A Latticework
of Mental Models
Designed by Md Nazmus Sakib, CFA · Made with Claude
“Instead of memorizing isolated facts, you must build a web of big ideas across multiple disciplines — like psychology, physics, and economics — to array your experiences and make better decisions.
Tap any discipline to jump to its models
Discipline 01
Mathematics & Statistics
The grammar of uncertainty. Most "intuition" about randomness is wrong — and these models say why.
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10 tabs
Learn Basics of Probability
From single events to Bayes' theorem, distributions, expected value, the Law of Large Numbers, and the Bessembinder long tail.
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Sampling
Central Limit Theorem
Why averages form bell curves out of messy data, and why the theorem quietly breaks when dependence and fat tails take over.
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Regression to the Mean
Why extreme things drift back. The cover curse, the mutual fund quartile illusion, and how to defend yourself from "the intervention worked."
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Statistical reasoning
Base Rates
The single most violated rule in human judgment. Why "but this case is different" almost always means "I forgot the base rate."
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Belief updating
Bayesian Updating
How a strong prior becomes a weak one, slowly. Why Twitter-grade thinkers skip the prior — and why you shouldn't.
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Distributions
Power Laws
When "average" tells you nothing. The 80/20 isn't a rule — it's a consequence of fat tails ruling outcomes.
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Inference
Signal & Noise
Why small samples lie. Why they don't just lack precision — they systematically overstate effects.
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Decision math
Expected Value vs Median
The arithmetic that separates venture capital from a savings account. Why "average" is a trap in asymmetric outcomes.
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Discipline 02
Psychology & Cognition
Munger's "psychology of human misjudgment." The biases that look like reasoning from the inside.
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Munger's #1 bias
Incentive-Caused Bias
"Never, ever think about something else when you should be thinking about the power of incentives." The most under-respected force in human affairs.
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Cognitive bias
Confirmation Bias
Why we hunt for evidence that confirms what we already believe — and treat contradictory evidence as an attack.
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Behavioral econ
Loss Aversion
Losses hurt about twice as much as equivalent gains feel good. The single most expensive bug in retail investing.
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Social influence
Social Proof
When uncertain, we copy. Bubbles, manias, and "everyone's buying it" are this bias at scale.
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Narrative trap
Narrative Fallacy
We prefer a wrong story to no story. Why explanations after the fact are mostly fiction.
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Escalation
Sunk Cost Fallacy
Why money, time, and effort already spent keep steering choices that should depend only on what happens next.
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Planned
Commitment
Consistency & Commitment
Once you've said it, you'll defend it. Sunk costs masquerading as identity.
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Anchoring
Anchoring & Adjustment
The first number you see shapes every estimate afterward — even when you know it's irrelevant.
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Planned
Accounting illusion
Mental Accounting
A dollar saved on coffee is not a dollar saved on rent. Why money is fungible in theory and not in practice.
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Discipline 03
Philosophy & Logic
The tools for thinking about how you think. Inversion, falsifiability, first principles.
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9 tabs · Munger's favorite tool
Inversion
"Always invert. Always invert." Don't ask how to win — ask how to lose, and avoid it. Jacobi to Munger to Buffett to FMEA to Taleb.
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Decision theory
Second-Order Thinking
"And then what?" The cost of stopping at first-order consequences. Howard Marks' favorite move.
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Epistemology
Falsifiability
Popper's test for ideas: can you state what evidence would change your mind? If not, you're not thinking.
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Parsimony
Occam's Razor
The simpler explanation, when both fit. Why "the boring answer" is usually right.
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Modeling
Map vs Territory
Korzybski: "the map is not the territory." Every DCF, every regression, every credit rating — a map. Useful, partial, wrong in specific ways.
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Foundations
First Principles
Strip away the conclusions you inherited. Rebuild from what you can actually verify.
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Fairness
Veil of Ignorance
Design the rules as if you could be born anywhere inside them. Impartiality begins where self-interest becomes uncertain.
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Reform
Chesterton's Fence
Before removing a rule, institution, or habit, understand what problem it was built to solve.
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Attribution
Hanlon's Razor
Start with error, confusion, and constraint before leaping to malice. Better priors make calmer judgments.
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Negative knowledge
Via Negativa
Taleb's path: progress by subtraction. What you remove matters more than what you add.
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Discipline 04
Physics & Engineering
Hagstrom's equilibrium models. The mechanics that govern systems, including financial ones.
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Systems thinking
Equilibrium
Markets, ecosystems, political systems — they pull toward states of balance. The forces, not the snapshots, are the story.
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Dynamics
Feedback Loops
Reinforcing loops accelerate. Balancing loops resist. Confusing them is the first mistake of every strategist.
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Tipping points
Critical Mass
Phase transitions in physics, viral content, political revolutions. The same math, three different costumes.
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Mechanics
Leverage
A small input producing a large output. The principle's the same whether the lever is metal, financial, or political.
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Constraints
Bottleneck
The whole system moves at the pace of its slowest stage. Improving everything else is usually theatre.
