Poor Charlie's Almanack · Concept #1

The Latticework
of Mental Models

How Charlie Munger thinks about thinking

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.

— Charlie Munger, USC Business School, 1994
The Structure of the Latticework
🧠 Psychology Biases · Incentives ⚛️ Physics Critical Mass 📊 Economics Supply · Demand 🎲 Mathematics Probability 🧬 Biology Evolution 📜 History Patterns · Cycles ⚙️ Engineering Redundancy 🔢 Accounting Numbers hide truth YOUR DECISION MAKING DISCIPLINES FEED THE CENTER · THE CENTER APPLIES THEM ALL
Psychology
Cognitive Biases & Incentives
Why humans behave irrationally — and how to account for it in any plan.
Physics
Critical Mass & Tipping Points
Small inputs can trigger disproportionately large outcomes once a threshold is crossed.
Economics
Supply, Demand & Moats
What determines value, pricing power, and why some advantages compound over time.
Mathematics
Probability & Expected Value
How to think in bets rather than certainties — the foundation of rational decision-making.
Biology
Evolution & Adaptation
Systems that don't adapt get replaced. True in markets, organisations, and careers.
Engineering
Redundancy & Failure Modes
Build in backups. Understand how systems fail before trusting them.

❌ The Man with a Hammer

Using only one discipline's models to explain everything. Every problem looks like a nail when all you have is a hammer.

"This is an economics problem."
→ ignores psychology, ignores history,
→ gets blindsided every time.

✅ The Latticework Approach

Cross-referencing multiple models simultaneously. When several disciplines point to the same conclusion — that's a signal to act with conviction.

Economics + Psychology + History
all agree → Lollapalooza Effect
→ high-confidence decision.
100+
Mental Models
Munger recommends building a repertoire across all major disciplines
1
Core Discipline
Most people are dangerously limited to just one lens — their own profession
Compounding Effect
Each new model you add multiplies the value of all models already in your head