Poor Charlie's Almanack

Boy, boy, boy never did I expect to find this book in Bedok library. I have searched high and low for it in Kinokuniya, in MPH and even in school library. I had very high expectations of it and I am glad to say it didn't disappoint one bit. Charlie Munger has rightfully confirmed my underlying suspicions that successful investing is simply a by product of a carefully organized and focused approach to life. The process is by no means simple or straightforward and it requires a multi-disciplinary approach. The world we live in is a constant interaction between scientific and mathematical laws of the Earth and perceptional beliefs of people. It requires a certain set of values and beliefs in order to see the corroborations between systems. Definitely a page flipper...

"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 things.

Just as multiple factors shape almost every system, multiple models from a variety of disciplines, applied with fluency are needed to understand that system. What you need is a latticework of mental models in your head. And with that system, things gradually get to fit together in a way that enhances cognition.

The most important thing to keep in mind is the idea that especially big forces often come out of these hundred models. When several models combine, you get lollapalooza effects. This is when two, three or four forces are all operating in the same direction. And frequently, you don't get a simple addition. It's often like a critical mass in physics where you get a nuclear explosion if you get to a certian point of mass- and don't get anything much worth seeing if you don't reach the mass. Sometimes the forces just add like ordinary quantities and sometimes they combine on a break-point or critical mass basis.

More commonly, the forces coming out of these one hundred models are conflicting to some extent. And you get huge, miserable tradeoffs. But if you can't think of tradeoffs and recognize tradeoffs in what you're dealing with, you're a horse's patoot. You are clearly a danger to the res of the people when serious thinking is being done. You have to recognize how these things combine. 'Life is just one damn relatedness after another.' So you must have the models and you must see the relatedness and the effects of the relatedness.

I'm afraid that's the way it is. If there are 20 factors and they interact some, you'll just have to learn to handle it- because that's the way the world is. But you won't find it hard if you go at it Darwin-like step by step with curious persistence. You'll be amazed at how good you can get."