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An Investor and counsellor in Financial Market

Wednesday, November 01, 2017

Inversion and The Power of Avoiding Stupidity

Charlie Munger, the business partner of Warren Buffett and Vice Chairman of Berkshire Hathaway, is famous for his quote “All I want to know is where I'm going to die, so I'll never go there.” That thinking was inspired by the German mathematician Carl Gustav Jacob Jacobi, famous for some work on elliptic functions that I'll never understand. Jacobi often solved difficult problems by following a simple strategy: “man muss immer umkehren” (or loosely translated, “invert, always invert.”)
“[Jacobi] knew that it is in the nature of things that many hard problems are best solved when they are addressed backward,” Munger counsels.
While Jacobi applied inversion mostly to mathematics, the model is one of the most powerful mental models in our toolkit.
It is not enough to think about difficult problems one way. You need to think about them forwards and backward. Inversion often forces you to uncover hidden beliefs about the problem you are trying to solve. “Indeed,” says Munger, “many problems can't be solved forward.”
Let's take a look at some examples. Say you want to improve innovation in your organization. Thinking forward, you'd think about all of the things you could do to foster innovation. If you look at the problem by inversion, however, you'd think about all the things you could do that would discourage innovation. Ideally, you'd avoid those things. Sounds simple right? I bet your organization does some of those ‘stupid' things today.
Another example, rather than think about what makes a good life, you can think about what prescriptions would ensure misery.
Avoiding stupidity is easier than seeking brilliance. 
While both thinking forward and thinking backward result in some action, you can think of them as additive vs. subtractive.
Despite our best intentions, thinking forward increases the odds that you'll cause harm (iatrogenics). Thinking backward, call it subtractive avoidance or inversion, is less likely to cause harm.
Inverting the problem won't always solve it, but it will help you avoid trouble. You can think of it as the avoiding stupidity filter. It's not sexy but it's a very easy way to improve.
So what does this mean in practice?
Spending time thinking about the opposite of what you want doesn't come naturally to most people. And yet may of the smartest people in history, have done this naturally.
Inversion helps improve understanding of the problem. By forcing you to do the work necessary to have an opinion you're forced to consider different perspectives.
If you're to take anything away from inversion let it be this: Spend less time trying to be brilliant and more time trying to avoid obvious stupidity. The kicker? Avoiding stupidity is easier than seeking brilliance.

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