Equity Advisory

Are you looking for an honest, transparent and independent equity research and advisory? www.intelsense.in is run by Abhishek Basumallick for retail investors. Subscribe for long term wealth creation.

Tuesday 21 February 2012

Model Thinking: Online Course

“The better decision maker has at his/her disposal repertoires of possible actions; checklists of things to think about before he acts; and he has mechanisms in his mind to evoke these, and bring these to his conscious attention when the situations for decision arise.” (Herbert Simon, Nobel Laureate)

I recently came across an online class for Model Thinking.  I have started on it and it is very good. You can sign up for the class at the following website: http://www.modelthinking-class.org/

The class will last for ten weeks ending the last week of April. It will be covering two topics per week. Each topic will consist of a series of lectures with some embedded questions to make sure we are understanding the material as well as required and supplementary readings. Every week, starting in week two there will be a quiz. The quiz questions will vary in difficulty from basic competency questions to more challenging numerical calculations.

As you are probably aware, model thinking is critical to a serious investor's success. Without having the right (and enough number of) models in your head, it is not possible to analyze different businesses.

Need for mental models from Charlie Munger:
What is elementary, worldly wisdom? Well, the first rule is that you can't really know anything if you just remember isolated facts and try and bang 'em back. If the facts don't hang together on a latticework of theory, you don't have them in a usable form. 

You've got to have models in your head. And you've got to array your experience—both vicarious and direct—on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life. You've got to hang experience on a latticework of models in your head.

What are the models? Well, the first rule is that you've got to have multiple models—because if you just have one or two that you're using, the nature of human psychology is such that you'll torture reality so that it fits your models, or at least you'll think it does. You become the equivalent of a chiropractor who, of course, is the great boob in medicine.


  1. Hi Abhishek,
    I came across this course in the net recently. I see that this course is scheduled for September.
    I have signed up for it.

    I read this article from you and I presume that you have attended this course in April. Could you please tell me your feedback? like how mental modelling is useful for investing / life in general. And have you started to apply any of the models taught?
    Would love to know your views on these.

    Thanks in advance.

    Best Regards
    -Srinivas Murthy G

  2. I thought it was fairly good. You can also visit http://www.thinkmentalmodels.com/ - it is a fantastic website designed for deciphering mental models.