15 Mental Models I Keep Coming Back To : 4 of 15
Here is Part four of a series where I talk about fifteen mental models. Let's get to it.
Anyone who has ever tried to pick a restaurant with five people knows this particular kind of suffering. You ask, “Where do you want to go?” and the entire group suddenly develops the personality of a beige wall.
“I’m fine with anything,” someone says. Which is not only unhelpful, it’s also a lie. (I unfortunately have been this person)
But flip the question. Ask, “Where don’t you want to go?” and suddenly it turns into a press conference. No long drives. No experimental vegan places where the menu reads like a chemistry project. No sushi because “it’s not really filling.” No pizza because “we had that last week.” And definitely nowhere too expensive.
Within two minutes, you’ve eliminated half the city and, miraculously, you’re basically done. That’s inversion. Not glamorous, not complicated. Just figuring out what to avoid and letting the answer reveal itself.
Charlie Munger loved this sort of thing. He once said he wanted to know where he was going to die, just so he could never go there. Which is either very wise or slightly alarming, depending on the day. But the idea sticks. Avoid the obvious disasters and you don’t need to be a genius about the rest.
I’ve realised my own investing style leans quite heavily on this, probably more than I’d like to admit. I find it easier to rule things out than to convince myself something is a great idea. If a business needs too many things to go perfectly, I just sort of… drift away from it.
That’s basically how I approach valuation as well. Instead of building up a story about what a company could be worth, I start with the current price and work backwards. What would have to be true for the current price to make sense? How fast does it need to grow? How long does that growth need to last? It’s an oddly grounding exercise, and I’ve grown to like it. Even if it means missing out on some great ideas.
I’ve noticed this creeping into other parts of life as well, almost by accident.
With friendships, for example, I don’t think I have a grand theory of what makes a great friend. But I do have a fairly clear sense of what a bad one looks like. And most of the time, just trying not to be that person seems to work reasonably well.
Same with decisions in general. When I’m stuck, I’ve found it easier to list what I don’t want than what I do. It’s quicker, and somehow more honest. The answer doesn’t always appear immediately, but the space around it becomes clearer.
None of this is particularly profound. It’s just something I’ve found myself coming back to. A way of looking at things that feels a bit more manageable. Less about finding the perfect answer, more about ruling out the obviously bad ones.
Which, if you think about it, is how that group of five ends up eating anywhere at all. Not because they found the perfect restaurant. Just because they managed to eliminate enough terrible ones.
Thanks for reading.
Cover image taken from Unplash