Have you ever encountered such a dilemma: faced with a complex problem, you don’t know where to start, or your thinking is always affected by your own biases and habits, and you are unable to find the best solution? If you have such troubles, then you may need to learn the universal wisdom of Charlie Munger.
Charlie Munger is a famous American investor, businessman and thinker. He is a partner of Warren Buffett and the vice chairman of Berkshire Hathaway. He is world-famous for his erudition and unique insights, and is known as the ’living encyclopedia’. His universal wisdom refers to his thinking method that uses basic concepts and principles from different disciplines to analyze and solve problems. It is also called a ‘diversified thinking model’ or an ‘interdisciplinary thinking model.’
Munger believes that human knowledge is composed of different disciplines, each discipline has its own categories and methods, but these disciplines are not isolated, but are interconnected and influence each other. If we limit ourselves to the perspective of one discipline, we will ignore the contributions of other disciplines, causing our thinking to become narrow and one-sided. Therefore, we need to draw the most important and useful knowledge from multiple disciplines to form a complex framework of thinking models, so that we can understand and solve problems more comprehensively and profoundly.
So, what are Munger’s commonly used thinking patterns? Below we will introduce some of the thinking patterns he often mentioned and how to use them to improve your cognitive abilities and creativity.
Reverse thinking
Reverse thinking, also known as reverse thinking, refers to a way of thinking about common things or opinions that seem to have become a foregone conclusion. Dare to ’think the opposite way’, let your thinking develop in the direction of the opposite, conduct in-depth exploration from the opposite side of the problem, establish new ideas, and create new images.
The benefit of reverse thinking is that it can help us break the inertia of thinking, jump out of the inherent thinking framework, discover new perspectives and possibilities, and find better solutions. Reverse thinking can also help us avoid some common thinking misunderstandings, such as availability bias, loss aversion, sunk costs, etc., making our thinking more rational and objective.
There are many examples of reverse thinking, such as:
- A prisoner received a message from his wife, saying that no one had cleared the land at home and that he was not in good health. The prisoner replied that he must not dig up the ground because there was a gun buried in the ground. Half a month later, my wife received a message saying that the police had searched the ground three or four times but could not find the gun. Where are you hiding? The prisoner replied that he had no guns in the first place, but now he could farm. This story uses reverse thinking and uses false information to achieve the real goal.
- One person made a deposit at night. The ATM machine happened to be malfunctioning and 10,000 yuan was swallowed. He immediately contacted the bank and was told to wait until dawn. An old man next to me replied: You have slept with someone else’s wife for eight years, and you still have the nerve to commit suicide here? The young man thought about it and realized that it was right. He smiled and walked down. This story uses reverse thinking, using a larger loss to alleviate a small loss, making people feel that they are not too miserable.
- A buddy’s phone was stolen near the train station. He immediately asked his friend to send a message to his phone: ‘Brother, the train is leaving soon. I can’t wait for you, so I got on the train first! I owe you 20,000 yuan, I put it in locker No. A19 at the train station’s check-in office, and the password is 1685.’ Half an hour later, the person who stole the mobile phone was captured alive in front of locker No. A19 in the train station’s check-in office. This story uses reverse thinking and uses a bait to attract the thief, thereby recovering the mobile phone.
First Principles
First principles are a philosophical term that refers to one of the most basic propositions present in every system, which cannot be violated or deleted. First-principles thinking is a way of thinking that ’traces back to the source’. Everything must find the fundamental problem, which can also be called essential thinking.
The benefit of first-principles thinking is that it can help us get rid of existing representations and common sense, understand and create things from the most basic level, and thus be more innovative and breakthrough. First principles thinking can also help us avoid some common thinking misunderstandings, such as herd mentality, authority effect, inertial thinking, etc., making our thinking more independent and confident.
There are many examples of first principles thinking, such as:
- Elon Musk, the founder of Tesla, is a representative figure of first-principles thinking. He has demonstrated his first-principles thinking in the fields of creating electric cars, space exploration, and high-speed trains. He once said: ‘I think first principles thinking is a very important way of thinking. It starts from basic truths, rather than starting from analogies or existing things. You have to ask yourself, why is this thing It’s like, what’s the essence of it, what are the fundamentals of it, and then you can create it from scratch.”
