In our early years we put most of our retained earnings and insurance float into investments in marketable securities. Because of this emphasis, and because the securities we purchased generally did well, our growth…
Charlie and I measure Berkshire’s progress and evaluate its intrinsic value in a number of ways. No single criterion is effective in doing these jobs, and even an avalanche of statistics will not capture some factors…
In our early years we put most of our retained earnings and insurance float into investments in marketable securities. Because of this emphasis, and because the securities we purchased generally did well, our growth…
Charlie and I measure Berkshire’s progress and evaluate its intrinsic value in a number of ways. No single criterion is effective in doing these jobs, and even an avalanche of statistics will not capture some factors…
21:00 Figures · Investing · Modern investor letters
Charlie Munger:The Latticework of Mental Models
Charlie Munger《A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business》· Opening section, “What is elementary, worldly wisdom?” · Cognition · Learning · Decision
What is elementary, worldly wisdom? Well, the first rule is that you can't really know anything if you just remember isolated facts and try and bang 'em back. If the facts don't hang together on a latticework of theory, you don't have them in a usable form.
Isolated facts become usable only when arranged on a latticework of theory.
Context
Charlie Munger (1924–2023) was vice chairman of Berkshire Hathaway and Warren Buffett's longtime partner. A former lawyer, he pushed Berkshire away from bargain “cigar butts” toward high-quality businesses bought at fair prices. In his 1994 USC talk he argued that isolated facts are useless unless they are arranged on a latticework of models drawn from many disciplines.
Today's question
Which latticework does your most recent fact hang on—and if it hangs on none, do you really understand it?