How Would You Guarantee Trading Failure
Charlie Munger's inversion trick — and how flipping the question can unlock better trading decisions
The late Charlie Munger famously said, “All I want to know is where I’m going to die and avoid that…”
Weird thing to say! But this is a take on one of the most powerful mental models, called “inversion.”
And it’s something that can be very useful for traders…
INVERSION
So, Charlie Munger had this trick.
Whenever he was stuck on a problem… he’d flip it.
Instead of asking how do I succeed… he’d ask how do I guarantee failure?
Then he just wouldn’t do that…
And we can use the same thinking in trading to force us to look at things through a different lens.
How would you make sure you never improved as a trader?
Don’t review. Or review so much you never actually take anything from it…
How would you turn a small loss into a big one?
Over-leverage. Stare at the P&L. Trade more actively on choppy days.
How would you guarantee burnout?
Trade a style that doesn’t fit your life. Stay glued to the screen. Never step away.
And the thing is, we know this stuff already, but there’s something unique about a different angle or lens that helps make sense of the solution.
Here’s a short YouTube video explaining the model.
And here’s a link to my latest podcast episode where I dig deeper….
If you feel like you’re banging your head on a brick wall sometimes, this trick might just help the unlock.
Worth a shot anyway 