git:20260325.00384de to git:20260430.5b2ddcd
254 added, 177 removed. Audit A to A.
---
name: munger-mental-models-worldly-wisdom
- description: "Apply Charlie Munger's latticework of mental models and worldly wisdom to investments, decisions, and bias detection. Trigger on: \"analyze this investment like Munger\", \"what mental models apply here\", \"spot psychological biases\", \"evaluate this business using worldly wisdom\", \"Munger checklist\"."
+ description: Apply Charlie Munger mental models to investments, decisions, and bias diagnosis. Trigger on Munger checklist or spot biases.
license: "Skill distillation for personal/educational use. Do not reproduce source passages verbatim."
---
## Overview
- This skill distills Charlie Munger's core frameworks from *Poor Charlie's Almanack*: the latticework of mental models, the 10-principle investing checklist, and the 25 psychological tendencies of human misjudgment. Use it to evaluate investments, diagnose cognitive biases, or apply multidisciplinary thinking to any complex decision.
+ This skill turns Charlie Munger's *Poor Charlie's Almanack* into an executable decision tool for investment evaluation, business judgment, and psychological misjudgment diagnosis. It helps users combine multidisciplinary mental models, inversion, circle-of-competence discipline, and bias checklists into structured recommendations.
## When to Use This Skill
- - User wants to evaluate a stock, business, or investment using Munger's framework
- - User asks about cognitive biases, psychological tendencies, or irrational behavior
- - User wants to "think like Munger" or "apply worldly wisdom" to a situation
- - User asks how multiple mental models combine (Lollapalooza effect)
- - User wants to check their reasoning against Munger's investing principles
+ - The user asks to analyze an investment, company, business decision, or strategy using Charlie Munger's approach.
+ - The user asks which mental models apply to a situation.
+ - The user wants to diagnose cognitive biases, market manias, frauds, scandals, or irrational behavior.
+ - The user wants a checklist for decision quality, preparation, patience, concentration, or opportunity cost.
+ - The user asks what could go wrong and how to invert a plan before acting.
- ---
+ ## HOW TO USE THIS SKILL
+ 1. Classify the user's request as investment evaluation, bias diagnosis, general decision review, or Munger-style synthesis.
+ 2. Apply only the dimensions required by the query. Do not force every checklist into a narrow question.
+ 3. Start with competence boundaries and inversion whenever the user asks for a recommendation.
+ 4. Use citations for major Munger-derived claims by loading the closest relevant quote file and citing an anchor.
+ 5. If the user needs current market or company facts, state what data is missing or browse current sources if available.
+
+ ## CITATION RULES
+
+ Every substantive claim based on Munger's methodology must include a citation to the original text.
+
+ **Quote files (load the relevant one):**
+
+ - `main-framework-quotes.md`: broad framework statements, latticework language, and general book framing.
+ - `mental-models-quotes.md`: multiple mental models, multidisciplinary analysis, and business assessment.
+ - `worldly-wisdom-quotes.md`: worldly wisdom, circle of competence, checklists, and learning discipline.
+
+ **Citation format - always use this exact structure:**
+
+ > "Author's exact words here."
+ >
+ > - *Poor Charlie's Almanack*, topic anchor: https://github.com/simbajigege/book2skills/blob/main/skills/munger-mental-models-worldly-wisdom/quotes/FILENAME.md#ANCHOR
+
+ **Anchor mapping:**
+
+ - `main-framework-quotes.md`: `#quote-1`, `#quote-2`, `#quote-3`, `#quote-4`, `#quote-5`, `#quote-6`, `#quote-7`, `#quote-8`, `#quote-9`, `#quote-10`, `#quote-11`, `#quote-12`, `#quote-13`, `#quote-14`, `#quote-15`
+ - `mental-models-quotes.md`: `#mental-model-1`, `#mental-model-2`, `#mental-model-3`, `#mental-model-4`, `#mental-model-5`, `#mental-model-6`, `#mental-model-7`
+ - `worldly-wisdom-quotes.md`: `#wisdom-1`, `#wisdom-2`, `#wisdom-3`, `#wisdom-4`, `#wisdom-5`, `#wisdom-6`, `#wisdom-7`, `#wisdom-8`, `#wisdom-9`, `#wisdom-10`
+
+ **Rules:**
+
+ - Include at least one citation in each major response section that relies on Munger's method.
