How to Make Better Investment Decisions? | Charlie Munger & the Mental Model Factory

Video Description

► Need Term or Health Insurance? Schedule a free 30-minute consultation : https://ditto.sh/0bxlo5 ► 26,000+ readers have joined my Investing Newsletter Subscribe Now : http://shankarnath.com Use the code SKN20 for 20% Discount on Quantitative Investing Strategy course fees 👉 https://fisdom.academy/courses/Quantitative-Investing-Strategy--64e39d49e4b01624e0a9286b?utm_source=youtube&utm_medium=video&utm_campaign=ShankarNath In this video, we explore how mental models are the frameworks that shape our actions and guide us in decision-making. To help us with this, we'll explore the mental models used by the legendary Charlie Munger and pick some of the best ones that have helped Mr. Munger with better decision making. We'll look at: 1. Swiss Army knife approach wherein having a diverse toolkit of mental models equips us to navigate life's complexities 2. Inversion i.e. thinking in reverse and by understanding what not to do, you can arrive at superior solutions 3. Compounding is where we start small and grow our investments steadily leading to exponential returns over time 4. Occam's Razor focusses on simplicity; Munger and Buffett emphasize investing in simple businesses that require fewer assumptions, ultimately yielding better outcomes 5. Specialization and like organisms in nature, businesses that specialize in specific niches thrive. Focusing on what you excel at can set you apart in both nature and business. 6. Betting Odds and Value Investing: Analyzing betting odds parallels investing - seeking undervalued assets with favorable odds is the key to successful investing. 7. Margin of Safety: A safety buffer in investments guards against errors in estimation 8. Incentives: Understanding and aligning with the right incentives is crucial. Incentives drive behaviour and profoundly influence outcomes in business and life. 👉 Download the Fisdom app: https://fisdom.onelink.me/VCH6/ShankarnathYT 👉 Video Chapters: 00:00 What is a Mental Model? 01:23 1. Swiss Army Knife 02:52 2. Invert, Always Invert 04:51 3. Compounding 06:24 4. Occum's Razor 09:14 5. Survival of the Fittest 11:14 6. Parimutuel Betting 13:00 7. Margin of Safety 14:22 8. Superpowerful Incentives 15:14 Shankar's Viewpoint 🙌 Join my community on: ‣ Youtube: https://www.youtube.com/@shankarnath ‣ Instagram: https://www.instagram.com/shankarnathofficial/ ‣ LinkedIn: https://www.linkedin.com/in/shankarnath/ ‣ Twitter: https://twitter.com/shankarnath 👉 Additional Reading material: ‣ Toolkit by Safal Niveshak: https://www.safalniveshak.com/wp-content/uploads/2019/08/Build-Your-Thinking-Toolkit.pdf ‣ Playlist on Mental Models by Swedish Investor: https://www.youtube.com/watch?v=ywyQ_eNNCJU&list=PLI84Sf0aDgazRojpYTLTXFE6Iaf5bkYr_ #mentalmodels #charliemunger #survivalofthefittest #inversion #swissarmyknife #compounding Disclaimer: I am not a SEBI registered investment advisor or research analyst. I am not registered with PFRDA or IRDA either. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented. Some of the links I have posted in the video, the description, the comments and other related resources might be affiliate links