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Mental Model #3 · Poor Charlie's Almanack
Inversion
Think backwards to see clearly forwards
"Invert, always invert."
Carl Jacobi · adopted by Charlie Munger
Forward Thinking
"How do I make this succeed?"
Optimistic, hopeful — but often blinded by wishful reasoning and confirmation bias.
normal
▶
◀
invert
Inverted Thinking
"What would guarantee failure?"
Brutally clarifying — exposes blind spots and helps you avoid the real killers of success.
How to apply it · four moves
STEP 01
State your goal clearly in one sentence
STEP 02
Flip it: "What would guarantee I fail at this?"
STEP 03
List every credible failure mode — be ruthlessly honest
STEP 04
Treat that list as your anti-checklist. Systematically eliminate them.
Worked example · Investment decision
Forward question
"What makes this a great investment?"
Strong brand, growing market
Talented CEO, good margins
Inverted question
"What would destroy this investment?"
Debt load that can't survive a downturn
CEO who overpays for acquisitions
Business model easy to commoditise
Munger's approach at Berkshire was as much about systematic avoidance as selection — define what destroys value, then simply refuse to go there. "All I want to know is where I'm going to die, so I'll never go there."