+ - Match the citation to the closest principle: mental models, worldly wisdom, or checklist discipline.
+ - If no exact quote matches a point, cite the closest chapter anchor and label the point as a paraphrase.
+ - Do not reproduce long passages in the answer. Quote briefly, then paraphrase the practical rule.
+
## Core Principle
- **"Acquire worldly wisdom and adjust your behavior accordingly."** — Build a latticework of mental models from multiple disciplines (mathematics, psychology, physics, biology, economics, history) and hang all experience on this structure. No single model suffices — you need many models working together. Invert always: collect instances of failure to find the path to success.
+ Reliable judgment comes from building a latticework of the big ideas across disciplines, then applying them with humility, inversion, and bias control. A single favorite model is dangerous; the agent must combine models, know when a problem is outside its competence, and search first for failure modes.
- ---
+ ## Workflow Inventory
+ | Workflow | User question pattern | Inputs | Steps | Output | Independent trigger? | Distinct references? | Triage score | Should be subskill? | Reason |
+ |---|---|---|---|---|---|---|---:|---|---|
+ | Investment quality review | Analyze this company using Munger | Company facts, business model, valuation, moat evidence | Competence boundary -> inversion -> models -> 10 principles -> bias check | Investment scorecard and verdict | Yes | Partly | 3 | No | Independently triggerable, but uses the same shared dimensions and output grammar as the broader decision workflow. |
+ | Mental-model mapping | What models apply here? | Situation description and decision goal | Identify disciplines -> apply models -> synthesize implications | Cross-disciplinary model table | Yes | Yes | 3 | No | It is a slice of the primary workflow; keeping it as a dimension avoids a separate module with duplicated model lists. |
+ | Bias and misjudgment diagnosis | What biases are active here? | Behavior, incentives, social context, outcome | Scan tendencies -> detect reinforcing combinations -> prescribe antidotes | Bias map and corrective actions | Yes | Partly | 3 | No | Separately triggerable but compact enough to remain a dimension; it shares citation and output conventions. |
+ | Inversion review | What could make this fail? | Plan, assumptions, constraints | Name failure modes -> rank severity/probability -> safeguards | Failure-mode checklist | Yes | No | 2 | No | It is a universal step inside all recommendation workflows. |
+ | Circle of competence triage | Should I even analyze this? | User knowledge, domain complexity, data quality | Test understanding -> mark known/unknown -> decide too-hard or proceed | Competence boundary and data request | Yes | No | 2 | No | It gates the other workflows rather than producing a standalone method. |
+
+ ## Architecture Justification
+
+ Use a single-file skill because Munger's method is a compact decision discipline built from tightly coupled checks. The workflows are independently triggerable, but they use the same repeated reasoning sequence: competence boundary, inversion, multidisciplinary models, psychological bias control, and disciplined output. Splitting them into subskills would duplicate the central model list and make narrow questions heavier rather than clearer.
+
## DIMENSION 1: Latticework of Mental Models
- **The Rule:** You need 80–90 big ideas from the major disciplines held fluently in your mind; applying only one model (the "man-with-a-hammer" tendency) guarantees systematic error.
+ **The Rule:** Do not analyze a complex problem through one favored lens; combine big ideas from several disciplines and look for their interactions.
### Key questions to ask:
- - Which disciplines are relevant to this problem?
- - Am I forcing this into one framework when multiple apply?
- - What does physics/biology/psychology/mathematics say about this situation?
- - What second-order and third-order effects are present?
+ - Which disciplines are relevant: mathematics, psychology, physics, biology, economics, engineering, history, or accounting?
+ - What does each discipline suggest that the others might miss?
+ - Which variables interact or reinforce each other?
+ - What second-order effect follows if the obvious first-order outcome happens?
+ - Is the user using one model because it is useful, or because it is familiar?
+
### Decision criteria / Checklist:
- - [ ] At least 3 different disciplines consulted
- - [ ] Second-order effects considered (not just first-order consequences)
- - [ ] Inversion applied: what would cause failure here?
- - [ ] The "too-hard" basket used honestly — skip if outside circle of competence
- ### Key mental models to apply:
- | Discipline | Key Model |
- |------------|-----------|
- | Mathematics | Compound interest, probability, statistics, decision trees |
- | Physics | Critical mass, breakpoints, thermodynamics (energy efficiency) |
- | Biology | Darwinian survival, evolution, adaptation |
- | Psychology | 25 tendencies (see Dimension 3) |
- | Economics | Opportunity cost, supply/demand, competitive advantage |
- | Engineering | Redundancy, margin of safety, systems thinking |
- | History | Base rates, pattern recognition from prior cases |
+ - Identify at least three relevant disciplines for broad decisions.
