Mental Models

Charlie Munger : If you don’t get elementary probability into your repertoire.. you go through life like a one-legged man in an ass-kicking contest.

Most of us are trained in skills that are limited to a specific area of expertise like Engineering, Accounting, Physics, Medicine etc. However in life and nature stuff interact and coexist. You can be very good in your field, but without understanding

fundamental concepts in multiple fields you will be at a disadvantage.

Charlie Munger, Vice Chairman of Berkshire Hathaway and a friend of Warren Buffet calls this “A lattice work of mental model”.

In his Book Poor Charlie’s Almanack he opines : 

You must know the big ideas in the big disciplines and use them routinely–all of them, not just a few. Most people are trained in one model–economics, for example–and try to solve all problems in one way. You know the old saying: To the man with a hammer, the world looks like a nail. This is a dumb way of handling problems.

I am on a journey to build my mental models and I started blogging the big ideas I learn from multiple disciplines. I am indexing them here for my reference and plan to add more in future, hope you will find it useful. If you have any big ideas or models to share, please let me know on twitter @harirama or on linkedin

Statistics

• Normal Distribution / Gaussian Distribution – It’s use and abuse
• Log Normal Distribution – The world of extremes
• The Bell Curve Fallacy

Mathematics

• Permutations
• Combinations
• Compound Interest

Engineering

• Backup / Failover / Load Balancing
• Break Points

Physics

• Critical Mass

Accounting

• Depreciation
• Good Will
• Owner Earnings

Business

• Blue Ocean
• Long Tail
• Red Queen
• Economics of Scale
• Moat
• Survival the Fattest

Economics

• Demand & Supply
• The Economic Cycle
• Pari-Mutuel System

Psychology

• Man with a Hammer
• Reality Distortion –  Self-Deceit / disproportionate  self-assessment / excuses / irrational reasoning
• Cloning - ( thanks to Mohnish Pabrai ) 
• Deprival super reaction – When there is a perception of scarcity people over react to the situation.

History

Business Law

Politics