"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent."
- Charlie Munger
Welcome to Mental Models For Wall Street.
On this course we are going to investigate a number of mental models and how they can help you win in finance and business - particularly in the realm of trading and investing.
You are going to discover crucial models and frameworks like:
- The Availability Bias
- Confirmation Bias
- Misconceptions of Chance
- The Black Swan
- The Law of Small Numbers
- Cognitive Dissonance
- Margin of Safety
- Aversion to Losses
- Feedback Loops
- And lots more...
Financial traders, investors and entrepreneurs will benefit most from this course as we delve into topics that will teach you about yourself, improve your judgement skills and insulate you from costly mistakes.
For example, by learning about psychological models like confirmation bias and hindsight bias you will be better equipped to eliminate their negative effects and make better decisions in the stock market.
By learning about cognitive dissonance, anchoring and fear of missing out you'll finally understand why you sometimes make strange, illogical decisions. And how this can help you in the trading world.
Concepts such as circle of competence, margin of safety and Mr. Market will further help you to make better timed investment moves while protecting your downside risk.
Also, you will learn to calculate better probabilities using Bayes Theorem, improve your systematic processes using feedback loops and minimise overconfidence by understanding concepts such as regression to the mean.
You will learn all this and more – by utilising the power of mental models detailed on this course!
But, what is a mental model?
Well, a mental model in it’s simplest form is an idea that helps us understand how the world works.
Having a large array of these models at our fingertips gives us great tools we can use to solve problems and navigate life.
Why do we need mental models?
The world is complicated so you can’t rely on just remembering facts, you need to have multiple models from all different disciplines in your head.
But even though there is so much to learn, there are shortcuts we can take.
By studying the big ideas from the big disciplines. Disciplines like psychology, economics, maths, physics and engineering we can go a long way in a short amount of time.
And that’s the whole concept behind Mental Models. They're shortcuts you can take to speed up your learning and become knowledgeable about the world.
The focus of this course
On this course, we will look at the most important mental models, the ones most crucial for success. And we will relate them to the business of financial trading and investing.
These models will help you to make better investment decisions, solve complex problems and avoid costly errors.
Let’s begin!
