Weekly Summary
A quote, A mental model, A Twitter thread, A sports update, A question to ask
A quote:
"We buy things we don't need with money we don't have to impress people we don't know."~ Dave Ramsey
A mental model:
Lollapalooza effect: By definition, Lollapalooza means an extraordinary event or something out of its kind. But Munger has a different approach.
According to Munger “Lollapalooza is, as personified by Charles Munger, the critical mass obtained via a combination of concentration, curiosity, perseverance, and self-criticism, applied through a prism of multidisciplinary mental models.”
Essentially it means when there is a combination of many powerful biases and mental models these lollapalooza occurrences occur. This mental model helps us understand the big effects of the world better. It has a multidisciplinary view to it instead of pinpointing the cause of the effect to only one thing. For example, during IPL auctions there are a ton of biases such as commitment bias, social bias, loss aversion bias, incentive bias, etc which come into play to cause extraordinary bids for players like Jaydev Unadkat, Pawan Negi, etc.
A Twitter Thread
A thread on one of the best books in investing. It is an amazing summary and is helpful to add to your Notion or any other app you use to store knowledge.
Sports Update
Sadio Mane is injured for the World cup adding to the list of players like Pogba, Werner, Kante, Reece James, etc. It looks like Senegal might not have it easy in the group stages now that their star player is gone. In other news, Chelsea continues their horrible run of form losing to 3 of their last 4 opponents. Manchester United look like they might be out of the Europa League as well after they draw Barcelona in the playoffs. The game to look out for in the Champions League is Bayern vs PSG.
In cricket, India has been knocked out of the T20 world cup after getting battered by England in the semis. India was outclassed although the only good thing about this world cup was Kohli’s performance in it. He proved all his haters wrong and showed the world what he is capable of. Pakistan vs England is an interesting final it can go either way but my gut is saying it will go Pakistan’s way (hopefully I jinxed it).
A question to ask yourself
What is my circle of competence?
Try to be as humble as possible and not let your ego dictate how big it is. As we know the importance of knowing the boundaries. Operating within this circle of competence will help you in life. This exercise should help you in figuring out what your strength is where its boundary lies and what you can do to operate within it. If you already know your circle of competence ask this:
Am I operating within my circle of competence?
That’s it for this week! Enjoy your weekend.