Farnam Street
Mastering the best of what other people have already figured out
You can train your brain to think like CEOs, professional poker players, investors, and others who make tricky decisions in an uncertain world by weighing probabilities. All decisions involve …
How is your journey towards understanding Farnam Street’s latticework of mental models going? Is it proving useful? Changing your view of the world? If the answer is that it’s going well that’s good. …
“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” — Abraham Lincoln *** Your ability to think clearly determines the decisions you make and the …
Decision-making algorithms are undoubtedly controversial. If a decision is being made that will have a major influence on your life, most people would prefer a human make it. But what if algorithms …
The best colloquial definition of risk may be the following: “Risk means more things can happen than will happen.” We found it through the inimitable Howard Marks, but it’s a quote …
Imagine a sprinter running an Olympic race. He’s competing in the 1600 meter run. The first two laps he runs at a steady but hard pace, trying to keep himself consistently near the head, or at least …
Swedish investor Peter Bevelin wrote two excellent books, Seeking Wisdom: From Darwin to Munger and All I Want to Know Is Where I’m Going to Die. Both are full of multidisciplinary wisdom with …
“The fact is, if you don’t find it reasonable that prices should reflect relative scarcity, then fundamentally you don’t accept the market economy, because this is about as close to …
There are four principles that Gregory Mankiw outlines in his multi-disciplinary economics textbook Principles of Economics. I got the idea for reading an Economics textbook from Charlie Munger, the …
You would be hard pressed to come across a reading list on behavioral economics that doesn’t mention Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein. …
Analogies are a means of drawing a parallel between two different things which we often use to convey complex ideas and to communicate effectively. We often use analogies to aid our reasoning. In this …
The following is an edited excerpt from The Great Mental Models Volume 1: General Thinking Tools The map of reality is not reality. Even the best maps are imperfect. That’s because maps are reductions …
I never went to Engineering school. My undergrad is Computer Science. Despite that I’ve always wanted to learn more about Engineering. John Kuprenas and Matthew Frederick have put together a …
Our desire to feel good about ourselves permeates everything we do. Wanting to maintain a positive self-image often leads us to adopt a biased image of the world. If we want to learn to align …
We’re busier than ever. We’re often on autopilot. We “go through the motions” without really paying attention to the decisions we’re making or the implications. This is …
An excerpt from The Aspirational Investor: Taming the Markets to Achieve Your Life’s Goals that I think you’d enjoy. Most of us have a healthy understanding of risk in the short term. When …