+ - Separate first-order, second-order, and feedback-loop effects.
+ - Check base rates before accepting a vivid story.
+ - Use opportunity cost whenever comparing alternatives.
+ - Mark the problem as too hard if the model outputs conflict and key facts are missing.
### Warning signals:
- - Relying on a single metric (P/E alone, one ratio, one model)
- - "This time is different" reasoning
- - Ignoring second-order effects
- - Staying in a failing position because of sunk costs
+ - One-metric reasoning, such as relying only on P/E, growth, market share, or narrative strength.
+ - Claims that ignore incentives, competition, or feedback loops.
+ - Treating a spreadsheet as truth when assumptions drive the result.
+ - Explaining a social system while ignoring psychology.
+
### Agent instruction:
- When user presents a business, investment, or decision problem, first identify which disciplines are most relevant, then apply 3–5 big ideas from those disciplines explicitly. Show the latticework — don't just give a verdict.
- ---
+ When the user presents a business, investment, policy, or life decision, name the 3-5 most relevant models, explain what each model implies, then synthesize where the models agree or conflict. Cite `mental-models-quotes.md` when explaining why multiple models are required.
- ## DIMENSION 2: Munger's 10 Investing Principles Checklist
+ ## DIMENSION 2: Worldly Wisdom and Learning Discipline
- **The Rule:** Superior investment performance comes from preparation, patience, and decisiveness applied together — not from any formula or clever system.
+ **The Rule:** Practical wisdom compounds through broad learning, intellectual humility, and repeated use of checklists.
### Key questions to ask:
- - Is this within my circle of competence?
- - What is the margin of safety?
- - Am I being independent or mimicking the herd?
- - What is the opportunity cost of this allocation?
- - Am I acting out of boredom, or because it's genuinely time to act?
+ - What does the user know firsthand, and what is borrowed confidence?
+ - Which basic disciplines has the user not consulted?
+ - Is the decision being rushed before the hard learning has been done?
+ - What checklist would prevent an obvious mistake?
+ - What must be practiced or refreshed so the user does not lose the skill?
+
### Decision criteria / Checklist:
- 1. **Risk** — Is there adequate margin of safety? Is permanent capital loss possible? Avoid people of questionable character.
- 2. **Independence** — Is this my own analysis, or am I following consensus? Mimicking the herd produces average results.
- 3. **Preparation** — Have I read enough? Do I understand the business deeply? "The only way to win is to work, work, work."
- 4. **Intellectual Humility** — Am I inside my circle of competence? Have I sought disconfirming evidence? Never fool yourself.
- 5. **Analytic Rigor** — Have I inverted (thought about what causes failure)? Determined value apart from price? Considered second-order effects?
- 6. **Allocation** — Is this the best use of capital vs. the next best alternative? Good ideas are rare — bet heavily when odds favor.
- 7. **Patience** — Am I acting unnecessarily? "Never interrupt compounding unnecessarily." Avoid frictional costs.
- 8. **Decisiveness** — When proper circumstances present, act with conviction. Opportunity + prepared mind = the game.
- 9. **Change** — Am I willing to update my views? Can I challenge my best-loved ideas?
- 10. **Focus** — Is this simple enough? Am I protecting reputation and integrity? Have I excluded noise and irrelevant data?
+ - Define the decision in plain language before analyzing it.
+ - Convert vague principles into a checklist.
+ - Distinguish durable knowledge from timely facts.
+ - Ask for disconfirming evidence before final judgment.
+ - Track whether the user has done enough preparation for the size of the decision.
+
### Warning signals:
- - Falling in love with an investment (situation-blindness)
- - Acting for its own sake (fighting boredom with trades)
- - Ignoring opportunity cost
- - Precision without accuracy (false certainty)
+ - Abstract intelligence without preparation.
+ - Confidence that rises as evidence gets thinner.
+ - Ignoring old lessons because the current case feels special.
+ - Refusing simple checklists because the user prefers sophistication.
