Munger’s Psychology Mindmapped

If you want to know about the properties of elements then you should read the periodic table. If you want to know about the solvency of a company then you should look at its balance sheet. What if we want to learn about our own irrationality? Without any doubt I would read Munger’s psychology of human misjudgment. I came across this gem three years back. Every time I read this, I learn something new about my irrationality. Guy Spier is a Zurich based investor and author of a book entitled The Education of a Value Investor. In a recent interview he told about the value he got out of Munger’s psychology of human misjudgment.

For 18 months, Mr. Spier listened to nothing in his car but a lecture on human misjudgment by Charles Munger, Mr. Buffett’s vice chairman at Berkshire Hathaway. Of the two dozen mental mistakes cited by Mr. Munger, “I realized I was guilty of all of them,” No wonder he has sought, as he says in his book, “to banish the false assumption that I am truly capable of rational thought.” Once he accepted “just how flawed my brain really is,” he writes, “I could design an array of practical work­ arounds based on my awareness of the minefield within my mind.” To escape what he calls “the New York vortex” of bad influences such as envy, greed and hyperactive trading, Mr. Spier moved his fund to Zurich in 2008.

It’s very important to use Munger’s teachings on a daily basis. Knowledge without application is useless; use-it-or-lose-it. To use it on a daily basis we need to make it second nature. There are 24 standard causes of human misjudgment. How do we remember all of them? Is there a better way? Few days back I read about a technique called as mind mapping. Using this technique we can organize information visually so that we can recall them easily when needed.

A mind map is a diagram used to visually organize information. A mind map is often created around a single concept, drawn as an image in the center of a blank landscape page, to which associated representations of ideas such as images, words and parts of words are added. Major ideas are connected directly to the central concept, and other ideas branch out from those. Mind maps can be drawn by hand, either as “rough notes” during a lecture, meeting or planning session, for example, or as higher quality pictures when more time is available. – Wikipedia

For the last few days I have been mind mapping Munger’s psychology of human misjudgment. In this post I am sharing them with you. Few things to note before you look at the mind maps (1) In order to understand the mind maps you should have read Munger’s psychology of human misjudgment several times (2) Click on the mind map (3) Enlarge the mind map to view it clearly (4) Read them in the clockwise direction (5) Repeat several times.



Psychological Denial


Incentive Caused Bias


Consistency and Commitment


Pavlovian Association




Social Proof


Efficient Market Theory


Contrast Effects




Deprival Super-reaction Syndrome


Envy and Jealousy


Mis-gambling Compulsion




Non-Mathematical Nature of Human Brain




Other Biases


Lollapalooza Effects


25 thoughts on “Munger’s Psychology Mindmapped

  1. Thanks for the great work🙂

    I feel a bit sorry for the poor Stanley Milgram. You’ve got his name wrong both times (Miligram, Milgrim)

    You should probably reference your post on memory palaces to go with this. There is a relation to mind maps. They both rely on our ability to work with space in our mind.

    • Barath,

      Yes I did and it’s a decent book to get you started with mind maps.


  2. I have been toiling with this idea of creating a conceptual latticework model that I don’t have to remember / memorize or is not a checklist. The challenge is to connect all the above models in a cohesive manner so that connecting them becomes easier and effortless. I am trying to pivot the concepts based on what we do on a daily basis that can form a MECE framework (mutually exclusive and conclusively exhaustive) on which I can hang all the models I learn and use them on a daily basis. I came up with a small list a) Decision Making b) Learning c) Socializing d) Reminiscing / dreaming e) Problem solving and f) Planning. Would welcome your thoughts and inputs?

    • Thanks for your comments. The hardest part is to use it on a daily basis which I am in the process of learning. Spaced repetition to these models is one way to make it a second nature. Also teaching is a great way to retain this forever. One person who both of this is Sanjay Bakshi [].


      • My way of thinking around this is – get mentor and mentee relation built and help friends / family members / others who want to learn something to learn / make it practice only if we do not have option of teaching🙂

  3. Absolutely fantastic! Your blog is a treasure trove of such rich information. Compile a book – I promise to buy 10 copies🙂
    Thank you.

  4. Dear Jana,
    I have recently discovered your blog. Thanks for your generosity.
    I use the SimpleMind app to mindmap. Would you be able to perhaps share your work so that i can import it in my app and then enhance it. i am happy to share.

    • Husain,

      Thanks for your comments. Unfortunately I lost the original XMind files. All I have are images that you already have.


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