have an edge in some domains and not others — and the boundary between the two is where most catastrophic decisions happen. Knowing where your knowledge actually ends, not where your confidence ends, is the single most protective mental model.
The core idea
have an edge in some domains and not others — and the boundary between the two is where most catastrophic decisions happen. Knowing where your knowledge actually ends, not where your confidence ends, is the single most protective mental model.
Connected
Barbell Strategy
at extremes of safety and risk, avoid the mediocre middle.
Discounted Cash Flow
equals future cash flows discounted to present value.
Margin of Safety
below intrinsic value to protect against errors and the unforeseen.
Arbitrage
is profiting from a price difference for the same or equivalent asset across mar
Asymmetric Upside
upside is a payoff structure where the best-case gain is large relative to the w
Cost of Capital
of capital is the minimum return a company or project must earn to justify using