mental model Archives - New Trader U

Overconfidence Bias: Concepts Unwrapped

Overconfidence bias is a widespread cognitive tendency where people overestimate their talents, abilities, and likelihood of being right. This distorted self-perception leads to faulty judgments, poor decisions, and disappointing outcomes when confidence exceeds competence. This article will unravel the concepts around overconfidence bias, its psychological underpinnings, its effects on judgment and decision-making, and strategies to […]

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Warren Buffett On The Circle Of Competence Mental Model

Warren Buffett / Steve Burns

Navigating the investing world can often feel like trying to find your way through a dense forest without a compass. Amid the abundance of advice and strategies, one stands out for its simplicity and effectiveness: Warren Buffett’s Circle of Competence mental model. This principle, used by one of the most successful investors in history, emphasizes

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3 Cognitive Biases That Are Making You Poor and Unhealthy: How To Overcome Them

Success / Steve Burns

You’re often making choices, aren’t you? Choices that seem reasonably beneficial sometimes lead to unfavorable outcomes. It’s puzzling, this human propensity to pick paths that aren’t optimal. Why are so many of your thoughts self-defeating? More often than not, cognitive biases and subtle mental frameworks you’re programmed to use skew decision-making, guiding you into pitfalls

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The Most Powerful Mental Model: Inversion

Success / Steve Burns

Ever think about how you make decisions? We’re all guided by mental models, unseen frameworks that shape our thought processes. In this blog post, I’ll introduce you to a useful one – Inversion. A powerhouse of a mental model, it’s like flipping your perspective upside down and viewing the world from a completely different angle.

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The Most Common Cognitive Bias

Psychology / Steve Burns

The most common cognitive bias is to first believe something and then filter all new information through that mental framework. Beliefs can change the way we filter new information, trying to make it fit into what we already believe to be true. This can lead people to distort facts, ignoring what doesn’t make sense to

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Creating A Regret Minimization Framework

Mental Models, Self Help / Steve Burns

Mental models are used as frameworks and filters and a way to think about the world and make the right decisions based on principles. Mental models are not always correct but they can raise your probability of having success with how you think and the decisions you make based on robust principles. Jeff Bezos used

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Mental Models Cheat Sheet

Mental Models / Steve Burns

Mental models are tools used to explain the process and theory a person uses to understand how something works in the real world. It represents a system of principles that tries to explain the interrelated cause and effect of actions and results. A mental model represents the relation between intuition and reality and beliefs about

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