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Resilience
Redundancy & Margin of Safety
Bridges have it. Spacecraft have it. Most portfolios don't. The cheapest insurance is the kind you never need.
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Information theory
Signal & Noise
Most "news" is noise dressed as signal. Why the filter matters more than the firehose.
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Thermodynamics
Entropy
Everything decays. Maintenance is the rule, not the exception. The same applies to portfolios, marriages, and software.
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Discipline 05
Biology & Evolution
How complex systems adapt or die. Companies, currencies, ideas — they're all subject to selection.
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Foundational
Natural Selection
Variation, selection, retention. The engine running through every market and every organism.
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Adaptation
Niches
Why generalists struggle. Specialization isn't preference — it's how complex systems pack more of themselves into the same space.
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Competitive dynamics
Red Queen Effect
"You have to run as fast as you can just to stay in place." Why competitive advantages erode by default.
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Stress response
Antifragility
Taleb's third category: not just survives shocks — grows stronger from them. The opposite of fragile isn't robust.
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Endings
Extinction
Most species, most companies, most strategies. Survival is the exception, not the rule. The base rate is grim.
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Systems thinking
Ecosystems
Predator, prey, parasite, symbiont. Every market is one. Knowing your role is half the work.
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Discipline 06
Economics & Markets
The price system as a vast information processor. Why incentives, scarcity, and tradeoffs explain more than ideology.
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First principle
Opportunity Cost
Every yes is a no to everything else. The hidden cost of every dollar, every hour, every decision.
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Pricing
Supply & Demand
The most powerful equilibrium in economics. Why prices contain more information than any single mind can hold.
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Specialization
Comparative Advantage
Ricardo's surprising insight: even if you're worse at everything, trade still pays. Why "make in-house" is usually wrong.
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Shared resources
Tragedy of the Commons
When private incentives harvest a common resource to death. Escaping the trap requires rules, not wishes.
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Network dynamics
Network Effects
Value that grows with users. Why "winner takes most" is a property of the math, not the management.
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Boom-bust loops
Reflexivity
In markets, belief changes reality and reality changes belief. Prices can move the fundamentals they seem to measure.
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Innovation
Creative Destruction
Schumpeter: progress requires demolishing what works. Every dominant company is the next obsolete one.
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Risk-return
Compounding
Linear brains living in an exponential world. The single most important word in finance — and the least understood.
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Market pendulum
Cycles
Booms plant the seeds of busts and busts plant the seeds of recoveries. Position for the swing instead of extrapolating the moment.
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Planned
Market structure
Moats
Buffett's metaphor for sustainable competitive advantage. The five sources, and why most "moats" aren't.
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Discipline 07
History & Sociology
The patterns that recur across centuries. Why "this time it's different" is the most expensive sentence in finance.
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9 tabs · the cemetery you can't see
Survivorship Bias
Abraham Wald's bullet holes. Why "successful entrepreneur" advice is mostly wrong — you only hear from the small fraction who didn't fail silently.
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History dependence
Path Dependence
QWERTY. VHS. Why where you ended up depends on where you started — and why "best" rarely wins.
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Group behavior
Tribalism & In-Group Bias
We evolved to side with the group. Why political beliefs cluster, why investors herd, why dissent feels like betrayal.
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Hierarchy
Status Games
Most "rational" behavior is status-seeking in disguise. Conspicuous consumption, credentials, even philanthropy.
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Mass psychology
Manias & Panics
Tulips. South Sea. Dotcoms. Crypto. The same story, the same century-old script — and every generation is sure it's different.
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Civilizational cycles
Rise & Decline
Why empires, companies, and currencies follow similar arcs. The mechanics of regression across centuries.
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Discipline 08
Decision-Making & Strategy
The applied layer. When the other disciplines turn into action under uncertainty.
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Cushioning
Margin of Safety
Graham's gift. The buffer between your estimate and the edge of disaster. Without it, you're not investing — you're forecasting.
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Asymmetric payoffs
Optionality
Why you pay for the right to wait. Real options outside the math: in careers, startups, relationships, capital allocation.
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Bet sizing
Kelly Criterion
The math of how much to bet when you have an edge. Why "all in" and "scared money" are both wrong.
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Imagination
Pre-Mortem
Imagine the project failed. Now ask why. The single most effective debiasing tool in the strategy literature.
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Strategic interaction
Game Theory
When the best move depends on what other minds are thinking about your move. Change the game when the equilibrium is a trap.
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Scenario thinking
Decision Trees
Possibilities × probabilities × outcomes. The basic spine of every serious decision under uncertainty.
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Convexity
Asymmetric Bets
Risk a little to make a lot. Lose small often, win big rarely. The math behind venture capital, startups, and long volatility.
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Stocks vs flows
Stocks vs Flows
Your bank balance vs your savings rate. A country's debt vs its deficit. Confusing them is the #1 analyst error.
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Process vs outcome
Process vs Outcome
Good decisions can have bad outcomes; bad ones can have good outcomes. Judging by results alone is the gambler's mistake.
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