One Model at A Time

Since 1985, a hot dog and a soda at Costco have cost $1.50. Why would a company refuse to raise one price for four decades? Today's model is Charlie Munger's "deserve what you want": the surest way to get something is to become the kind of person — or business — that deserves it. Plus, why some owners accepted less money to sell their company to Warren Buffett.

One Model at a Time is a Thousand Bagger show. Each episode explains one mental model in about three minutes.

Warren Buffett spends most of his working day doing one thing: reading. Knowledge builds like compound interest — each thing you learn makes the next thing easier to understand and connect. Charlie Munger said he'd constantly seen the less-brilliant rise simply by being learning machines. We close with the proof: the man in his eighties who'd avoided tech stocks for decades — then kept learning, and in 2016, at age 85, bought Apple, which became Berkshire's largest holding at over $150 billion.

One Model at a Time is a Thousand Bagger show. New model every episode.

Could you state your strongest opponent's case so well they'd cheer? Most of us can't — we know our side well and theirs as a cartoon. Charlie Munger wouldn't let himself hold an opinion unless he could argue against it better than his opponents could. This episode traces Munger's iron prescription through Ray Dalio's 1982 mistake — when a confident depression call before Congress cost him everything, and taught him to build Bridgewater around the smartest people who disagreed with him.

One Model at a Time is a Thousand Bagger show. New model every episode.

You hear hoofbeats outside your window. Horse, or zebra? Medical students have used that line for decades, and it's the essence of Occam's razor: when two explanations fit the facts, start with the one that needs the fewest assumptions. We test the razor on William of Ockham's 14th-century friar logic — and on Wirecard, the German payments giant whose nearly two billion missing euros everyone kept explaining away, until the simple answer turned out to be the true one.

One Model at a Time is a Thousand Bagger show. New model every episode.

Give the same falling sales to three experts and you'll get three different diagnoses — because each sees only the part their training reveals. Charlie Munger called that the man-with-a-hammer trap, and his cure was the latticework of mental models: carry the big ideas from many fields and use them together. We trace the idea from Munger's 1994 USC talk to the box of chocolates — See's Candies — that taught Warren Buffett three subjects at once.

One Model at a Time is a Thousand Bagger show. New model every episode.