“Charlie has the best 30-second mind in the world."

- Warren Buffett

The key to Charlie's thinking is his wide variety of Mental Models.

1. Parimutuel Betting
Our life is a constant weighing up of opportunity and risk.
Munger decided early on that he only wanted to take unfair bets
Bets that have limited downside but unlimited downside.

2. Compounding
Compounding is usually associated with financial investments.
But, like most mental models, it’s a universal concept for life.
It’s not just money that compounds.
Knowledge, experience, and relationships are all subjects of compounding.

3. Opportunity Costs
For every door that closes, another one opens.
This also works the other way around.
Whenever you open a door, all the other doors close.
Decision-making is a tradeoff and you must always consider the alternatives.

4. The Iron Prescription
Munger faced many tragedies in his life.
He lost a son to blood-cancer, almost became completely blind, and experienced war as a young man.
When he thought he would become completely blind, he didn’t despair, instead, he learned how to read braille.

- Charlie Munger