Recent Articles

The brain’s tendency to resist change also leads people to prefer keeping certain things as they are: previous conclusions, loyalty, identity, social roles, and so on. If the tendency to avoid doubt, combined with the tendency to reject a decision once it has been made, is allowed to operate, it will cause modern people’s cognition to develop numerous errors. And the actual situation confirms this. We have all dealt with many obstinate people who cling stubbornly to the erroneous ideas they formed in childhood, refusing to let go even when they enter the grave. ...

Humans are easily fooled, whether by meticulously designed human tricks, accidental environmental factors, or highly effective techniques mastered through diligent practice; people can be easily tricked. One reason for this outcome is the micro-effect in human perception. If a stimulus is maintained below a certain level, humans will not notice its presence. Because of this reason, a magician can make the Statue of Liberty disappear after a flourish of movement in the dark. The audience does not know that they are sitting on a slowly rotating platform. This platform rotates very slowly, so no one can notice it. When the curtain on the platform is pulled back where the Statue of Liberty appeared, it looks like it has vanished. ...

If you are a Navy captain who has worked for 24 hours straight and needs to go to sleep, so you entrust the ship to a highly capable first mate in harsh conditions, and he runs the ship aground—which is clearly not your fault—they won’t send you to a military tribunal, but your naval career is over. ...

If you can remain calm when the people around you all become frantic and accuse you, If you can believe in yourself, even when everyone doubts you—let them doubt, If you endure waiting without growing weary from the wait, or suffer deception without retaliating with lies, or face hatred without striking back with hatred; if you can maintain your composure despite disappointment, and also remain genuine (without excessive flattery)… ...

Life is not just about shrewdly accumulating wealth. Most of the success in life and business comes from knowing what you should avoid: dying too early, bad marriages, and so on. Avoid contracting AIDS, getting hit by a car at an intersection, or doing drugs. Cultivate good psychological habits. Avoid wicked people, especially those sexually attractive opposite-sex individuals. If you are unpopular among those around you because of your uniqueness… then let them be. ...

The importance of Multidisciplinary Mental Models You must understand and master the key theories from important disciplines, and you must frequently apply them. You need to utilize all these mental models, not just rely on a few. Most people focus on only one discipline—for example, economics—and try to solve all problems with a single method. As the saying goes: “To the person holding a hammer, the world looks like a nail.” This is an inefficient way of thinking. ...

Patient Investing If you buy something because its value is undervalued, you must consider selling it when its price rises to your expected level. That is difficult. But if you can buy a few great companies, then you can sit back and relax. That is a great thing. We tend to put large amounts of money into places where we don’t need to make further decisions. Diversification The idea that investment should be as diversified as possible is a delusional concept. We do not believe that highly diversified investments produce good results. We believe that the diversification level of almost all good investments is relatively low. If you remove our 15 best decisions, our performance will be very mediocre. What you need is not a large amount of action, but extreme patience. You must stick to the principles, and when the opportunity comes, you must seize it forcefully. Over the years, Berkshire has made money by betting on things it is confident about.

What you need is not a lot of action, but a lot of patience What you need is not a lot of action, but a lot of patience. You must stick to your principles, and when the opportunity comes, you must seize it with force. There are many situations that are much worse than being swamped in cash and doing nothing. I remember the time when I lacked cash—I certainly don’t want to go back to that. —Charlie Munger ...

