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Mungers Psychology Mindmapped | Seeking Wisdom

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Mungers Psychology Mindmapped


Jana Vembunarayanan / 3 days ago

If you want to know about the properties of elements then you should read the periodic
table. If you want to know about the solvency of a company then you should look at its
balance sheet. What if we want to learn about our own irrationality? Without any doubt I
would read Mungers psychology of human misjudgment. I came across this gem three
years back. Every time I read this, I learn something new about my irrationality. Guy
Spier is a Zurich based investor and author of a book entitled The Education of a Value
Investor. In a recent interview he told about the value he got out of Mungers
psychology of human misjudgment.
For 18 months, Mr. Spier listened to nothing in his car but a lecture on
human misjudgment by Charles Munger, Mr. Buffetts vice chairman at
Berkshire Hathaway. Of the two dozen mental mistakes cited by Mr. Munger,
I realized I was guilty of all of them, No wonder he has sought, as he says in
his book, to banish the false assumption that I am truly capable of rational
thought. Once he accepted just how flawed my brain really is, he writes, I could
design an array of practical work
arounds based on my awareness of the minefield
within my mind. To escape what he calls the New York vortex of bad influences
such as envy, greed and hyperactive trading, Mr. Spier moved his fund to Zurich
in 2008.
Its very important to use Mungers teachings on a daily basis. Knowledge without
application is useless; use-it-or-lose-it. To use it on a daily basis we need to make it
second nature. There are 24 standard causes of human misjudgment. How do we
remember all of them? Is there a better way? Few days back I read about a technique
called as mind mapping. Using this technique we can organize information visually so
that we can recall them easily when needed.

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Mungers Psychology Mindmapped | Seeking Wisdom

A mind map is a diagram used to visually organize information. A mind map


is often created around a single concept, drawn as an image in the center of a
blank landscape page, to which associated representations of ideas such as
images, words and parts of words are added. Major ideas are connected directly to
the central concept, and other ideas branch out from those. Mind maps can be
drawn by hand, either as rough notes during a lecture, meeting or planning
session, for example, or as higher quality pictures when more time is available.
Wikipedia

For the last few days I have been mind mapping Mungers psychology of human
misjudgment. In this post I am sharing them with you. Few things to note before you
look at the mind maps (1) In order to understand the mind maps you should have read
Mungers psychology of human misjudgment several times (2) Click on the mind
map (3) Enlarge the mind map to view it clearly (4) Read them in the clockwise direction
(5) Repeat several times.

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Incentive Caused Bias

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Consistency and Commitment

Pavlovian Association

Reciprocation

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Social Proof

Efficient Market Theory

Contrast Effects

Authority

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Deprival Super-reaction Syndrome

Envy and Jealousy

Mis-gambling Compulsion

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Liking

Non-Mathematical Nature of Human Brain

Why?

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Other Biases

Lollapalooza Effects

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November 3, 2014 in Psychology. Tags: Charlie Munger, Psychology

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15 thoughts on Mungers Psychology Mindmapped

Andrs

November 4, 2014 at 2:08 am

Thanks for the great work


I feel a bit sorry for the poor Stanley Milgram. Youve got his name
wrong both times (Miligram, Milgrim)
You should probably reference your post on memory palaces to go with
this. There is a relation to mind maps. They both rely on our ability to
work with space in our mind.
Reply

Jana Vembunarayanan
November 4, 2014 at 1:22 pm

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Thanks Andrs.You are absolutely correct and mind maps


are related to memory palace.
http://www.valueinvestingworld.com/2014/11/links_4.html
Regards,
Jana
Reply

Prashanth Jnanendra

November 4, 2014 at 6:06 am

Amazing, Jana!
Reply

Jana Vembunarayanan
November 4, 2014 at 1:22 pm

Thanks Prashanth.
Regards,
Jana
Reply

krishkeya

November 4, 2014 at 10:40 am

Awesome post Jana compiling all biases in visual map


Reply

Jana Vembunarayanan
November 4, 2014 at 1:22 pm
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Thanks Krish.
Regards,
Jana
Reply

barathmukhi

November 4, 2014 at 11:35 am

Hi Jana,
Have you read that Mind Maps book? Is it good?
Regards,
Barath.
Reply

Jana Vembunarayanan
November 4, 2014 at 1:20 pm

Barath,
Yes I did and its a decent book to get you started with mind
maps.
Regards,
Jana
Reply

chakshura

November 4, 2014 at 5:49 pm

I have been toiling with this idea of creating a conceptual latticework


model that I dont have to remember / memorize or is not a checklist.
The challenge is to connect all the above models in a cohesive manner
so that connecting them becomes easier and effortless. I am trying to
pivot the concepts based on what we do on a daily basis that can form
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a MECE framework (mutually exclusive and conclusively exhaustive)


on which I can hang all the models I learn and use them on a daily
basis. I came up with a small list a) Decision Making b) Learning c)
Socializing d) Reminiscing / dreaming e) Problem solving and f)
Planning. Would welcome your thoughts and inputs?
Reply

Jana Vembunarayanan
November 5, 2014 at 2:48 pm

Thanks for your comments. The hardest part is to use it on a


daily basis which I am in the process of learning. Spaced
repetition to these models is one way to make it a second
nature. Also teaching is a great way to retain this forever.
One person who both of this is Sanjay Bakshi
[http://www.sanjaybakshi.net/bfbv].
Regards,
Jana
Reply

zayanabdulshukoor

November 4, 2014 at 8:12 pm

Wow! .. Thanks a lot for putting this up.


Reply

Akshay

November 5, 2014 at 5:22 am

Absolutely fantastic! Your blog is a treasure trove of such rich


information. Compile a book I promise to buy 10 copies
Thank you.
Reply
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Jana Vembunarayanan
November 5, 2014 at 2:48 pm

Akshay,
Thanks for your generous comments.
Regards,
Jana
Reply

mayurdabbu

November 5, 2014 at 7:14 pm

Super Likes!!! Which Mind Map Software are you using???


Reply

Jana Vembunarayanan
November 5, 2014 at 10:01 pm

Mayur,
Thanks. I am using http://www.xmind.net
Regards,
Jana
Reply

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