The Directed Life

Notes from Farnam Street’s Great Mental Models Volume 1

Date read: 1/16/2023

Person with the fewest blind spots wins. Understand how the world works to continually uncover reality and then adjust behavior accordingly. (17)

Being able to accurately describe the full scope of a situation is the first step to understanding it. (19)

Understanding must constantly be tested against reality and updated accordingly. (22)

Flaws / biases that can get in the way: (23-24)

• Perspective
• Ego
• Distance

Framework: (26)

This understanding [multidisciplinary approach] allows us to develop causal relationships, which allows us to match patterns, which allow us to draw analogies.

Key to success: (37)

What successful people do is file away a massive, but finite, amount of fundamental, established, essentially unchanging knowledge that can be used in evaluating the infinite number of unique scenarios which show up in the real world.

The Map is not the Territory

The map is useful for navigation but will never completely resemble the territory. If it did, it would be useless as a map. A lot of specific details get lost in the process of abstraction. The abstraction is helpful only if we remember it does not constitute reality. When reality, the territory, changes, the map must change as well.

That’s how good maps are built: feedback loops created by explorers. (50)

Circle of Competence

We tend to think we know more than we do. Developing a Circle of Competence is having a better understanding of your blind spots and what you don’t know compared to the amount that you do know.

Key practices for development: (66)

There are three key practices needed in order to build and maintain a circle of competence: curiosity and a desire to learn, monitoring, and feedback.

Journaling for reflection: (67)

Keeping a journal of your own performance is the easiest and most private way to give self-feedback … Monitoring your own performance allows you to see patterns that you simply couldn’t see before.

First Principles Thinking

Think Socratic questioning method: What are the elements here that are non-reducible? What are the underlying assumptions that beget the other assumptions? With First Principles Thinking complex problems can be reasoned through with much more simplicity.

The skeleton of Socratic questioning: (82-83)

• Clarifying beliefs – Why do I think this?
• Challenging assumptions – What if this were the opposite?
• Evidence – What are the sources?
• Alternative viewpoints – What could others think?
• Consequences / Implications – What if I’m wrong?
• Questioning original question – Why did I think that?

The real power of first principles thinking is moving away from random change and into choices that have a real possibility of success. (86-88)

Thought Experiment

Using imagination and hypothetical situations to study the nature of principles and ideas.

By exploring the realistic relationships between events you can better understand the most likely effects of any one decision … a thought experiment allows us to verify if our natural intuition is correct by running experiments in our deliberate, conscious minds that make a point clear. (102)

Second-Order Thinking

Thinking about the consequences of consequences of consequences. What happens next, or could happen next, after a decision is made? Considering the effects of effects.

Two areas for using Second-Order Thinking to great benefit: (115)

• Prioritizing long-term benefits over short-term benefits
• Constructing compelling / effective arguments

By delaying gratification now, you will save time in the future. You won’t have to clean up the mess you made on account of not thinking through the effects of your short-term desires. (119)

Thinking: (121)

Thinking in terms of the system in which you are operating will allow you to see that your consequences have consequences. Thinking through a problem as far as you can with the information you have allows us to consider time, scale, thresholds, and more. And weighing different paths is what thinking is all about.

Probabilistic Thinking

Estimating the likelihood of an event with math / logic.

3 most important aspects:

• Bayesian thinking Using all relevant prior information for decision making.

For each bit of prior knowledge, you are not putting it in a binary structure, saying it is true or not. You’re assigning it a probability of being true. Therefore, you can’t let your priors get in the way of processing new knowledge.

• Fat-tailed curves Unlike a bell curve, there is no cap on extreme events. The more extreme events that are possible, the more likely it is that one of them will occur. Position yourself to survive, even benefit, by planning for an unpredictable world.
• Asymmetries Meta-probabilities: what is the probability that your estimation is even any good? Many times we are over optimistic and don’t account for asymmetry.

Antifragility: somethings are harmed by volatility, some are neutral, and others benefit from volatility. Create scenarios where you benefit from randomness / uncertainty because the world is volatile by nature. (133)

Inversion

Think through problems backwards as well as forwards. Upend the problem to gain new perspectives or starting points.

Avoiding stupidity is easier than seeking brilliance. Combining the ability to think forward and backward allows you to see reality from multiple angles. (145)

Instead of thinking through the achievement of a positive outcome, we could ask ourselves how we might achieve a terrible outcome, and let that guide our decision-making. (150)

Process: (151-152)

• Identify problem
• Define objective
• Identify forces that support change
• Identify forces that impede change
• Strategize solution

Occam’s Razor

Base decisions on the simplest explanations possible because they’re more likely to be correct than a more complex explanation with more variables. Identify and commit to the simplest possible explanation.

Simpler explanations are more robust in the face of uncertainty. (163)

Hallmark of genius: focusing on simplicity when others are focused on complexity. (169)

Hanlon’s Razor

Don’t attribute to malice what could be attributed to stupidity. Everyone is at the center of their own universe. To place yourself in the center of everyone else’s universe would be illogical and egomaniacal.

Fallacy of Conjunction: (174)

We’re deeply affected by vivid, available evidence, to such a degree that we’re willing to make judgements that violate simple logic. We over-conclude based on the available information.

Falsifiability

You can’t prove something to be true until you can prove how it would be false.

Necessity and Sufficiency

The set of conditions necessary to become successful is part of the set that is sufficient to become successful. But the sufficient set itself is far larger than the necessary set. (105)

Causation vs. Correlation

When correlation is imperfect, between 0-1, we often attribute things as causal even though the events might have happened anyways. The way around this is introduction of a control group.