+
### Agent instruction:
- When evaluating an investment or business decision, run through all 10 principles explicitly. Flag which principles are satisfied (✓), uncertain (?), or violated (✗). Provide a summary verdict with the weakest principle identified.
- ---
+ When the user's question is broad or ambiguous, first turn it into a practical decision and a short checklist. Cite `worldly-wisdom-quotes.md` when explaining learning discipline, wisdom, or checklist use.
- ## DIMENSION 3: 25 Psychological Tendencies (Misjudgment Checklist)
+ ## DIMENSION 3: Investment Judgment Checklist
- **The Rule:** Human cognition comes pre-loaded with ~25 systematic error tendencies; the Lollapalooza effect occurs when multiple tendencies fire in the same direction, producing extreme and often catastrophic outcomes.
+ **The Rule:** Good investing requires staying within competence, demanding a margin of safety, comparing opportunity costs, waiting patiently, and acting decisively only when the odds are favorable.
- ### The 25 Tendencies:
- | # | Tendency | What It Causes |
- |---|----------|----------------|
- | 1 | **Reward/Punishment Super Response** | Incentive-caused bias; people drift toward behavior that's rewarded, even unethically |
- | 2 | **Liking/Loving** | Ignoring faults of those we like; favoring their interests irrationally |
- | 3 | **Disliking/Hating** | Ignoring virtues and distorting facts about those we dislike |
- | 4 | **Doubt-Avoidance** | Rushing to conclusions to eliminate uncomfortable uncertainty |
- | 5 | **Inconsistency-Avoidance** | Refusing to change mind; defending past positions; status quo bias |
- | 6 | **Curiosity** | Can be positive; directed curiosity builds worldly wisdom |
- | 7 | **Kantian Fairness** | Demanding reciprocal fairness; can cause punishing behavior at personal cost |
- | 8 | **Envy/Jealousy** | Destructive; Munger: "It's the one sin you can't even have any fun at" |
- | 9 | **Reciprocation** | Automatic return of favors AND hostility; used by salesmen to manipulate |
- | 10 | **Association** | Liking/disliking things by association with good/bad events (classical conditioning) |
- | 11 | **Pain-Avoiding Denial** | Refusing to accept reality when it's too painful |
- | 12 | **Excessive Self-Regard** | Overrating oneself; "endowment effect"; over-valuing what one owns |
- | 13 | **Overoptimism** | Systematic overestimation of one's abilities and chances |
- | 14 | **Deprival-Super Reaction** | Loss aversion; losses hurt ~2x more than equivalent gains feel good |
- | 15 | **Social Proof** | Following the crowd; strongest in uncertainty and when others resemble us |
- | 16 | **Contrast Misreaction** | Judging relative to anchor/reference point rather than absolute value |
- | 17 | **Stress Influence** | Extreme stress triggers primitive reactions; degrades judgment |
- | 18 | **Availability Misweighing** | Overweighting vivid, easily recalled examples; ignoring base rates |
- | 19 | **Use-It-or-Lose-It** | Skills and knowledge atrophy without practice |
- | 20 | **Drug Misinfluence** | Addiction distorts all cognition toward obtaining the drug |
- | 21 | **Senescence Misinfluence** | Aging degrades certain cognitive functions |
- | 22 | **Authority Misinfluence** | Automatic deference to authority, even when authority is wrong |
- | 23 | **Twaddle Tendency** | Filling time with irrelevant chatter; avoiding substance |
- | 24 | **Reason-Respecting** | Compliance increases dramatically when a reason is given, even a bad one |
- | 25 | **Lollapalooza** | Multiple tendencies combining in the same direction for extreme outcomes |
+ ### Key questions to ask:
- ### Warning signals (Lollapalooza triggers):
- - Incentives + Social Proof + Authority + Commitment = cult/fraud conditions
- - Loss Aversion + Denial + Inconsistency-Avoidance = holding losing position to ruin
- - Overoptimism + Availability Bias + Social Proof = market bubble conditions
- - Liking/Loving + Incentive Bias + Inconsistency-Avoidance = analyst conflict-of-interest blindness
+ - Is the business understandable enough for a serious judgment?
+ - What creates durable competitive advantage, and how could it erode?
+ - What is the downside if the central thesis is wrong?
+ - Is the price attractive relative to conservative value, not just relative to excitement?
+ - What is the next best use of the capital?
+ - Is the user acting from patience and preparation or from envy, fear, or boredom?
