The Tri-State’s TRUSTED news source.

Click here to stay informed and subscribe to Herald-Dispatch.

Click #isupportlocal for more information on supporting our local journalists.


Learn more about HD Media

Warren Buffett‘s business partner Charlie Munger credits his business success to avoiding stupidity. He does so by thinking backwards. Inverted thinking doesn’t always solve a problem, but it helps you avoid trouble. It’s an easy way to improve your life.

As a math student in college, Munger was inspired by German mathematician Carl Jacobi (1808-51). Jacobi often solved hard problems by following a simple rule: “man muss immer umkehren” (“invert, always invert”).

“(Jacobi) knew that many math problems are best solved backwards. Indeed many problems can’t be solved forwards,” says Munger.

While Jacobi applied inversion to math, it’s one of the most powerful tools for solving other problems. It’s not enough to think about hard problems one way. Look from the other direction to find inspiration to reach solution.

For example if your organization wants to innovate there’s no need to seek things that improve innovation. Think about those things that prevent innovation. Avoid these and innovation happens. Likewise, rather than thinking about what makes your life good or successful, flip around your thoughts and focus on what makes life bad or unsuccessful. Avoid these things. Don’t be stupid.

Warren Buffett protects against investment stupidity by purchasing companies with a wide economic moat (i.e., an advantage which protects market share and profitability, such as Apple’s brand identity or Google’s patents.) Finding a company like this saves Buffett from making speculative investments (or “damn stupid” investments in the words of his partner Munger). Just as the circle of water around a castle protects it from invasion, economic moats protect the company and the stock price.

Buffett argues in a similar mode — find companies that make something tangible as a defense against gambling with your money. A candy business makes something; a crypto currency business makes nothing.

Munger famously quipped, “All I want to do is know where I’m going to die so I’ll never go there.” This is inversion theory comedy. Don’t be stupid and go to the place where you know you’re going to die.

We all know those places or situations where bad things happen. Like Charlie Munger, avoid those places where you will die small deaths. Here are some:

1. Avoid that crazy boyfriend or girlfriend who’s going to bring you nothing but bad news.

2. Resist sinking money in a restaurant or bar because it feels fun.

3. Don’t try to find out how far you can lean over a cliff (whether real or financial) without falling.

HALT. CEASE. FREEZE. Stop all such crazy things. Don’t be stupid.

Inverting a problem creates a check on stupidity. It’s an easy way to improve your life. Thinking about the opposite of what you want makes you consider other perspectives. Munger says the most effective way to argue your opinion is to invert it. Argue the opposite side. This forces you to consider the strength of your opponent and most importantly the weakness of your own argument. As Munger says, only then are you qualified to argue your opinion.

So spend less time trying to be brilliant and more time trying to avoid the stupid. And the great thing is: Avoiding stupid is easier.

Grant McGuire is a Huntington resident. His email address is grant11955@gmail.com.

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.

Recommended for you