Basic Mungernomics

In this shitty bathroom analysis we examine pleb success probability in a Mungernomics framework using our Proprietary Decisioning System [smoov.bra.in2023] to test our hypothesis.

A Study in Simplicity and Uncommon, Common Sense 📊

Decepticon intellectuals come in many forms.

But one of their most common tricks is to play the role of the market/economic expert.

Bold predictions.

Fancy charts.

Long exposition.

Pseudo quant.

Devoid of logic.

Immovably committed to bold positions because it makes you sound smarter than being humbly realistic.

A clever trick to gain erroneous credibility and praise.

But most of them do not have a clue.

Because they are simply actors.

Actors who play experts and intellectuals on Twitter or on TV.

Their job is to scam you into buying into the local kleptocracy’s Ponzi scheme.

“Trust the charts.”

“Trust the science.”

“Trust the data.”

But actors do not understand probabilistic processes, or how to model simplicity in stochastic environments.

So they sell when they should buy and buy when they should sell.

They go left when they should go right.

Up when they should go down.

They hold when they should charge.

Charge when they should hold.

And they live in a world of confusion.

But winning doesn’t have to be a complex process, and you don’t need to be a super genius to do it.

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” —Munger

At Deimos-One, we have an Idea Lab culture where we’re always creating, modifying, and destroying ideas all the time. We love to play around with ideas and disagree. No ideas are off the table, and no one takes it personally when someone challenges their idea.

Everything is always put to the test, and may the best ideas win.

We’re constantly learning.

Mungernomics (this is what I like to call Charlie Munger theorems) teaches that the rapid destruction of your ideas when the time is right is one of the most valuable qualities you can ever have — that you must force yourself to consider arguments on the other side. So, we are constantly developing ideas, sharpening and refining them, putting them into the fire, to see what remains in the end as “truth.”

In the same vein, I’ve come to realize that while being intelligent can take you far in life, intelligence can also, quite often, be a huge obstacle to progress — and a lot of high IQ individuals often end up becoming “losers” because they spend all their time in a hyper-quant mode of theory and are unable to model simplicity in application.

These individuals often have terrible temperaments, and are unable to keep raw irrational emotion under control.

They believe they are the smartest person in the room, and are ruled by ego.

They lack patience and discipline and are unable to suffer adversity or setbacks without going crazy.

When things go wrong (they always do) they completely fall apart and self-destruct.

A fatal flaw.

But figuring out how to win doesn’t have to be a highly complex process.

It doesn’t need to be tedious and exhausting.

It doesn’t have to be that hard.

You don’t need to have a super high IQ.

You don’t need to do the “current thing” or invest in fancy tools.

You don’t need to use multivariate, nonlinear, or stochastic partial differential equations.

You don’t need advanced AI or machine learning or complex mathematical models.

You don’t need the charts.

You don’t need an elite university degree.

All you really need to do is keep it simple.

And then be consistent.

We live in a time where being an intellectual has never been easier.

Most of the hard work has already been done for you.

The answers you seek have already been compiled by scholars old and new — and printed in books of knowledge — and you can massively improve your odds of winning simply by reading them.

“I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.” —Munger

You don’t even have to put in a ton of effort to do it. All you need to do is just sit there and keep your eyes open — then move your eyes up and down the printed pages.

It really isn’t that hard.

It isn’t high tech.

It’s low tech.

And if you read around 20 pages each day, you’ll out-perform close to 99% of your peers.

The bar is low.

So, how can you take advantage of this hole in the Matrix?

This is where Mungernomics comes in.

Munger’s philosophy on decision making (aka Mungernomics) is deeply rooted in multidisciplinary thinking and approaching problems using mental models to navigate complexity and risk.

Some key elements of the framework include:

Mental Models: Building simplified representations of reality to help you better understand the world, make predictions, avoid cognitive biases, and improve decision-making capabilities.

Multidisciplinary Approaches: Drawing and synthesizing knowledge and insights from a wide array of disciplines, including psychology, economics, biology, and physics to analyze complex problems.

Inversion: Solving problems by thinking in reverse. Instead of focusing on how to achieve a desired result, do the opposite to avoid undesirable outcomes.

The Circle of Competence: Knowing your limitations and sticking to areas you understand to avoid falling into unfamiliar territory and exposing yourself to unnecessary risk.

A Long-Term Perspective: Be patient and stay consistent over long timescales for best results.