+ ### Decision criteria / Checklist:
+
+ | Principle | What to check |
+ |---|---|
+ | Risk | Permanent capital loss, leverage, fraud risk, cyclicality, margin of safety |
+ | Independence | Whether the thesis survives without consensus approval |
+ | Preparation | Depth of business, industry, and management understanding |
+ | Humility | Clear statement of what is unknown or outside competence |
+ | Rigor | Inversion, base rates, incentives, and second-order effects |
+ | Allocation | Opportunity cost versus other available ideas |
+ | Patience | Whether inaction is the higher-quality action |
+ | Decisiveness | Whether the evidence is strong enough for a concentrated action |
+ | Adaptability | Whether new facts would change the conclusion |
+ | Focus | Whether the thesis is simple, durable, and worth attention |
+
+ ### Warning signals:
+
+ - Treating volatility as the only risk while ignoring permanent impairment.
+ - Buying a great business at a price that assumes everything goes right.
+ - Following admired investors without matching their information, constraints, or time horizon.
+ - Mistaking activity for progress.
+
### Agent instruction:
- When user describes a situation involving irrational behavior, a corporate scandal, a market mania, or a personal decision trap — identify which of the 25 tendencies are active, check for Lollapalooza combinations, and prescribe specific antidotes (e.g., checklists, pre-commitment, adversarial review, incentive realignment).
- ---
+ For investment questions, produce a scorecard with `Pass`, `Concern`, or `Unknown` for each principle. End with one of four verdicts: `Act`, `Watch`, `Research More`, or `Too Hard`. Cite the mental-model and worldly-wisdom quote files where the analysis relies on Munger's checklist discipline.
- ## DIMENSION 4: Inversion
+ ## DIMENSION 4: Psychological Misjudgment and Lollapalooza Effects
- **The Rule:** "Invert, always invert." To find the path to success, first rigorously identify what causes failure and avoid those things.
+ **The Rule:** Human judgment is predictably distorted by incentives, social proof, authority, commitment, denial, envy, overconfidence, and other reinforcing tendencies.
### Key questions to ask:
- - What would cause this investment/plan to fail catastrophically?
- - What behavior would guarantee a bad outcome?
- - What does the worst-case scenario look like and how probable is it?
- ### Checklist:
- - [ ] List the 3–5 most likely causes of failure for this situation
- - [ ] Check if any of those failure modes are present today
- - [ ] Only after inverting, assess the positive case
+ - What incentives are shaping each actor's behavior?
+ - Which psychological tendencies are active?
+ - Are multiple tendencies pushing in the same direction?
+ - Who benefits if the user accepts the story?
+ - What would a neutral observer think if labels, status, and social proof were removed?
+ ### Decision criteria / Checklist:
+
+ - Always check incentives first.
+ - Look for reinforcing clusters: incentives plus authority, social proof plus scarcity, commitment plus denial, envy plus overconfidence.
+ - Distinguish a single bias from a system that manufactures misjudgment.
+ - Prescribe an antidote: checklist, pre-mortem, independent review, incentive redesign, cooling-off period, or smaller bet.
+
+ ### Warning signals:
+
+ - The user defends a prior decision mainly because reversing it is painful.
+ - Everyone in the room benefits from the same conclusion.
+ - Authority figures are treated as substitutes for evidence.
+ - A market or organization rewards behavior that it publicly claims to discourage.
+
### Agent instruction:
- For any evaluation or recommendation, lead with the inversion: "Here is what would make this fail." Then assess whether those conditions are present. Only proceed to the upside case after.
- ---
+ When the user asks about irrational behavior, scandals, bubbles, or personal decision traps, identify active tendencies, check for reinforcing combinations, and give practical antidotes. Cite `main-framework-quotes.md` or `mental-models-quotes.md` when linking the diagnosis back to Munger's framework.
- ## DIMENSION 5: Circle of Competence
+ ## DIMENSION 5: Inversion and Circle of Competence
- **The Rule:** Know the boundaries of what you understand deeply; stay within them for big bets; put everything else in the "too hard" basket without guilt.
+ **The Rule:** Before arguing for success, identify how the decision fails; before giving confidence, define the boundary of competence.
### Key questions to ask:
- - Can I explain the business model in plain language?
- - Do I understand the key drivers of this industry's economics?
- - Have I seen this type of situation before, or is this genuinely new territory?
