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Mental Models
galumay:
Marcus Porcius Cato wrote: "Wise men profit more from fools than fools from wise men; for the wise men shun the mistakes ofthe fools, but fools do not imitate the successes of the wise."
galumay:
Buffett: Some businesses are a lot easier to understand than others. And Charlie and I don't like difficult problems. Ifsomething is difficult to figure... We'd rather multiply by 3 than by n.
Munger: That's such an obvious point. Yet so many people think that if they just hire somebody with the appropriate labels, they can do something very difficult. That is one of the most dangerous ideas a human being can have. All kinds of things can create problems by causing complexity. The other day I was dealing with a problem - it was a new building. And I said, "This problem has three things I've learned to fear - an architect, a contractor and a hill." Ifyou go through life like that, I think you'll at least makefewer mistakes than people who think they can do anything, no matter how complex, by just hiring somebody with a credible label. You don't have to hire out your thinking ifyou keep it simple...
Buffett: Ifyou get into some complicated business, you can get a report that's 1,000 pages thick and you can have Ph.D.'s working on it. But it doesn't mean anything. What you'll have is a report. But you won't have any better understanding of that business and what it's going to look like in 10 or 15 years. The big thing to do is to avoid being wrong.
galumay:
�Since Auschwitz we know what man is capable of.
And since Hiroshima we know what is at stake.
�
Excerpt From: Viktor E. Frankl, Harold S. Kushner & William J. Winslade. �Man's Search for Meaning.� iBooks. https://itunes.apple.com/us/book/mans-search-for-meaning/id476023633?mt=11
�It is we ourselves who must answer the questions that life asks of us, and to these questions we can respond only by being responsible for our existence.�
Excerpt From: Viktor E. Frankl, Harold S. Kushner & William J. Winslade. �Man's Search for Meaning.� iBooks. https://itunes.apple.com/us/book/mans-search-for-meaning/id476023633?mt=11
galumay:
"Passion is actually just taking an interest in something, and then getting good at it"
(Kel Newport, Be So Good they Cant Ignore You.)
Resonates completely with me and coffee!
galumay:
This is something I have read before and not bothered to really understand, its a powerful tool for selecting employees or partners!
WARREN BUFFETT�S AND CHARLIE MUNGER�S TOP 7 TIPS FOR THE CLASS OF 2016
John | June 14, 2016 | All Posts, Charlie Munger, Most Popular, Superinvestors, Warren Buffett | 0 Comments
warren buffett and charlie munger tips
1. WORK FOR THE PERSON OR COMPANY YOU ADMIRE THE MOST
Warren Buffett says that he often gets asked the question: �Who should I go to work for when I graduate college?�
�I�ve got a very simple answer� the real thing to do is to get going for some institution or individual that you admire. I mean it�s crazy to take in-between jobs just because they look good on your resume, or because you get a little higher starting pay.
I was up at Harvard a while back, and a very nice young guy, he picked me up at the airport, a Harvard Business School attendee. And he said, �Look. I went to undergrad here, and then I worked for X and Y and Z, and now I�ve come here.� And he said, �I thought it would really round out my resume perfectly if I went to work now for a big management consulting firm.� And I said, �Well, is that what you want to do?� And he said, �No,� but he said, �That�s the perfect resume.� And I said, �Well when are you going to start doing what you like?� And he said, �Well I�ll get to that someday.� And I said, �Well you know, your plan sounds to me a lot like saving up sex for your old age. It just doesn�t make a lot of sense.�
I told that same group, I said, �Go to work for whomever you admire the most.� I said, �You can�t get a bad result. You�ll jump out of bed in the morning and you�ll be having fun.� The Dean called me up a couple weeks later. He said, �What did you tell those kids? They�re all becoming self-employed.� So, you�ve got to temper that advice a little bit.�
Why would you want to be around the people you admire most? Here�s a lesson Warren Buffett learned spending part of the first summer after graduating college fulfilling his obligation to the National Guard:
�It�s a very democratic organization. I mean, what you do outside doesn�t mean much. To fit in, all you had to do was be willing to read comic books. About an hour after I got there, I was reading comic books. Everybody else was reading comic books, why shouldn�t I? My vocabulary shrank to about four words, and you can guess what they were.
I learned that it pays to hang around with people better than you are, because you will float upward a little bit. And if you hang around with people that behave worse than you, pretty soon you�ll start sliding down the pole. It just works that way.�
2. COPY THE HABITS OF THE MOST SUCCESSFUL PEOPLE YOU KNOW
Here�s another thought exercise that Warren Buffett had a class of MBA students play: Imagine that you can pick any one of your classmates and you could get 10% of their earnings for the rest of their lives. Who would you pick?
�What goes through your mind in determining which one of those you would pick? You can�t pick the one with the richest father, that doesn�t count. I mean, you�ve got to do this on merit. But, you probably wouldn�t pick the person that gets the highest grades in the class.
I mean, there�s nothing wrong with getting the highest grades in the class, but that isn�t going to be the quality that sets apart a big winner from the rest of the pack� You�ve all got the ability, you wouldn�t be here otherwise. And you�ve all got the energy. I mean, the initiative is here, the intelligence is here throughout the class. But some of you are going to be bigger winners than others.
It gets down to a bunch of qualities that, interestingly enough, are self-made. I mean it�s not how tall you are. It�s not whether you can kick a football 60 yards. It�s not whether you can run the 100 yard dash in 10 seconds. It�s not whether you�re the best looking person in the room� It�s integrity, it�s honesty, it�s generosity, it�s being willing to do more than your share, it�s just all those qualities that are self-selected.�
Now, imagine that you can sell short one of your classmates � you have to pay 10% of what they do. Who would you pick?
�Again, it isn�t the person with the lowest grades or anything of the sort. It�s the person who just doesn�t shape up in the character department.
We look for three things when we hire people. We look for intelligence, we look for initiative or energy, and we look for integrity. And if they don�t have the latter, the first two will kill you, because if you�re going to get someone without integrity, you want them lazy and dumb. I mean, you don�t want a spark of energy out of them. So it�s that third quality. But everything about that quality is your choice.�
Now look at those two people. Wright down the qualities of the person that you�d like to buy 10% of and ask yourself, �Is there anything on that list I couldn�t do?� Buffett says there won�t be. Now look at the person you sell short and look at those qualities that you don�t like. Do you see any of those in yourself that you can�t get rid of? Buffett concludes:
�Ben Franklin did this and my old boss Ben Graham did this at early ages in their young teens, Ben Graham looked around and he said, �Who do I admire?� And he wanted to be admired himself and he said, �Why do I admire these other people?� And he said, �If I admire them for these reasons, maybe other people would admire me if I behave in a similar manner.� And he decided what kind of a person he wanted to be.
And if you follow that, at the end you�ll be the person you want to buy 10% of. I mean that�s the goal in the end, and it�s something that�s achievable by everybody.�
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