I have come across very few people in my life, who can solve complex problems effortlessly. I always wondered why? As usual I came up with an answer.
They are born genius.
For a very long time I never realized that it was a first conclusion bias. Some time back in the book Thinking Fast and Slow by Daniel Kahneman, I came across the following story.
The psychologist Gary Klein tells the story of a team of firefighters that entered a house in which the kitchen was on fire. Soon after they started housing down the kitchen, the commander heard himself shout, “Let’s get out of here!” without realizing why. The floor collapsed almost immediately after the firefighters escaped. Only after the fact did the commander realized that the fire had been unusually quiet and his ears had been unusually hot. Together, these impressions prompted what he called a “sixth sense of danger.” He had no idea what was wrong, but he knew something was wrong. It turned out that the heart of the fire had not been in the kitchen but in the basement beneath where the man had stood.
We have all heard such stories of expert intuition.
The chess master who walks past a street game and announces “White mates in three” without stopping or the physician who makes a complex diagnosis after a single glance at a patient. Expert intuition strikes us magical, but it is not.
This is not a magic or born genius. Grand Master Viswanathan Anand playing chess simultaneously with multiple players. How is this possible?
1. Herbert Simon – Mental Models
Great Herbert Simon an American political scientist, economist, sociologist, psychologist, and a professor, who studied chess masters and showed that after thousands of hours of practice they come to see the pieces on the board differently from the rest of us. He writes
The situation has provided a cue; this cue has given the expert access to information stored in memory, and the information provides the answer. Intuition is nothing more and nothing less than recognition.
In the book Talent Is Overrated – Geoff Colvin writes
Expert players could look for just a few seconds at a chessboard with a real chess position, including as many as twenty-five pieces, and recall it perfectly, while novices could look at the same board and recall the places of only five or so pieces; but when the chess positions were random, experts could recall scarcely more than the novices. The conclusion was that top-ranked chess players did not posses incredible general memories but did posses an amazing ability to remember real chess positions.
Experts differ from the ordinary people by doing what is called as Deliberate Practice. Geoff Colvin writes
Deliberate practice is characterized by several elements, each worth examining. It is activity designed specifically to improve performance, often with a teacher’s help; it can be repeated a lot; feedback on results is continuously available; it’s highly demanding mentally, whether the activity is purely intellectual such as chess or business-related activities, or heavily physical, such as sports; and it isn’t much fun.
Malcom Gladwell author of Outliers talks about the 10,000 hour rule
By doing deliberate practice they are building a mental model – a picture of how their domain functions as a system. This is one of the defining traits of great performers. This should explain how Viswanathan Anand played chess simultaneously with multiple players.
A mental model is a representation inside your head of an external reality.
Mental Model is an idea of Herbert Simon. He writes
A large part of the difference between the experienced decision maker and the novice in these situations is not any particular intangible like “judgment” or “intuition”. If one could open the lid, so to speak, and see what was in the head of the experienced decision-maker, one would find that he had at his disposal repertoires of possible actions; that he had checklists of things to think about before he acted; and that he had mechanisms in his mind to evoke these, and bring these to his conscious attention when the situations for decisions arose.
It is clear that to master a domain you need to do the following
- Deliberate Practice
- Build the mental model which captures the core of the domain
In the book Succeeding – John T. Reed writes
When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles – generally three to twelve of them – that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.
2. Charlie Munger – Latticework of mental models
Charlie Munger learned the idea of mental models from Herbert Simon. Munger extended this idea to acquire worldly wisdom. In his speech on Elementary Worldly Wisdom he writes
What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. 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. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life. You’ve got to hang experience on a latticework of models in your head.
Need for multiple models.
What are the models? Well, the first rule is that you’ve got to have multiple models—because if you just have one or two that you’re using, the nature of human psychology is such that you’ll torture reality so that it fits your models, or at least you’ll think it does.
3. Why should we have models from multiple disciplines?
It’s like the old saying, “To the man with only a hammer, every problem looks like a nail.” And of course, that’s the way the chiropractor goes about practicing medicine. But that’s a perfectly disastrous way to think and a perfectly disastrous way to operate in the world. So you’ve got to have multiple models. And the models have to come from multiple disciplines—because all the wisdom of the world is not to be found in one little academic department. That’s why poetry professors, by and large, are so unwise in a worldly sense. They don’t have enough models in their heads. So you’ve got to have models across a fair array of disciplines.
This seems to be a daunting task. How long will this take?
You may say, “My God, this is already getting way too tough.” But, fortunately, it isn’t that tough—because 80 or 90 important models will carry about 90% of the freight in making you a worldly-wise person. And, of those, only a mere handful really carry very heavy freight.
4. Why should we listen to Charlie Munger?
According to Warren Buffett, his business partner, Charlie Munger has
The best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you even finish the sentence.
5. Other References
In the book How to Think Like Sherlock Holmes – Maria Konnikova writes
For Sherlock Holmes, a person’s brain attic really is an incredibly concrete, physical space. Maybe it has a chimney. Maybe it doesn’t. But whatever it looks like, it is a space in your head, specially fashioned for storing the most disparate of objects. And yes, there is certainly a cord that you can pull to turn the light on or off at will. As Holmes explains to Watson, “A fool takes in all the lumber of every sort that he comes across, so that the knowledge which might be useful to him gets crowded out, or at best is jumbled up with a lot of other things, so that he has a difficulty in laying his hands upon it. Now the skillful workman is very careful indeed as to what he takes into his brain-attic.”
This is what Steve Jobs said on creativity
Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people. Unfortunately, that’s too rare a commodity. A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.
From all of the above I was able to answer my earlier question on experts.
Experts are made and not necessarily born.
After going through all this I decided to learn all the major models from multiple disciplines. Following are the sources I used to create the models.
My Latticework of Mental Models
- Commitment and Consistency
- Contrast Effects
- Deprival Super Reaction Syndrome
- Do-Say Something Syndrome
- Envy and Jealousy
- Hindsight Bias
- Ideological bias
- Incentive Caused Bias
- Lollapalooza Effect
- Man with a hammer syndrome
- Regression to the mean
- Self Deception and Denial
- Social Proof
- Status Quo Bias
- Use it or lose it
- Number Sense
- Power Law
- Proof by Contradiction
- The Joys of Compounding
- Bayes Theorem
- Central Limit Theorem
- Correlation and Causation
- How To Lie With Statistics
- Law of Small Numbers
- Measures Of Central Tendency
- Regression Analysis
Accounting and Finance
- Dupont Ratio Analysis
- Earnings Yield
- Manias, Panics, and Crashes
- Mr Market
- Owner Earnings
- Return on Invested Capital
- Comparative Advantage
- Diminishing Marginal Utility
- Marginal Cost
- Opportunity Cost
- Prisoner’s Dilemma
- Supply and Demand
- Tragedy of the Commons
- Feedback loops
- Autocatalytic reactions
- Critical Mass
- Newton’s Laws
- Black Swan
- Complex Adaptive Systems
- Risk vs Uncertainty
- Risk vs Volatility
- Working Backwards