The Big Idea: Better mental models (frameworks) mean better thinking.
Introduction: Acquiring Wisdom
In life and business, the person with the fewest blind spots wins.
This book is about avoiding problems.
Our failures to update from interacting with reality spring primarily from three things: not having the right perspective or vantage point, ego-induced denial, and distance from the consequences of our decisions.
The first flaw is perspective.
The second flaw is ego.
The third flaw is distance.
Better models mean better thinking.
Removing blind spots means thinking through the problem using different lenses or models.
We’re much like the blind men in the classic parable of the elephant.
Sharing knowledge, or learning the basics of the other disciplines, leads to a more well-rounded understanding that would allow for better initial decisions.
If you get into the mental habit of relating what you’re reading to the basic structure of the underlying ideas being demonstrated, you gradually accumulate some wisdom. –Charlie Munger1
- The Map is not the Territory
Maps can’t show everything
Remember that all models are wrong; the practical question is how wrong do they have to be to not be useful.
Maps, and models, help us understand and relate to the world around us. They are flawed but useful.
- Circle of Competence
A circle of competence cannot be built quickly.
There are three key practices needed in order to build and maintain a circle of competence: curiosity and a desire to learn, monitoring, and feedback.
It is also important to remember that no one can have a circle of competence that encompasses everything.
Supporting Idea: Falsifiability
Trend is not destiny.
The feedings appear as a law until the day the chicken gets its head chopped off.
- First Principles Thinking
If we never learn to take something apart, test our assumptions about it, and reconstruct it, we end up bound by what other people tell us — trapped in the way things have always been done.
There are two techniques we can use: Socratic questioning and the Five Whys.
Why do I think this?
How do I know this is true?
How can I back this up?
What might others think?
What if I am wrong?
First principles thinking helps us avoid the problem of relying on someone else’s tactics without understanding the rationale behind them.
- Thought Experiment
Imagining physical impossibilities.
Intuiting the non-intuitive.
- Second-Order Thinking
Second-order thinking is thinking farther ahead and thinking holistically.
Second-order thinking can be used to great benefit: for prioritizing long-term interests over immediate gains and for constructing effective arguments.
- Probabilistic Thinking
In a world where each moment is determined by an infinitely complex set of factors, probabilistic thinking helps us identify the most likely outcomes.
Seek out situations that we expect have good odds of offering us opportunities.
Never take a risk that will do you in completely.
Learn from your failures
Supporting Idea: Causation vs. Correlation
Inversion allows us to flip the problem around and think backward. Sometimes it’s good to start at the beginning, but it can be more useful to start at the end.
Avoiding stupidity is easier than seeking brilliance.
Instead, we can try inverting the goal. It becomes, not getting rich, but avoiding being poor.
Inversion leads to innovation.
- Occam’s Razor
One important counter to Occam’s Razor is the difficult truth that some things are simply not that simple.
Of course, focusing on simplicity when all others are focused on complexity is a hallmark of genius, and it’s easier said than done.
- Hanlon’s Razor
Hanlon’s Razor states that we should not attribute to malice that which is more easily explained by stupidity.