Charlie Munger’s Most Important Mental Model

In my opinion, One of Charlie Munger‘s most powerful mental models is the idea of inversion. The investor borrowed this principle from German mathematician Carl Gustav Jacob Jacobi.

Put simply, Jacobi believed that one of the easiest ways to find an answer to any question is to flip it on his head. Instead of asking why something is happening, we should ask why something isn't happening.

“[Jacobi] knew that it is in the nature of things that many hard problems are best solved when they are addressed backward,” Munger has said.

Q1 2022 hedge fund letters, conferences and more

Inverting The Problem To Find The Answer

There are plenty of examples where...