Charlie Munger: Mental Models for the Rest of Your Life (PART 5)

Charlie Munger, the vice chairman of Berkshire Hathaway and one of the most successful investors ever, is said to have the best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you can even finish the sentence.

How does he do it? Through observing reality and running it against his mental models. In this series of videos, you’ll learn some of the most important models which Charlie Munger uses, which he has talked about publicly. These mental models have helped Munger to conquer the stock market, but they are so diverse that they have applications within many other areas too. For example, they have allowed Munger to be a successful Chairman at a large hospital, and they have allowed him to overcome devastating personal losses.

The series will cover a total of 35 of Charlie’s mental models. He says he has some 100 models in his head at all times, but he also says that a few of them carry most of the freight. I think that we’ll cover the most important ones in this series, which will be divided into 7 parts, will 5 models in each one. The models will primarily be related to investing, but also to associated subjects such as economics, entrepreneurship & career. Hope you enjoy.

The mental models covered in this episode are:
00:00 Intro
01:09 Physics Envy
04:03 Vaguely Right Beats Precisely Wrong
06:02 Secondary and Tertiary Effects
09:03 The Cancer Surgery Formula
10:59 Scale

- The Swiss Army Knife Approach
- Make Friends With the Eminent Dead
- Invert, Always Invert
- Compounding
- Crush Your Cherished Beliefs

- Opportunity Costs
- Parimutuel Betting
- Survival of the Fittest
- Margin of Safety
- The Superpower of Incentives

- Independent Thinking
- Simplicity
- Technology as a Problem
- The World’s Most Intelligent Question
- Circle of Competence

- Filters
- The Fat-Pitch Strategy
- Because You are Worth it
- Probability Mindset
- The Bell Curve

My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there – investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties – I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process – upgrading your money-making toolbox.

[beeraert]

It is beautiful to see how much patience and dedication you put into constructing these informative videos. Keep doing you, sir.

One of the best investing video series on the platform!

[MrGlobalxD]

You are such an amazing Youtuber, so undervalued. I consider you as marvelous bet with a great margin of safety :D

[vincenzoisoldi]

Thank you so much for this series! I love Charlie Munger. He often talks about his using of mental models, human psychology, and filters to find good investments. You finding these models and breaking them down in an entertaining, easy to understand way is pure gold! Your channel is one of the best investing channels on the internet. Wish you the best in your investments. Cheers.

[CookbookAdventures]

Just wanted to thank you for making the series and this channel. Really great stuff, wonderful idea. Been bingeing your channel the last few days.

[jasondupreez]

Totally agree! Fans of people who have made it in life. Over and over again. Thanks for a great channel all the way from South Africa.

[griffsfurnitureemporium]

This has been such an incredibly great series. Fantastic job!!!

[griffsfurnitureemporium]

‘The best way to get what you want is deserve what you want’

One of my top
Mungerism

[bobbygeorge]

530AM watching part 5 Lol, Its almost like putting yourself through a berkshire university in sweden.

[librosDeCrecimiento]

you are one of a kind youtuber keep up the good stuff my man

[SeedingV]

I'm from Vietnam. Thank you very much! Video wonderful

[chuckdiezel]

Big fan of your channel thanks for the content!

[vvmanimadhuri]

Curious to know if the company you mentioned is Reliance industries!

[rohitrajsarraf]

Where the hack is part 6? Oh it hadn't been posted. 😅. Thanks for sharing.

[TheJustinBarker]

Really good series! Thanks for making these videos!

[cameronthomas]

Hands down one of the top 3 financial channels I have ever come across. Amazing.

[ivanbarbosa]

No wonder he is so successful.Congrats on compiling this

[ElliotBrownJingles]

Another brilliant video! Thank you for this insightful series. Say, at 9:31 do you mean "preserve"?

[lordabhijith]

I used that capital formula to estimate the value of an asset. I was precisely wrong about it 😂

[KAS-kldn]

What is the Oil company asset that SI is into.