Mental Models
Poor Charlie's Almanack
A grab bag of speeches that adds up to a way of thinking, not a way of picking stocks.
Poor Charlie's Almanack collects Charlie Munger's speeches, and its real subject is how to think clearly across every field at once, not how to pick a stock.
Munger's argument is that no single discipline hands you everything you need. You borrow the load-bearing ideas from physics, biology, psychology, economics, and history, and hang your decisions on that latticework instead of one favorite model. Part speech transcript, part biography, part cartoon, oddly assembled.
The psychology of misjudgment
The most useful section is the one almost nobody quotes: Munger's list of the standard causes of human misjudgment, reciprocation bias, incentive-caused bias, denial, envy, a dozen more. He is not writing about markets there. He is writing about why smart people make dumb decisions, in a boardroom or a marriage or a trade.
Avoiding stupidity over chasing brilliance
Munger's whole case for consistency over cleverness comes down to trying to be reliably not stupid, instead of chasing occasional brilliance. Inversion, thinking about what to avoid instead of what to chase, gets its own page here. Munger's career is the proof of concept.
Most investing mistakes are not failures of intelligence. They are failures of humility about where your circle of competence actually ends, about knowing what you do not know.
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
“Knowing what you don't know is more useful than being brilliant.”