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June 18 - October 15, 2019
Once you are familiar with them, you can use them to quickly create a mental picture of a situation, which becomes a model that you can later apply in similar situations.
Every discipline, like physics, has its own set of mental models that people in the field learn through coursework, mentorship, and firsthand experience.
There is a smaller set of mental models, however, that are useful in general day-to-day decision making, problem solving, and truth seeking.
These often originate in specific disciplines (physics, economics, etc.), but have metaphorical value well beyo...
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“A Lesson on Elementary, Worldly Wisdom as It Relates to Investment Management and Business”:
viable.
Think back to when you first learned multiplication. As you may recall, multiplication is just repeated addition. In fact, all mathematical operations based on arithmetic can be reduced to just addition: subtraction is just adding a negative number, division is just repeated subtraction, and so on.
However, using addition for complex operations can be really slow, which is why you use multiplication in the first place.
For example, suppose you have a calculator or spreadsheet in front ...
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innate.
Consider that there are probably many disciplines where you have only rudimentary knowledge.
Perhaps physics is one of
them? Most of the concepts from physics are esoteric, but some—those physics mental models that we present in this book—do have the potential to be r...
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And the models have to come from multiple disciplines—because all the wisdom of the world is not to be found in one little academic department. . . . You’ve got to have models across a fair array of disciplines. You may say, “My God, this is already getting way too tough.” But, fortunately, it isn’t that tough—because 80 or 90 important models will carry about 90 percent of the freight in making you a worldly-wise person. And, of those, only a mere handful really carry very heavy freight.
This book is that toolbox: it systematically lists, classifies, and explains all the important mental models across the major disciplines.
We believe that when taken together, these super models will be useful to you across your entire life: to make sense of situations, help generate ideas, and aid in decision making.
When you deeply understand a mental model, it should come to you naturally, like multiplication does. It should just pop into your head.
This is the book we wish someone had gifted us many years ago. No matter where you are in life, this book is designed to help jump start your super thinking journey. This reminds us of another adage,
“The best time to plant a tree was twenty years ago.
The second best time...
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The concept of inverse thinking can help you with the challenge of making good decisions. The inverse of being right more is being wrong less.
of concepts that help you more effectively navigate o...
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unforced error occurs when a player makes a mistake not because the other player hit an awesome shot, but rather because of their own poor judgment or execution.
An unforced error is a tennis concept that occurs when a player makes a mistake not because the other player, but rabecause of their own poor judgment or execution.
Unforced error
is a concept from tennis, but it can be applied as a
decision making (not considering all your options).
An unforced error isn’t the
only way to make a wrong decision, though. The best decision based on the information available at the time can easily turn out to be the wrong decision in the long run. That’s just the nature of dealing with uncertainty.
No matter how hard you try, because of uncertainty, you may still be wrong when you make decisions, mo...
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What you can do, however, is strive to make fewer unforced errors over time by using sound judgment and techniques to make t...
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antifragile, a concep...
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shocks, it similarly pays off to make your thinking antifragile in the face of new decisions. If your thinking is antifragile, then it gets better over time as you learn from your mistakes and interact with your surroundings.
It’s like working out at the gym—you are shocking your muscles and bones so they grow stronger over time. We’d like to improve your thought process by helping you incorporate mental models into your day-to-day thinking, increasingly matching the right models to a given situation.
You just need to understand their broader meaning and apply them when appropriate. If you apply these mental models consistently and correctly, your decisions will become wrong much less, or inverted, right much more. That’s super thinking.
The central mental model to help you become a chef with your thinking is arguing from first principles. It’s the practical starting point to being wrong less,
and it means thinking from the bottom up, using basic building blocks of what you think is true to build sound (and sometimes new) conclusions. First principles are the group of self-evident assumptions that make up the foundation on which your conclusions rest—the ingredients in a recipe or the mathematical axioms that underpin a formula.
If you can argue from first principles, then you can more easily approach unfamiliar situations, or approach familiar situations in innovative ways.
Tesla founder Elon Musk illustrates how this process
works in practice in an interview on the Foundation podcast:
First principles is kind of a physics way of looking at the world. . . . You kind of boil things down to the most fundamental truths and say, “What are we sure is true?” . . . and then reason up from there. . . . Somebody could say . . . “Battery packs are really expensive and that’s just the way they will always be. . . . Historically, it has cost $600 per kilowatt-hour, and so it’s not going to be much better than that in the future.” . . . With first principles, you say, “What are the material constituents of the batteries? What is the stock market value of the material constituents?” . . .
  
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can. Break that down on a material basis and say, “If we bought that on the London Metal Exchange, what would each of those things cost?” . . . It’s like $80 per kilowatt-hour. So clearly you just need to think of clever ways to take those materials and combine them into the shape of a battery cell and you can have batteries that are much, much cheaper than anyone realizes.
When arguing from first principles, you are deliberately starting from scratch. You are explicitly avoiding the potential trap of conventional wisdom, which could turn out to be wrong. Even if you end up in agreement with conv...
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will gain a much deeper understanding of the ...
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There is risk that one or more of your assumptions are untrue, and so the conclusions you reach could also be false.
etc. The market is large enough
etc. Once you get specific enough with your assumptions, then you can devise a plan to test (de-risk) them.
The most important assumptions to de-risk first are the ones that are necessary conditions for success and that you




















