost Fallacy . Set up Forcing Functions , like standing meeting or deadlines, to help grease the wheels for changes you want to occur. So, the next time you find yourself faced with a difficult...
Mental Models : 30 thinking tools that separate the average from the exceptional. Improved decision - makeing, logical analysis, and problem-solving
30 Practical and applicable guidelines to think smarter, faster, and with expert insight (even if you aren't one). Mental models are like giving a treasure map to someone lost in the woods. They provide instant understanding, context, and most importantly, a path to the end destination . Now imagine having such a map for all problems and decisions in your life. Battle information overwhelm, focus on what really matters, and make complex decisions with speed and confidence. Mental Models: 30 Thinking Tools sheds light on true intelligence: it's not about knowledge and knowing the capitals of all the countries in the world. It's about how you think , and each mental model is a specific framework on how to think smart and with insight. You can approach the world by trying to analyze each piece of information separately, or you can learn mental models that do the work for you. Learn how billionaires/CEOs, Olympic athletes, and scientists think differently and avoid mistakes. Peter Hollins has studied psychology and peak human performance for over a dozen years and is a bestselling author. He has worked with a multitude of individuals to unlock their potential and path towards success. His writing draws on his academic, coaching, and research experience.
The Great Mental Models Volume 1: General Thinking Concepts
Farnam Street, Shane Parrish, Rhiannon Beaubien
The old saying goes, ''To the man with a hammer, everything looks like a nail.'' But anyone who has done any kind of project knows a hammer often isn't enough. The more tools you have at your disposal, the more likely you'll use the right tool for the job - and get it done right. The same is true when it comes to your thinking. The quality of your outcomes depends on the mental models in your head. And most people are going through life with little more than a hammer. Until now. The Great Mental Models: General Thinking Concepts is the first book in The Great Mental Models series designed to upgrade your thinking with the best, most useful and powerful tools so you always have the right one on hand. This volume details nine of the most versatile, all-purpose mental models you can use right away to improve your decision making, productivity, and how clearly you see the world. You will discover what forces govern the universe and how to focus your efforts so you can harness them to your advantage, rather than fight with them or worse yet- ignore them. Upgrade your mental toolbox and get the first volume today. AUTHOR BIOGRAPHY Farnam Street (FS) is one of the world's fastest growing websites, dedicated to helping our readers master the best of what other people have already figured out. We curate, examine and explore the timeless ideas and mental models that history's brightest minds have used to live lives of purpose. Our readers include students, teachers, CEOs, coaches,...
探索智慧:从达尔文到芒格=Seeking Wisdom: From Darwin to Munger
致 谢 前 言 第一章 谁动了我的“思维”? 第一节 人体解剖结构限制了我们的行为 第二节 进化偏爱于那些能提高生存和繁衍机会的 神经连接 第三节 生存和繁衍的适应性行为 第二章 误判心理学 第一节 从心理学角度解释误判 第二节 导致错误的心理原因 第三章 误判物理学和误判数学 第一节 系统思考 第二节 尺寸和极限 第三节 原因 第四节 数字和意义 第五节 概率和可能性结果 第六节 方案 第七节 巧合和奇迹 第八节 例证的信度 第九节 非典型性证据 第四章 思维能力训练指南 第一节 基于现实的模型 第二节 意义 第三节 简化 第四节 规则和过滤器 第五节 目标 第六节 多项选择 第七节 结果 第八节 量化 第九节 证据 第十节 逆向思维 第十一节 风险 第十二节 态度 附录 1 哈佛高中毕业典礼演讲 查理·芒格 附录 2 来自于查理·芒格和沃伦·巴菲特的智慧 附录 3 概率 附录 4 清单 后记 张志雄
The Great Mental Models, Volume 2: Physics, Chemistry and Biology
Farnam Street, Shane Parrish, Rhiannon Beaubien
This is the second book in The Great Mental Models series and the highly anticipated follow up to the Wall Street Journal best seller, Volume 1: General Thinking Concepts . We tend to isolate the things we know in the domain we learned it. For example: -What does the inertia of a rolling stone have to do with perseverance and being open minded? -How can the ancient process of steel production make you a more creative and innovative thinker? -What does the replication of our skin cells have to do with being a stronger and more effective leader? On the surface, these concepts may appear to be dissimilar and unrelated. But the surprising truth is the hard sciences (physics, chemistry, and biology) offer a wealth of useful tools you can use to develop critically important skills like: - Relationship building - Leadership - Communication - Creativity - Curiosity - Problem solving - Decision-making This second volume of the Great Mental Models series shows you how to make those connections. It explores the core ideas from the hard sciences and offers nearly two dozen models to add to your mental toolbox. You'll not only get a better understanding of the forces that influence the world around you, but you'll learn how to direct those forces to create outsized advantages in the areas of your life that matter most to you.
Antifragile: Things That Gain from Disorder (Incerto Book 3)
Nassim Nicholas Taleb, Nassim Nicholas Taleb, Genís Sánchez Barberán, Albino Santos Mosquera
Nassim Nicholas Taleb, the bestselling author of The Black Swan and one of the foremost thinkers of our time, reveals how to thrive in an uncertain world. Just as human bones get stronger when subjected to stress and tension, and rumours or riots intensify when someone tries to repress them, many things in life benefit from stress, disorder, volatility, and turmoil. What Taleb has identified and calls “antifragile” is that category of things that not only gain from chaos but need it in order to survive and flourish. In Antifragile, Taleb stands uncertainty on its head, making it desirable, even necessary, and proposes that things be built in an antifragile manner. The antifragile is beyond the resilient or robust. The resilient resists shocks and stays the same; the antifragile gets better and better. Erudite, witty, and iconoclastic, Taleb’s message is revolutionary: The antifragile, and only the antifragile, will make it.“Taleb takes on everything from the mistakes of modern architecture to the dangers of meddlesome doctors and how overrated formal education is. . . . An ambitious and thought-provoking read . . . highly entertaining.” - The EconomistNassim Nicholas Taleb spent 21 years as a risk taker (quantitative trader) before becoming a flaneur and researcher in philosophical, mathematical and (mostly) practical problems with probability. He is the author of a multivolume essay, the Incerto (The Black Swan, Fooled by Randomness, Antifragile, and Skin in the...