Ethical Considerations: Make choices that align with personal values and societal norms for maximum positive impact.

Learning and Adaptation: Make a lifelong commitment to learning to maximize success. Read and learn broadly. This will help you make better decisions over time.

One of the core principles within the framework involves avoiding stupid decisions and not making big mistakes — instead of trying to be the smartest person in the room.

You don’t have to outsmart everyone else to win.

You don’t need to be “different” or exceptional.

You don’t need to come up with interesting and rare ideas.

These assumptions are inherently false.

Especially in this era of AI, big data, and rapid information.

So, how can a common pleb avoid being a loser?

Perhaps we should look to the game of tennis for answers.

In his exceptional book ‘Extraordinary Tennis For The Ordinary Player‘ Simon Ramo subdivides the game of tennis into two games: the professionals and everyone else.

His observations of the game were: while the rules of tennis remain the same, the way points are scored are radically different.

Professional players at the U.S. Open or Wimbledon have to work extremely hard to score a point. Each player, whether ranked number 1 or number 100, is only marginally better than their opponent, so each player has to play an almost perfect game to win.

With each pro player having great skill, every match is often decided by a few points here and there.

On the opposite end of the spectrum is amateur tennis, which is a different game entirely.

There are no long rallies.

Form and technique are subpar.

There are a lot of unforced errors.

Shots are missed by huge margins.

Ramo, a scientist and statistician, observed that in amateur tennis, roughly 80 percent of points are lost, not won. Lost points, as defined by Ramo, are the result of a player making an unforced error, rather than hitting a winner.

He writes: “The amateur duffer seldom beats his opponent, but he beats himself all the time. The victor in this game of tennis gets a higher score than the opponent, but he gets that higher score because his opponent is losing even more points.”

The lesson is that the vast majority of players would have a lot more success by working on “not losing” instead of trying to “win.”

This amateur game of “losers” can be observed everywhere: The amateur crypto investor who miscalculates the market and loses his entire net worth. The amateur chess player who makes all the wrong moves and loses all his pieces. The common worker who gets burned competing with complex algorithms and advanced AI.

The list goes on and on.

But, can a common pleb really become a winner? 

Let us see.

We will run the analysis using default settings in [smoov.bra.in2023]

First, we evaluate the known params:

-My eyes can read words
-Others eyes can also read words
-Others choose not to read
-I read
-When I read I gain knowledge
-Knowledge is power

bla bla bla

Now, let us consider a function of a complex variable f(z) = win + tf where we assign books, IQ, brain RAM/ROM, knowledge level, cash, freedom, and power a specific weight to form a probabilistic argument to estimate the chance that a winning event will occur, and/or the event’s place in spacetime, and/or the number of active events that may occur within or beyond our star.

Let us import the vars into our shitty bathroom formula:

tf² [(x²) + (y²) + y(z²)] + win
P = ——————————————
Σi (365x – book + iq²)

Solving for win + tf we can conclude with a 69.699% probability that people who read usually out-perform people who don’t read.

Note: If none of this makes sense to you, it is likely a runtime error… [smoov.bra.in2023] needs more CPU and RAM to process fully but the simulation params have prevented this. This is an ongoing issue that the developers expected but have been unable to correct.

I digress.

As mentioned earlier, avoiding stupid mistakes is more important than being smart.

And you can avoid making stupid decisions by sticking to what Munger calls the ‘circle of competence’.

The circle of competence is a simple concept. The basic idea is that every one of us (through study or experience) has acquired skill and knowledge in specific fields. Munger suggests we stick to these competencies (as well as the fundamentals) and exercise caution when we step outside our circle.

The moment we step outside our ‘circle of competence’ we instantly become amateurs, but for some reason (unexplained by modern science) we often refuse to accept the limitations of our abilities outside our core skills, exposing ourselves to great risk.

For example, I may have experience running a space company, but I shouldn’t just blindly assume that I could manage a chicken rental business very well. The nature and economics of both businesses can vary a great deal.

But quite often, the fundamentals remain the same.

Very relatable to tennis.

Sometimes instead of being flashy and going for an ESPN top 10 highlight, you just have to put the ball in play.

You just have to rally.

Sometimes all you need to do to win is just not make unforced errors.

So what books should I read?

If you’ve made it this far, good job, yung warrior.

You have demonstrated a curiosity for learning (arguably the most important thing) and if you get into the mental habit of relating what you’re reading to the basic structure of the underlying ideas being presented, you will gradually accumulate some wisdom.

