Mental Models Tag Archive

What’s your hotdog

(Excerpt from Rework by Jason Fried) The way to find the epicenter is to ask yourself this question: “If I took this away, would what I’m selling still exist?” A hot dog stand isn’t a hot dog stand without the...

Circle of Competence, Strategy, Via Negativa Read More

Mean reversion is the most ironclad rule in financial markets

(Excerpt from What Works In Wall Street by James P. O’Shaungnessy) The most ironclad rule I have been able to find studying masses of data on the stock market, both in the United States and developed foreign markets,...

Investing, Mean Reversion Read More

Wisdom via negativa

To attain knowledge, add things every day. To attain wisdom, remove things every day. Lao Tzu...

Via Negativa Read More

Russians are better programmers because they have less computing time

(Extracted from Flash Boys by Michael Lewis) Russians had a reputation for being the best programmers on Wall Street, and Serge thought he knew why: They had been forced to learn to program computers without the luxury...

Constraints Read More

Say no to money that’s outside of your business focus

(Extracted from Built to Sell by John Warrillow) Stopping yourself from accepting projects outside of your scalable product or service is the toughest part of creating a business that can thrive without you. You will...

Focus, Strategy Read More

Being fallible in investing and not hanging onto a wrong idea

(Extracted from Fooled by Randomness by Nassim Taleb) One of the best traders I have ever encountered in my life, Nigel Babbage, has the remarkable attribute of being completely free of any path dependence in his...

Fallibility, Investing Read More

Why it is so hard to choose

(Excerpt from Barking Up the Wrong Tree by Eric Barker) We love having choices. We hate making choices. Having choices means having possibilities. Making choices means losing possibilities. And having so many choices...

Focus, Via Negativa Read More

Destroy your best-loved ideas constantly

“Any year that you don’t destroy one of your best-loved ideas is probably a wasted year.” Charlie Munger...

Inversion Read More

Some advantages of randomness

(Extracted from Fooled by Randomness by Nassim Taleb) Another way to see the beastly aspect of schedules and rigid projections is to think in limit situations. Would you like to know with great precision the date...

Randomness Read More

Persevere for nonlinear effects

(Extracted from Fooled by Randomness by Nassim Taleb) Our brain is not cut out for nonlinearities. People think that if, say, two variables are causally linked, then a steady input in one variable should always...

Investing, Nonlinearity Read More