DeepSummary
Kyle Grieve and Clay Finck continue their discussion on Robert Hagstrom's book "Investing: The Last Liberal Art", exploring various mental models from different disciplines and how they can be applied to investing. They discuss the importance of using the right description or comparison when analyzing a business, using examples like Amazon and Tesla. The power of narratives in investing is examined, as well as techniques for optimizing reading comprehension and learning.
The episode delves into mathematical concepts like Bayes' theorem and how it can aid decision-making, as well as the distinction between System 1 (intuitive) and System 2 (analytical) thinking. The authors also touch on the idea of being a "fox" versus a "hedgehog" in one's approach to problem-solving and adapting to new information.
Towards the end, Kyle shares methods for making the practice of thinking in mental models a habit, such as journaling and active thinking exercises. He also highlights some mental models he has recently learned from guests on his podcast, including the "kill criteria" from Annie Duke and the "dichotomy of control" from the Stoics.
Key Episodes Takeaways
- The importance of using the right description or comparison when analyzing a business, as exemplified by the Amazon and Tesla examples.
- The power of narratives in investing, and the need to back narratives with data and statistics.
- The distinction between System 1 (intuitive) and System 2 (analytical) thinking, and the importance of relying on System 2 thinking in investing.
- The concept of being a "fox" versus a "hedgehog" in one's approach to problem-solving and adapting to new information.
- The use of mathematical concepts like Bayes' theorem to aid in decision-making and updating probabilities.
- Techniques for optimizing reading comprehension and learning, such as asking the right questions and reviewing key points.
- The importance of continuous learning and acquiring new knowledge and mental models to improve one's investing process.
- Methods for making the practice of thinking in mental models a habit, such as journaling and active thinking exercises.
Top Episodes Quotes
- “Failure to explain is failure to describe during a chat on market efficiency.“ by Benoit Mandelbrot
- “So stocks can move on a strong narrative alone. But narratives are most powerful when there's statistics that support them.“ by Kyle Grieve
- “If ideology can screw up the head of Chomsky, imagine what it can do for people like you and me.“ by Charlie Munger
- “Hedgehogs start with one big idea and flow through, no matter the logical implications of doing so. In foxes, they stitch together a collection of big ideas, they see and understand the analogies and then create an aggregate hypothesis from there.“ by Robert Hagstrom
- “I think if you do this for a long time, you'll really start thinking about things like your life, family, work, stocks in a different way. And you're going to actively start trying to connect your life to the mental models that you are using and that you're obviously starting to understand better and better.“ by Kyle Grieve
Entities
Company
Person
Book
Service
Product
Episode Information
We Study Billionaires - The Investor's Podcast Network
The Investor's Podcast Network
6/30/24