IN THIS EPISODE, YOU’LL LEARN:

• What exactly are mental models?
• The three failures people have with interacting with reality.
• A simple 6-step framework for making mentals into a habit.
• How to utilize what you already know to gain an edge.
• The importance of thinking in first principles to improve your ability to innovate and simplify.
• How to use thought experiments to analyze a business.
• Why using second-order thinking can rapidly enhance your quality of thinking.
• How probabilistic thinking helps make sense of a dynamic world.
• Why spending time thinking about a problem backwards can improve your upside.
• Why you should focus on simple solutions over complex ones.
• And so much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Kyle Grieve: Today, we’re diving into one of the most powerful tools available to great thinkers and investors alike. Mental models. These frameworks are used to gain a deeper understanding of the world, make informed decisions, and solve problems. As I’ll discuss individuals who consistently make better decisions in life, business, or investing are the ones who will succeed, and the ones at the very top are the people with a wide variety of models that can be applied quickly with clarity and discipline. [00:00:27] Kyle Grieve: In this episode, I’ll walk through several timeless mental models that have fundamentally shaped how I think and invest. We’ll explore ideas like the map is not the territory, and how rigid assumptions can lead to poor outcomes. The circle of competence, why staying in your lane creates such an edge. [00:00:42] Kyle Grieve: We’ll look at inversion, which is the art of solving problems. By thinking in reverse, we’ll look at probabilistic thinking and how embracing uncertainty can help improve your odds and a ton more. I’ll also share several personal investing stories, including a few wins and some pretty painful losses that I think illustrate how I’ve applied mental models in the real world. [00:01:01] Kyle Grieve: I found mental models to be easy to give lip service to. They’re very handy tools, and I think many people enjoy learning about them, but have a much harder time implementing them into their daily thinking. I’ll also go over a few strategies for listeners who want to implement multidisciplinary and thinking into a daily habit. [00:01:19] Kyle Grieve: This episode is for anyone who wants to improve their decision making, build better investment habits, and view the world through a more transparent lens, whether you’re just starting or have years of experience. Now, let’s get right into this week’s episode on The Great Mental Models Volume One. [00:01:37] Intro: Since 2014 and through more than 180 million downloads, we’ve studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your host, Kyle Grieve. [00:02:01] Kyle Grieve: Welcome to The Investor’s Podcast. I’m your host, Kyle Grieve, and today we’ll be talking about mental models and how we can use them in both investing and in life. One can argue that winners, whether that’s in life, family, business, or investing, are created by those with the fewest blind spots. Clear thinking is a valuable tool for winning, but it’s only part of the equation.

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