Charlie Munger: Mental Models For The Rest Of Your Life (Part 7)

The final episode in the series on billionaire investor Charlie Munger and his mental models recaps the Two-Track Analysis, which involves analyzing situations from a rational perspective and understanding the subconscious influences of human irrationality. The Psychology of Human Misjudgement, a list of 25 human tendencies and biases, is discussed, along with the Lollapalooza Effect, which occurs when multiple forces act in the same direction. The importance of using mental models in a checklist-style when making rational decisions is emphasized. The lesson ends with a story about the difference between knowing and walking the path and a reminder to practice mental models regularly to avoid chauffeur knowledge.