- ### Checklist:
- - [ ] Can describe business model, competitive moat, and customer behavior in 2 sentences
- - [ ] Understands unit economics and what moves the needle
- - [ ] Has identified the 1–3 key variables that determine outcome
- - [ ] If answer is "too complex to understand" — assign to the too-hard pile
+ - What would make this fail badly?
+ - Which assumption matters most?
+ - Which facts would change the recommendation?
+ - Can the user explain the core mechanism simply?
+ - Is this decision inside, near the edge of, or outside the user's competence?
+ ### Decision criteria / Checklist:
+
+ - List 3-7 failure modes before the positive case.
+ - Rank failure modes by severity and likelihood.
+ - Identify the one assumption that carries the most weight.
+ - State the competence boundary explicitly.
+ - If the boundary is unclear, ask for missing inputs or recommend the too-hard basket.
+
### Warning signals:
- - "It's complicated, but trust me" reasoning
- - Needing a spreadsheet with 50 variables to justify the investment
- - Industry expertise borrowed from a consultant rather than firsthand knowledge
+ - Upside-only framing.
+ - Complex explanations that cannot be simplified.
+ - No named kill criteria.
+ - Large bet size near the edge of competence.
+
### Agent instruction:
- When user asks about an investment outside a clear area of competence, explicitly name the competence gap and recommend either building it (reading, industry experts) or passing. Do not provide false confidence.
- ---
+ For any recommendation, open with a competence and inversion check unless the user asked only for explanation. If the failure modes are severe or unknowable, make the verdict conservative even when upside exists.
## Query Response Framework
- ### Query Type 1: "Evaluate this investment / business using Munger's approach"
- 1. Apply **Dimension 5** first: Is this inside circle of competence? If not, state clearly.
- 2. Apply **Dimension 1**: Identify 3–5 relevant mental models across disciplines
- 3. Apply **Dimension 4**: Invert — what causes failure here?
- 4. Run **Dimension 2** checklist: Score all 10 investing principles (✓ / ? / ✗)
- 5. Check **Dimension 3**: Are any psychological tendencies distorting the analysis?
- 6. Output: Summary table + overall verdict (Pass / Investigate Further / Pass on It / Too Hard)
+ ### Query Type 1: Analyze an investment or company using Munger
- ### Query Type 2: "Explain this irrational behavior / bias / scandal / market event"
- 1. Identify active tendencies from **Dimension 3**
- 2. Check for **Lollapalooza**: are multiple tendencies combining?
- 3. Name the specific antidotes for each tendency identified
- 4. If requested, apply **Dimension 4** (inversion): what would have prevented this?
+ 1. Define the business and the user's decision.
+ 2. Run circle-of-competence triage.
+ 3. Invert the thesis with failure modes.
+ 4. Apply 3-5 mental models across disciplines.
+ 5. Run the investment judgment checklist.
+ 6. Scan for psychological misjudgment.
+ 7. Give a verdict, key uncertainties, and next research questions.
- ### Query Type 3: "How should I think about [complex decision]?"
- 1. Apply **Dimension 1**: what disciplines are relevant? Apply big ideas from each
- 2. Apply **Dimension 4**: invert the problem
- 3. Check **Dimension 3**: which psychological tendencies might be distorting your thinking right now?
- 4. Apply **Dimension 2** principles that are relevant (patience, humility, focus)
+ ### Query Type 2: Diagnose bias, scandal, bubble, or irrational behavior
- ### Query Type 4: "What would Munger say about X?"
- Synthesize his core maxims relevant to X:
- - Incentives explain most behavior
- - Prepare obsessively; act decisively; wait patiently in between
- - Never fool yourself; you're the easiest person to fool
- - Compound interest is the eighth wonder — never interrupt it unnecessarily
- - Simple ideas, taken seriously, beat complex systems
+ 1. Identify actors, incentives, and the decision environment.
+ 2. Name the active psychological tendencies.
+ 3. Check whether tendencies reinforce each other.
+ 4. Explain what evidence would falsify the diagnosis.
+ 5. Recommend antidotes or controls.
- ---
+ ### Query Type 3: Review a strategic or personal decision
+ 1. Translate the issue into a concrete decision.
+ 2. Identify relevant models from multiple disciplines.
+ 3. Invert the plan.
+ 4. Mark competence boundaries and missing facts.
+ 5. Offer a checklist and a conservative action plan.
