🧵THREAD🧵
I've always wondered about the investing success of Charlie Munger. I don't agree with him in everything he says, especially about #bitcoin. But, I try to learn from his life.
In this thread, you will learn more on Circle of Competence, Charlie Munger's Mental Model
I've always wondered about the investing success of Charlie Munger. I don't agree with him in everything he says, especially about #bitcoin. But, I try to learn from his life.
In this thread, you will learn more on Circle of Competence, Charlie Munger's Mental Model
2/12
Circle of Competence is a mental model introduced by Charlie Munger. Circle of Competence is all about focusing on what you know best and avoiding the rest.
Circle of Competence is a mental model introduced by Charlie Munger. Circle of Competence is all about focusing on what you know best and avoiding the rest.
3/12
According to Charlie Munger, you have to know what you know and what you don't know. Your circle of competence is the area where you have expertise and knowledge. Something you're comfortable explaining to others in plain, simple language.
According to Charlie Munger, you have to know what you know and what you don't know. Your circle of competence is the area where you have expertise and knowledge. Something you're comfortable explaining to others in plain, simple language.
4/12
Charlie Munger believes that investors should stay within their circle of competence when making investment decisions. They should only invest in companies they understand, and avoid investing in things they know nothing about.
Charlie Munger believes that investors should stay within their circle of competence when making investment decisions. They should only invest in companies they understand, and avoid investing in things they know nothing about.
5/12
Warren Buffet also follows the same principle. He sticks to his circle of competence and only invests in companies he knows and understands. One such example is his investment in Coca-Cola.
Warren Buffet also follows the same principle. He sticks to his circle of competence and only invests in companies he knows and understands. One such example is his investment in Coca-Cola.
6/12
Charlie Munger and Warren Buffet also follow this principle in their own companies. For example, Warren Buffet has never invested in technology because it's outside his circle of competence.
Charlie Munger and Warren Buffet also follow this principle in their own companies. For example, Warren Buffet has never invested in technology because it's outside his circle of competence.
7/12
If you are an entrepreneur, understanding your circle of competence is crucial. Focus on what you know best and avoid things you don't. It will help you make better decisions, stay competitive and succeed in your business.
If you are an entrepreneur, understanding your circle of competence is crucial. Focus on what you know best and avoid things you don't. It will help you make better decisions, stay competitive and succeed in your business.
8/12
When evaluating an investment, you need to assess the business's fundamentals, including its competitive position, industry dynamics, and future growth prospects. If you don't have the expertise, it's best to avoid the investment.
When evaluating an investment, you need to assess the business's fundamentals, including its competitive position, industry dynamics, and future growth prospects. If you don't have the expertise, it's best to avoid the investment.
9/12
Knowing your circle of competence is also important for your personal life. It will help you avoid making decisions that are outside your expertise, reducing the risk of failure.
Knowing your circle of competence is also important for your personal life. It will help you avoid making decisions that are outside your expertise, reducing the risk of failure.
10/12
Remember, the circle of competence is not static. It can be expanded by learning and accumulating new knowledge. Keep expanding your circle of competence to increase your expertise and make better decisions. That's how Berkshire invested in Apple.
Remember, the circle of competence is not static. It can be expanded by learning and accumulating new knowledge. Keep expanding your circle of competence to increase your expertise and make better decisions. That's how Berkshire invested in Apple.
11/12
To sum up, understanding your circle of competence is crucial for investing and entrepreneurship. It will help you stay within your expertise, avoid risky investments, and make better decisions.
To sum up, understanding your circle of competence is crucial for investing and entrepreneurship. It will help you stay within your expertise, avoid risky investments, and make better decisions.
12/12
Hope you found this thread useful. If you did, please like and retweet. And don't forget to follow me for more interesting threads like this.
#MentalModel #Investment #Entrepreneurship #CircleOfCompetence
Hope you found this thread useful. If you did, please like and retweet. And don't forget to follow me for more interesting threads like this.
#MentalModel #Investment #Entrepreneurship #CircleOfCompetence
If you like this thread, please like this tweet and follow me for similar content. I write on mental models, books and investing.
https://twitter.com/dpk2m/status/1628087702406017029
• • •
Missing some Tweet in this thread? You can try to
force a refresh