- Jack Ma, the founder of Alibaba, is also a representative figure of first-principles thinking. He has demonstrated his first-principles thinking in the fields of creating e-commerce, Internet finance, and cloud computing. He once said: ‘I think first principles thinking is a very important way of thinking. It starts from the needs of users, rather than from competitors or the current situation of the market. You have to ask yourself, what do users need most? , what users care about most, what users suffer the most, and then you can create it from scratch.”
Antifragility
Antifragility is a concept proposed by Nassim Taleb, which refers to the ability to benefit from uncertainty and chaos, as opposed to fragility, which refers to the ability to benefit from uncertainty. and abilities compromised by chaos. The benefit of antifragility is that it can help us turn crises into opportunities, pressure into motivation, and challenges into growth, so that we can better adapt to and optimize the environment. Antifragility can also help us avoid some common thinking misunderstandings, such as overconfidence, stubbornness, inertial thinking, etc., making our thinking more open and flexible.
There are many examples of antifragility, such as:
- The human body’s immune system is an anti-fragile system. It can enhance its own resistance through exposure to viruses and bacteria, thereby better protecting the body’s health. If we disinfect and isolate excessively, it will weaken the function of the immune system and make the body more fragile and susceptible.
- Internet entrepreneurs are a group of anti-fragile people who can learn and improve by constantly trying and failing to find market needs and opportunities faster. If they are afraid of failure and criticism and just follow the old models and rules, they will lose their innovation and competitive advantages, making the company more fragile and backward.
Systems thinking
Systems thinking is a way of thinking that takes the system as the object, the whole as the perspective, relationships as the focus, and dynamics as the characteristics. Systems thinking believes that any system is composed of multiple interacting elements, and the relationship between these elements determines the behavior and performance of the system. The purpose of systems thinking is to find out the rules and patterns of the system by analyzing the structure and function of the system, so as to better understand and improve the system.
The benefit of systems thinking is that it can help us see the whole picture and essence of things instead of being limited to appearances and details, so that we can solve problems and make decisions more effectively. Systematic thinking can also help us avoid some common thinking misunderstandings, such as simplification, attribution errors, short-sighted behavior, etc., and make our thinking more profound and long-term.
There are many examples of systems thinking, such as:
- A famous example of systems thinking is the story of ‘Wolf and Goat’, which describes a farmer who wants to transport a wolf, a sheep and a bale of grass from one bank of the river to the other, but his boat It can carry one thing, and it cannot let wolves eat sheep or sheep eat grass. The solution to this problem is to use systems thinking to regard the farmer, wolf, sheep and grass as a system, analyze the relationship and influence between them, and find a feasible sequence and steps.
- A modern example of systems thinking is the problem of ‘climate change’, which describes the impact of human activities on the earth’s climate and ecosystems, and the feedback of these impacts on human society and the economy. The solution to this problem is to use systems thinking to view humans, climate and ecosystems as a system, analyze the relationships and cycles between them, and find a sustainable solution and strategy.
Conclusion
To summarize the key points of Munger’s universal wisdom:
- Munger’s universal wisdom is a thinking method that uses basic concepts and principles from different disciplines to analyze and solve problems. It is also called a ‘diversified thinking mode’ or an ‘interdisciplinary thinking mode.’
- Munger’s commonly used thinking modes include reverse thinking, first principles, antifragility, systems thinking, etc. They can help us break the inertia of thinking, discover new perspectives and possibilities, and find better solutions.
- Munger’s universal wisdom applies not only to the fields of investment and business, but also to the fields of life and learning. It can help us improve our cognitive abilities and creativity, and make our thinking more comprehensive and profound.
The above is an introduction to Munger’s commonly used thinking modes. Of course, these thinking modes are not completely independent and mutually exclusive, but complement and combine with each other. Munger once said: ‘You must know enough important things to have a reasonable thinking model. You must combine these thinking models to have a compound thinking model. You must combine these compound thinking models Only by applying it to actual problems can we have an effective thinking model. ‘Therefore, we need to continue to learn and practice in order to master and apply Munger’s universal wisdom, thereby improving our thinking level and problem-solving abilities.
I hope this article can inspire and help you. If you want to know more about Munger’s universal wisdom, you can read his book ‘Poor Charlie’s Almanac’ or watch his speech ‘Human Misjudgment’ Psychology’, I believe you will gain more gains and insights. Thank you for reading and have a nice day!
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