The idea is to spend a little time each day trying to be wiser than you were when you woke up.

If you do this, you’ll make gains.

You’ll beat the market.

You’ll get a dub.

You don’t have to be the “smartest” but if you become a learning machine, the wisdom you’ll acquire over long timescales will pay off a thousand times or more.

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero.”—Munger

Life is a game of probabilities, and in a world of uncertainty, there is no better teacher than history when it comes to predicting and/or determining the future.

Every day, try to read at least 20 pages. Books have the highest ROI in the world.

You can find answers worth billions of dollars in a $20 history book, and if you get into the habit of reading — striving to get a little wiser each day — you’ll gradually acquire knowledge, outgain your peers, and eventually outperform them.

You can do it.

It all comes down to discipline, knowledge, and self-control.

Remember, the bar is low these days.

These days, it’s easy to win.

Because most people are weak.

Physically, mentally, emotionally, spiritually.

They don’t train.

They don’t study.

They are soft, undisciplined, and lack determination and direction.

They are leaves in the wind.

So, if you step into the arena right now, you may find that your toughest opponent will be yourself — and if you have even the tiniest bit of self-discipline, mental toughness, and drive, you will out-perform nearly everyone else on Earth.

At the end of the day, your future is in your hands.

Effort cannot be bought.

Fancy formulas cannot replace it.

Complex charts cannot support it.

The warrior spirit = real work.

Here are a few of my notes from Poor Charlie’s Almanack. I hope these maxims (aka basic Mungernomics) will help you as much as they’ve helped me.

1. Humans have been writing down their best ideas for 5,000 years. Read them.

2. Make friends with smart dead people. Adam Smith, Darwin, Cicero, Ben Franklin — whoever interests you. Read their writing. Steal their ideas. They don’t need them anymore.

3. Find a simple idea and take it seriously.

4. Good ideas are rare. When you find one bet heavily.

5. Work on your best idea. Don’t diversify.

6. Stop multitasking. Concentrate.

7. Do the unpleasant tasks first.

8. Avoiding stupid mistakes is more important than being smart.

9. Great businesses are built by going ridiculously far in maximizing or minimizing one or a few things. Think Costco.

10. Find out what you are best at. Then pound away at it. Forever.

11. What do you have an *intense* interest in? Do that for money.

12. Many hard problems are solved best when approached backwards.

13. Think of ideas as tools. When a better tool comes along use it.

14. Optimize for independence.

15. Self improvement has no end.

16. Use money to buy freedom.

17. Don’t work with anyone you don’t admire.

18. Don’t sell anything you wouldn’t buy.

19. Avoiding a bad habit is easier than breaking a bad habit.

20. Incentives rule everything around you. Look for them.

21. Learning is changing behavior.

22. Charlie has read hundreds of biographies. Do the same.

23. Clip your business and personal expenses. Small leaks sink big ships.

24. Don’t confuse intelligence with invincibility.

25. Bad things will happen to you. It’s inevitable. When they do get up and keep going and remember the next maxim.

26. Self pity has no utility.

27. Only play games where you have an edge.

28. Avoid mob rule. Avoid demagogues. Avoid dogma. Avoid bureaucracy.

29. Develop durability.

Final Thoughts

We live in a time where being an intellectual has never been easier. But yet, some of the biggest issues still facing society are: a lack of knowledge, the inability to think critically or construct a persuasive argument, and the inability to solve problems in an algorithmic way.

The more people talk, the less we listen. Everyone is an expert, but nobody knows anything. Their words are loud, confusing, and have no meaning. The influencer has no influence.

They’re boring.

Stodgy.

Unlettered.

Uninspiring.

Empty.

To avoid this and become interesting/influential/a winner, it’s important to read widely and develop interests, especially in your 20s.

Read and learn as much as you can.

You don’t need to know it all, just focus on what you can learn/achieve.

Start small and aim big.

You’ll make gains over time, unlocking new skills.

This goes far past any college degree.

Mastery is an ongoing process that requires broad learning over long timescales.

A lifetime.

Doing this will make you an interesting person people want to talk to, and listen to, even if they don’t like you or agree with you.

That alone can make you persuasive — able to think deeply and solve hard problems — opening doors you never thought possible.

There’s a new, updated version of Poor Charlie’s Almanack coming out in November. I’ve already preordered my copy, you can get yours HERE.