I. Mathematics and Logic Compound Interest Principle Probability Theory (Fermat-Pascal System) Permutations and Combinations Decision Tree Analysis Bayes’ Theorem Expected Value Calculation Random Walk Theory Game Theory Linear Regression Nonlinear Systems Critical Mass (Phase Transition Point) Power Law Distribution (Long Tail Theory) Pareto Principle (80/20 Rule) Butterfly Effect Fractal Geometry II. Microeconomics and Business Opportunity Cost Economies of Scale Moat (Competitive Advantage) Sunk Cost Fallacy Substitution Effect Diminishing Marginal Utility Supply and Demand Relationship Price Elasticity Agency Cost Information Asymmetry Network Effect Flywheel Effect Bilateral Market Anchoring Effect Cost Shifting (or Cost Pass-through) III. Psychology and Behavioral Science Confirmation Bias Loss Aversion Availability Bias Overconfidence Effect Conformity (or Herd Mentality) Social Identity Self-Serving Bias Hindsight Bias Mental Accounting Selective Attention Emotional Hijacking Contrast Effect Authority Bias Fear-Based Decision Making Pleasure-Pain Principle Cognitive Dissonance Attribution Bias Illusion of Control Adaptive Preference Decision Fatigue IV. Physics and Engineering Redundancy/Backup System Fracture Point Theory Law of Conservation of Energy Second Law of Thermodynamics (Entropy Increase) Tension and Stress Equilibrium Feedback Loop (Positive/Negative) System Stability Modular Design Fault Tree Analysis Safety Margin (Engineering) V. Biology and Evolution Survival of the Fittest Gene Competition Niche Theory (Ecological Niche Theory) Co-evolution Mutation and Selection Population Dynamics Metabolic Efficiency Immune System Principle Viral Transmission Principle of Competitive Exclusion VI. Statistics and Data Analysis Central Limit Theorem (CLT) Law of Large Numbers Regression Mean Sample Bias Correlation $\neq$ Causation Data Visualization Trap Spurious Correlation Significance Testing Data Overfitting Confounding Variable VII. Philosophy and Cognitive Science First Principles Inversion Thinking (Inversion) Occam’s Razor Black Swan Theory Falsifiability (Popper) Knowledge Transfer Metacognition Cognitive Load Theory Dual System Thinking (Fast/Slow Thinking) Humility Hypothesis VIII. Sociology and History Cultural Inertia Institutional Path Dependence Revolutionary Cycle Theory Technology Diffusion Curve Historical Recurrence (or Historical Repetition) Group Polarization Paradox of Power Concentration Interest Group Dynamics (or Game of Interest Groups) Laws of Civilization Rise and Fall Unintended Consequences Usage Guide: Dynamic Update: In practical application, the model needs to be expanded based on new fields (e.g., AI, Quantum Computing). Cross-Validation: For the same problem, multiple disciplines must be called upon (e.g., investment decisions require combining Compound Interest, Psychological Biases, Moats). Weight Adjustment: The importance of the model varies depending on the scenario (e.g., medical decisions emphasize probability, political negotiations emphasize Game Theory). These models do not exist in isolation; Munger emphasizes solving complex problems through the “Lollapalooza Effect” (the exponential effect generated by the superposition of multiple models). For example: ...

Investing is like going out to bet on horses. We are looking for a horse with a 50% probability of winning, and odds of 3-to-1. What you are looking for is a bet with mispriced odds. This is the essence of investing. You must possess enough knowledge to know whether the odds of the bet are mispriced. This is value investing.

Initially, we were Graham believers, and we achieved some success through this method. But over time, our investment eye became sharper. Breaking Graham’s Limitations We found that some stocks, even though their price is two or three times their book value, are still very cheap. This is because these companies possess unique market positions and hold the potential for sustained growth. Perhaps a specific company manager is exceptional, or the entire management system is outstanding. By breaking through Graham’s limitations and employing some quantitative methods—which might make Graham uneasy—to find undervalued stocks, we began focusing on higher-quality enterprises. ...

Patience: The Art of Patient Waiting Look at those hedge funds—do you think they know how to wait? They fundamentally don’t know how to wait! In my personal portfolio, I once held only $10 million to $12 million in government or municipal bonds for several consecutive years, and then I didn’t touch them, just quietly waited, waited… “As Jesse Livermore said: ‘The secret to making big money is not in buying and selling… but in waiting.’” ...

Lump-Sum Investment or Regular Buying? When you receive an inheritance or another large sum of money, have you ever wondered whether to invest it all at once, or spread the money out and invest it gradually? The past 150 years of history tell us that the North American stock market rises roughly two out of every three years. From a statistical perspective, the longer your money stays in the market, the more likely it is to grow. Therefore, the solution to this dilemma is to invest it all at once, while remaining aware that the market could drop at any moment. If you are uneasy about lump-sum investing, you can set up a simple system for incremental investing (for example, investing 25% of the total amount on the first day of every month, continuing this for four months). ...