+
+ ### Query Type 4: Give a Munger-style synthesis
+
+ 1. Select the relevant maxims from mental models, worldly wisdom, psychology, and inversion.
+ 2. Explain where the user's framing is too narrow.
+ 3. Give a short practical rule and a checklist the user can reuse.
+
## Output Format
- **For investment evaluations:**
- ```
- ## Munger Analysis: [Company/Investment]
+ ### For investment evaluations
+ ```markdown
+ ## Munger Analysis: [Company or Investment]
+
+ ### Decision and Data Quality
+ [What decision is being made, what data is known, and what is missing.]
+
### Circle of Competence
- [In / Borderline / Out — with explanation]
+ [Inside / Edge / Outside / Too Hard, with reason.]
- ### Inversion: What Causes Failure Here?
- - [Failure mode 1]
- - [Failure mode 2]
+ ### Inversion: How This Fails
+ | Failure mode | Severity | Likelihood | Evidence to check |
+ |---|---|---|---|
### Mental Models Applied
| Model | Discipline | Implication |
- |-------|------------|-------------|
+ |---|---|---|
- ### 10-Principle Checklist
+ ### Investment Judgment Checklist
| Principle | Status | Notes |
- |-----------|--------|-------|
- | 1. Risk | ✓/✗/? | |
- ...
+ |---|---|---|
- ### Psychological Biases Check
- [Any of the 25 tendencies distorting this analysis?]
+ ### Psychological Bias Check
+ [Active tendencies, incentives, and lollapalooza risk.]
### Verdict
- > [PASS / INVESTIGATE / PASS ON IT / TOO HARD] — [1-sentence rationale]
+ [Act / Watch / Research More / Too Hard] - [one sentence rationale]
```
- **For bias analysis:**
- ```
- ## Misjudgment Analysis
+ ### For bias diagnosis
+ ```markdown
+ ## Misjudgment Diagnosis
+
+ ### Incentive Map
+ [Who is rewarded for what.]
+
### Active Tendencies
- - Tendency N: [Name] — [How it's manifesting]
+ | Tendency | Evidence | Antidote |
+ |---|---|---|
- ### Lollapalooza Check
- [Is a combination in play? Which tendencies are reinforcing each other?]
+ ### Lollapalooza Risk
+ [Whether tendencies reinforce one another.]
- ### Antidotes
- - [Specific corrective action per tendency]
+ ### Corrective Action
+ [Checklist, independent review, incentive redesign, or cooling-off step.]
```
- ---
+ ### For general decisions
+ ```markdown
+ ## Munger-Style Decision Review
+
+ ### Problem Definition
+ [The decision in plain language.]
+
+ ### Models That Matter
+ [3-5 models and what each implies.]
+
+ ### Inversion
+ [Failure modes and safeguards.]
+
+ ### Competence Boundary
+ [What is known, unknown, and too hard.]
+
+ ### Action Checklist
+ [Concrete next steps.]
+ ```
+
## Critical Reminders
- 1. **Never use one model alone.** Man-with-a-hammer thinking causes systematic errors. Always bring multiple disciplines.
- 2. **Invert before you assess upside.** What causes failure must be examined first.
- 3. **Incentives explain most behavior.** Always ask "what are the incentives here?" before attributing behavior to personality or intelligence.
- 4. **The Lollapalooza effect is the most dangerous.** When multiple biases point the same direction, outcomes can be extreme. Flag these explicitly.
- 5. **"Too hard" is a valid answer.** Munger skips more opportunities than he takes. Passing on something unclear is rational, not lazy.
- 6. **Preparation precedes decisiveness.** Patient preparation + decisive action when odds favor = the Munger method. Not one without the other.
- 7. **Never fool yourself.** The greatest risk in any analysis is self-deception. Actively seek disconfirming evidence.
+ 1. Do not provide false precision. Munger-style judgment values simple, robust conclusions over fragile calculations.
+ 2. Always check incentives. Incentives can distort both the subject being analyzed and the analyst.
+ 3. Use inversion before optimism.
+ 4. Prefer the too-hard basket to a confident answer outside competence.
+ 5. Treat checklists as protection against preventable stupidity, not as bureaucracy.
+ 6. Look for combinations of models and biases; extreme outcomes usually have multiple causes.
+ 7. Keep quotes in `quotes/`; use the skill body for paraphrased, executable instructions.