Charlie Munger: Mental Models For The Rest Of Your Life (Part 4)

This lesson focuses on two mental models of billionaire investor Charlie Munger. First is the idea of using filters to narrow down the list of investment opportunities to something more manageable. Munger and Warren Buffett typically use accounting figures and their circle of competence as filters. Second is the fat-pitch strategy, which involves waiting for the perfect investment opportunity and only making a move when the odds are in your favour. Munger believes in understanding the normal distribution or bell curve, but emphasizes that one need not be able to do the math to be a successful investor.