Compared to ten years ago, today’s entrepreneurial environment is much freer and more convenient. Entrepreneurs no longer need to rely on traditional resources; instead, they can quickly and affordably launch projects using modern tools and the internet! I. Entrepreneurship no longer requires a “grand setup” In the Past: Entrepreneurship required investors, co-founders, an office, and several months of financial support. Now: These are no longer necessities. As long as you have the internet and some basic tools, one person can start. II. Every step of entrepreneurship has a solution ...

Money is what you exchange your life energy for. You sell time to acquire money. Ned selling time for $100 an hour while you sell it for $20 an hour—that doesn’t matter. Ned’s money has nothing to do with you. The only true wealth you possess is your time, every second and minute of your life. You use some of that precious time to exchange for money (cash), but money itself is meaningless; your time is where all meaning and value reside. ...

The stock market is like a very excited dog, tied to one end of a long leash, with the owner holding the leash, allowing the dog to sniff randomly in all directions. Assume that in this example, the dog owner represents the economy, walking in New York City, starting from Columbus Circle, passing through Central Park, and arriving at the Metropolitan Museum of Art. From one second to the next, the dog might turn right or left; its movement cannot be precisely predicted. ...

Merton Malkiel’s adage: “Never buy from someone who is out of breath.” Warren Buffett has said something similar: “Be wary of investment activities that draw applause; true investment genius is usually very boring.” When trillions of dollars are managed by Wall Street figures who charge high management fees, it is usually the managers who gain massive profits, not the clients. Don’t think you know more than the market; no one knows more than the market. Don’t act according to your own views—you might think it’s just your idea, but in reality, millions of people think that way. ...

User Research and Insights By conducting in-depth research on Reddit using multiple AI tools (such as Gemini 2.5, Deepresearch, Grok 3, and Perplexity), with a specific focus on user complaints and comments. Four independent reports will be generated to summarize real user feedback, providing data support for subsequent content creation. Building Content Ecosystem and SEO Optimization Based on the identified user complaints, questions will be refined and converted into content topics. Articles centered on experience sharing and solutions will be written, integrating high-frequency search terms using Search Engine Optimization (SEO) strategies. These will be published on the website blog, ensuring the content has high potential for search ranking. ...

On Saving and Thrifty Lifestyle The Power of High Savings Save and invest an unwavering 50% of your income. The beauty of a high savings rate is twofold: you learn to live on less, even as you have more to invest. When you can live on 4% of your investments per year, you are financially independent. Financial Independence vs. Dependence If your lifestyle matches or exceeds your income, you are a slave. It’s better to adapt yourself and your attitudes to the numbers than to adapt the strategies to your psychological comfort levels. Long-Term Savings Strategy If financial independence is your goal, your savings rate in these years should be high. As you invest that money each month, it serves to smooth out the market’s volatility. Be persistent. Life is uncertain. On the Stock Market and Investing Fundamental Investment Rules Rule #1: Never lose money. Rule #2: Never forget rule #1. The Stock Market as a Wealth-Building Tool The stock market is a powerful wealth-building tool, and you should be investing in it. Embrace indexing. Crashes, pullbacks, and corrections are all absolutely normal. Avoiding Short-Term Speculation Any investing done short-term is, by definition, speculation. Market timing is an unwinnable game over time. To play this market-timing game well even once, you need to be right twice: first, you need to call the high, and then, you need to call the low. Market Dynamics and Long-Term Perspective The market always recovers. Always. Everybody makes money when the market is rising. But what determines whether it will make you wealthy or leave you bleeding on the side of the road is what you do during the times it is collapsing. Common Pitfalls in the Stock Market Most people lose money in the stock market. Here’s why: We think we can time the market. We believe we can pick individual stocks. We believe we can pick winning mutual fund managers. Dollar-Cost Averaging By dollar-cost averaging, you are betting that the market will drop, saving yourself some pain. For any given year, the odds of this happening are only about 23%. But the market is about 77% more likely to rise, in which case you will have spared yourself some gain. With each new invested portion, you’ll be paying more for your shares. Put all your eggs in one basket and forget about it.

Date Calculation Today is April 20th, so 14 days later is the 34th, which is 34 minus 30—May 4th. Since 20 plus 14 equals 34, the date will be April 34th. And April 34th is equivalent to May 4th, that’s all (Figure 2.6). She invented a non-existent date so that her derivation could directly reach the goal. And this did not hinder her from getting the correct result at all! Complex numbers arrive unexpectedly like this. ...