Buffett & Munger's surprisingly simple mental model behind their success, Circle of Competence

The Circle of Competence mental model was developed by Warren Buffett and his business partner Charlie Munger. It is a model that describes the area of understanding that matches a person's skills, abilities, or expertise.
Buffett and Munger used the model to describe limiting one's financial investments away from areas you have limited understanding or expertise and instead focusing on areas where you have the greatest familiarity or edge. Part of the model involves the importance of accurately assessing one's own abilities relative to what one may think they might know.

#WarrenBuffett #CharlieMunger #MentalModel #CognitiveBias

Resources, References, & Recommendations:
Articles:
https://en.wikipedia.org/wiki/Circle_of_competence
https://fs.blog/2013/12/circle-of-competence/
https://palladianpark.com/circle-of-competence/
https://finance.yahoo.com/news/warren-buffett-charlie-munger-building-211841758.html
https://www.wealest.com/articles/circle-of-competence
Munger Circle of Comp. Quotes: https://getpocket.com/read/3345350537 or
https://tradebrains.in/best-quotes-by-charlie-munger/#Charlie_Munger_Quotes_on_Circle_of_Competence
https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect

Books:
Poor Charlies Almanack: https://amzn.to/2lmFePT
The Almanack of Naval Ravikant - https://amzn.to/3peIKZd

Podcast:
https://clearerthinkingpodcast.com/?ep=045

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