Be Prepared To Lose Your Job In The Future, If You Don’t Learn This One Skill Now

Jeff Bezos, Warren Buffett, and Elon Musk all take this one approach

“What’s Going to Change?” Is The Wrong Question

Like I said above, Jeff Bezos is often asked, “What’s going to change in the next 10 years?” That’s actually not the key question though. Listen to how he reframes it (emphasis mine):

  • Identify what you think is going to be really important (i.e., artificial intelligence, virtual reality, blockchain, synthetic biology, nanotechnology).
  • Pick one of those areas to invest in and master.
  • Hope it hits big and that you have the right timing so that you can profit.

Why Future Prediction Doesn’t Work

“You can’t predict, you can prepare.” — Howard Marks

Self-made billionaire, entrepreneur, and investor Howard Marks runs the investment firm Oaktree Capital and has $100 billion under management, making it one of the largest hedge funds in the world. Each year, Marks writes a widely-circulated letter to shareholders. One of these memos gives a masterclass in how investing in future trends isn’t always smart:

  1. The seemingly sure bets will have the most competition, which will make them less profitable. Marks writes: “Most great investments begin in discomfort. The things most people feel good about — investments where the underlying premise is widely accepted, the recent performance has been positive and the outlook is rosy — are unlikely to be available at bargain prices. Rather, bargains are usually found among things that are controversial, that people are pessimistic about, and that have been performing badly of late.”
  2. Luck and randomness are big, unavoidable factors. ”It’s far from certain that even ‘right’ decisions will be successful, since every decision requires assumptions about what the future will look like, and even reasonable assumptions can be thwarted by the world’s randomness,” says Marks. There are certain random events that are so influential that they completely change the game for everyone. Nassim Taleb calls these events “Black Swans.” (A great example is the 2008 financial crisis.)
  3. It’s much harder than you think to be consistently right. “It’s hard to consistently make decisions that correctly factor in all of the relevant facts and considerations (i.e., it’s hard to be right),” Marks notes with humility, a key trait of many of the world’s top-performing investors. Self-made billionaire Ray Dalio, the founder of the largest hedge fund in the world, drives home how hard investing is in the first sentence of his new book: “Before I begin telling you what I think, I want to establish that I’m a ‘dumb shit’ who doesn’t know much relative to what I need to know.”
  4. Even if you get the prediction right, you are likely to get the timing wrong. Marks says: “Even well-founded decisions that eventually turn out to be right are unlikely to do so promptly. This is because not only are future events uncertain, their timing is particularly variable.” And the problem with this is that having the wrong timing is functionally equivalent to making the wrong decision.

Introducing The Trunk Technique

“Predicting rain doesn’t count. Building arks does.” — Warren Buffett

At the heart of the methods used by Buffett, Dalio, Marks, Taleb, and Bezos is a common theme: focus on areas that are virtually guaranteed to be valuable in the future no matter what happens.

Source: New Scientist
  • Build a knowledge tree that lasts forever. Winston Churchill once said: “The farther back you can look, the farther forward you are likely to see.” More recently, this phenomenon has been called the Lindy Effect: “The future life expectancy of some non-perishable things like a technology or an idea is proportional to their current age, so that every additional period of survival implies a longer remaining life expectancy.” The corollary of this for the information age is: “The more you focus on fundamental knowledge, the longer your knowledge tree will last.”
  • Adapt to any future fast and thrive. The nature of fundamental mental models is that they appear across all fields. Therefore, when you go into an emerging field, you’ll enter with a head start, because you’ll immediately see how the principles you already know are relevant.
  • Better understand what’s happening and what it means. Similar to how an expert chess player can see several moves ahead, mental models will allow you to put what’s happening in context so you can react appropriately and think farther ahead.
  • Reduce the risk of investing in an area that turns out to not be a winner. In this article, I’m not suggesting that you ignore the future completely. What I’m saying is that you balance your understanding of trends with what is never going to change: timeless principles and mental models. In his book, Antifragile, Nassim Taleb, a very successful investor rumored to be worth hundreds of millions of dollars, suggests an approach to investing resources that maximizes returns while eliminating losses. He calls it the Barbell Strategy: the idea of building a portfolio of extremes (extremely safe assets + high risk-reward assets) rather than building a big mix with everything in the middle.
Source: Nassim Taleb

Want To Apply The Trunk Technique To Your Life Today?

Are you convinced of the power of Mental Models? I’ve learned from personal experience that it literally takes years to develop true mastery of these. Therefore, I created two resources for you:

Resource #1: Free Mental Model Course (For Newbies)

If you’re just learning about mental models for the first time, my free email course will help you get started. My team and I have spent dozens of hours creating it. It includes the top mental models from many of the world’s top leaders, a guide on how to create a checklist based on the best practices from medicine and aviation so that you use your mental models throughout the day, and a guide that more deeply explains what a mental model is and how to get value from one.

Resource #2: Mental Model Of The Month Club (For Those Who Want Mastery)

If you’re already are convinced of the power of mental models and want to deliberately set about mastering them, then this resource is for you. It’s the program I wish I’d had when I was just getting started with mental models.

  • Every month, you’ll master one new mental model.
  • We’ll focus on the most powerful and universal models first.
  • We’ll provide you with a condensed and simple Mastery Manual (think: Cliff’s Notes) to help you deeply understand the model and integrate it into your life.
  • A 101 Overview of the mental model (why it’s important, how it works, its vocabulary, etc.)
  • An Advanced Overview that includes a more nuanced explanation.
  • Examples of hacks you can use immediately to apply that mental model to every area of your life and career. These hacks are based on my personal experience and are crowdsourced as well.
  • Exercises & templates that you can use on a daily basis to integrate the lessons in the manual and achieve maximum results in your life.
  • A Facebook community where you can meet other mental model collectors and learn from one another.

To learn more about the program or to sign up, visit the Mental Model Of The Month Overview page.



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Rahmat Aprilian P.

Rahmat Aprilian P.


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