• Munger: clearly a unicorn for his investment wisdom and thinking strategies. But what has made his ideas take hold and spread (besides the $)? His storytelling.
• Advantages can be crafted out of the small, detailed aspects that no one wants to do. Find the equivalent of golf's short game, or tennis's put away volley.
• Just as multiple factors shape almost every system, multiple models from a variety of disciplines are needed in order to understand that system
• Consider first what you should not do, so that then you can be informed on what you should do
• You can outthink people way smarter than you because you've trained yourself to be more objective and more multidisciplinary (deal with the facts from a broad view)
• For all Munger's breadth, the process ultimately ends in simplicity: a reduction to the most essential that informs a 'feel' for the decision when married with past experience
• A key trait: selectivity. Evaluation of nearly all with quick filters in place to narrow the scope, but only selection of the most essential
• Munger's insight: some businesses thrive by out-competing (a la Selfish Gene), while others thrive by out-cooperating (a la Darwin's Blind Spot).
• Key Insights from Munger's model list:
  • Mimicking the herd invites merely average performance (regression to the mean)
  • More important than the will to win is the will to prepare.
  • Acknowledging what you don't know is the dawning of wisdom.’
  • Think forwards and backwards. Invert. Always.
  • Good ideas are rare - when the odds are greatly in your favor, bet (allocate) heavily.
  • Be Alert for the arrival of luck.
  • Opportunity meeting the prepared mind - that's the game.
  • Don't overlook the obvious by drowning in minutiae.
• Johnny Carson's Three Prescriptions for Misery:
  1. Addiction
  2. Resentment
  3. Envy
• Master the art of unreliability and you will always play the role of the hare, but instead of being outrun by one fine turtle, you will be outrun by hordes and hordes of mediocre turtles.
• Inversion: Johnny Carson, Jacobi, Einstein, Munger
  • All proponents of creating X by creating non-X
  • A storytelling structure that creates surprise naturally
• Knowledge (and wisdom) are about connections - You can't really know anything if you just remember isolated facts and try to bang them back (I like thinking of this concept as Intellectual Hyperlinks)
• The point of models keeps coming up - they must be internalized into your worldview as opposed to checklist
• Just because you can express the depreciation rate for an airplane engine in neat numbers doesn't make it anything that you really know.
• A single concept can carry multiple applications → Leverage in Action
• Powerful physics/engineering models: backup systems / fallbacks, breakpoints, critical mass
• A bi-modal approach to understanding: what are the rational incentives, and what are the subconscious thought patterns that are adding a new layer?
• Jack Welch at GE: "We are either going to be number 1 or number 2 in every field or we are out."
  • Pay attention to what he did constantly: reduce, reduce, reduce (Good Strategy, Bad Strategy)