Charlie Munger: Mental Models for the Rest of Your Life (PART 3)

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
00:56 Independent Thinking
04:11 Simplicity
07:09 Technology as a Problem
09:10 The World’s Most Intelligent Question
11:01 Circle of Competence

- 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

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.

[shadowrazor]

Really Enjoying this series, hope to see the next one soon! Keep doing what you're doing mate!

[Carlos-hbdj]

I really want to thank for all the time you have invested to produce such a wonderful videos, this is pure gold.

[Value_Pilgrim]

Absolutely brilliant Initiative!
It will probably add 20 IQ points to a lot of people across the globe.

[brucerobinson]

Fantastic videos. Clear, simple and just the right length. Really some of the best I have seen. And this Munger Mental Model series is pure gold.

[algreen]

Thank you for part 3, looking forward to the next part. Great series!

[ronit.pereira]

If you can't stomach 50% declines in your investment, you will get the mediocre results you deserve.
-Charlie Munger

[josemanuelcanonoguera]

These series of videos of Charlie Munger is absolutely brilliant! Short and wise. Here simplicity is the key. Continue the videos, please. Salut!

[eRockBrowser]

My favorite series out of all your videos.... so far

[AbhishekVermaBharat]

You produce GREAT videos which are helpful for people like me who don't like reading but love all this knowledge. Thanks man, really appreciate all you do.

[jasondupreez]

Please keep this type of videos up
2 legends!

[wcemkfd]

Can't wait for the next one !!! Take your time, but don't lower the quality...

[BoykieMackay]

Really enjoying the series. Looking forward to the next one.

[esmailmaleki]

Hi, looking forward to part 4. Cant wait

[hakangun]

please consider making videos about biases series on all domains

[Datapoint]

On the first point:
If there is a person talking about a stock being a good investment think of these 3 alternatives.
1 - The person is already invested in the stock, thus having an incentive to have others invest to. Therefore you can't trust this person to be fully objective. Don't listen to him.

2 - The person says the investment is a good one, yet he haven't invested himself. Why would someone not invest in something he thinks is a sure profit? Obiously the person is not sure enough about his own analysis. Don't listen to him.

3 - The person is a full time analyst with a fixed income. The analysis of this specific stock was an assignment he got. The analyst has a fixed income, which means he is not incentivised to actually do very deep digging. He will look on the numbers and do a very flat analysis of the situation. He has nothing to gain from putting too much effort into the assignment. Don't listen to him.

Bottom line is - Never listen to anybody endorsing an investment. Do your own research.

[careti]

Thank you so much for the awesome and informative videos mate. A grateful fan from Perth Australia. 🙏

[prgv]

Man, I wish I could give a double like on these videos. One just does not do it justice.

[anders_mark]

Hello mate! "Richer wiser happier" would be the perfect book for you to review in my opinion. (Thank for these Munger videos - SO inspiring! ❤️)

[razvandumitru]

Great idea to create this series of videos! 👏congratulations!

[siddharthabajpai]

I was eagerly waiting for this episode.
These mental models are instruments for becoming creative thinker and thereby help us succeed.
Thank you!!