CPC Episode #7 - Warren Buffett’s College Prep Strategy: Seek Stupidity to Get Smarter

They say success leaves clues… and this is the driving force behind this weeks episode 7,entitled Warren Buffett’s College Prep Strategy - Seek Stupidity to Get Smarter

1. In order to learn more, I like to study the greats in certain industries. Writing, health, and finance. As I researched finance models to study, I keep coming back to Warren Buffet and his investment partner, Charlie Munger. And as I studied them, I found a powerful tip you can use for college prep exams and college prep planning. And in a moment, I'll share this tip with you. Since learning this tip, I use it in my business and every day life. It's a way to flip things on their head, and help you eradicate mistakes and improve your thought process. And I'll show you how in this episode, you can use the power of two billionaire investors to get better exam scores and help you get into the college of your dreams. 
2. As I studied Interviews with Warren Buffett and Charlie Munger, I kept running into these things called "mental models". It's a way to think about thinking. Mental models give you a lens to view the world as Charlie Munger said. And one mental model which Buffett and Munger mentioned repeatedly is called Inversion.
3. Inversion comes from the German mathematician Jacobi. Jacobi used this method when solving tough math problems. He said, "Invert, always invert." And the interviews with Buffet and Munger talk about the strategy of avoiding mistakes, via the power of inversion. Instead of finding ways to do something right, think about all the ways you could go wrong. Start at the end, assuming you failed. Think about all the ways you'd fail.
4. Munger wrote a letter to shareholders at Wesco, when he was chairman. he said: It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. There must be some wisdom in the folk saying, `It’s the strong swimmers who drown.’
1. In other words, to get smarter, seek stupidity first. Figure out everything that can go wrong. One of the ways you seek stupidity is through arrogance, or thinking you know it all. To remedy this, you ask yourself a two-word question before any project. And I'll get to the question in a moment, but first, I want to show it to you in action... Now, there's a powerful example of arrogance avoidance in the Brad Pitt movie, World War Z. 

10th man Rule

Brad Pitt plays a former United Nations investigator named Gerry Lane. The movie starts off with his family feeling content. Suddenly, the world is plagued by a mysterious infection turning whole human populations into rampaging mindless zombies. After barely escaping the chaos, Lane is persuaded to go on a mission to investigate this disease.

I was watching World War Z last weekend and actually found an interesting college prep lesson against the backdrop of Brad Pitt trying to fend off the zombie apocalypse.

Without giving too much away about the plot, Brad Pitt flies to Israel, where up until the moment in this movie, we see Israel has done a good job of fending off the zombies. And we learn how from the scene I'm about to tell you. It has to do with the 2-word question you always ask for any project. In the scene, there was a Mossad agent trying to explain to Brad Pitt’s character why Israel was far more prepared for a zombie outbreak than the rest of the world. The reason, he cited was called the 10th Man Rule.

He explained that Israel’s security council had 10 advisors that looked into big picture issues. If the first 9 dismissed an issue or potential danger to the country, then the 10th man was forced to overrule them on principle and look into the issue no matter how far-fetched the scenario.

That way Israel would always be prepared for what we know as "black swan" events. Black swan events are rare things, which, if happen, can devastate a project. This 10th man thinking led Israel to building a large wall to help keep out the zombies.

And this scene demonstrates the two word question perfectly..."What if?"

• What if things go wrong?
• What if I'm wrong?
• What if something failed?

Think about any task. You can lose two ways:

1. The task is too difficult or you aren't prepared
2. You make silly errors and beat yourself

Inversion aims to solve Problem 2... and sometimes, part of Problem 1. In the inversion strategy, You aren't so much trying to win as you are trying not to lose.

You'll find a great example of this thinking in the 1975 essay, The Loser’s Game. Charles Ellis calls professional tennis a “Winner’s Game.”  From the essay...

In expert tennis, about 80 per cent of the points are won; in amateur tennis, about 80 per cent of the points are lost. In other words, professional tennis is a Winner’s Game – the final outcome is determined by the activities of the winner – and amateur tennis is a Loser’s Game – the final outcome is determined by the activities of the loser. The two games are, in their fundamental characteristic, not at all the same. They are opposites.

When you tilt your thinking for inversion, instead of asking "How Can I win?" or "How can I solve this problem?" or "How can I do this task?", ask, "How can I not lose?" or "What mistakes could I make to derail this project?"

Let's review some college prep examples using inversion

List out dumb mistakes you'd make on an ACT or SAT exam. 

• Not check work
• Go too fast
• Avoid studying
• Not get enough sleep, so you're exhausted on exam day
• Not eat nourishing foods for your brain and body, so your mind is groggy
• Not learn fundamentals
• Not take practice exams and continually improve your scores in the weeks before the live exam

Speaking of exams, to see this in action, I read a great story about Warren Buffet, who I mentioned earlier. 

Buffett used to convene a group of people called the “Buffett Group.” At one such meeting Benjamin Graham, Warren Buffett’s mentor and teacher, gave them all a quiz. I spent hours searching for this reference, which comes from Benjamin Graham on Value Investing: Lessons from the Dean of Wall Street.

“He gave us a quiz,” Buffett said, “A true-false quiz. And there were all these guys who were very smart. He told us ahead of time that half were true and half were false. There were 20 questions. Most of us got less than 10 right. If we’d marked every one true or every one false, we would have gotten 10 right.”

Graham made up the deceptively simple historical puzzler himself, Buffett explained. “It was to illustrate a point, that the smart fellow kind of rigs the game. It was 1968, when all this phoney accounting was going on. You’d think you could profit from it by riding along on the coattails, but (the quiz) was to illustrate that if you tried to play the other guy’s game, it was not easy to do.

Now, let's use inversion to List out dumb mistakes for college prep

• Wait until the last minute to seek financial aid
• Not look to multiple schools for multiple offers to avoid them competing over you
• Take on extra debt which hurts you in the future
• Not check your Fafsa forms for errors or omissions
• Write a Boring college essay
• Not highlight your individuality, be boring and blend in
• Not research schools
• Not talk to alumni
• Not seek help from people who've succeeded with college prep

Inversion helps you avoid another, deadly two-letter phrase... confirmation bias. Or as I like to call it, Two words you practice to lie to yourself

Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses. 

What you do with confirmation bias is ignore our famous question, "What if?" Confirmation bias hurts you because you don't get the full picture of a project or task. By looking at it from the "What if?" side, you plug holes in your logic and your approach.

Inversion finds what is by excluding what is not. Michaelangelo said it best, when asked how he created the famous Statue of David...

"You just chip away everything that doesn't look like David"

Now I want to help you create your own College Prep, Statue of David. To help you, I've created a resource page just for you, the CPC podcast listener. This page includes a free guide on inversion for college prep, so just like Michaelangelo, you can carve your own college prep statue. To help you master exams, and master college prep without making mistakes which take you out of the game, check out cpcshow.com. That's cpcshow.com. On this page, I've included an inversion checklist for your college prep journey. Why am I doing this? Because I now how much work college prep can be. And if you find value in this inversion guide, maybe you'll chose to work with my team for more college prep help. Once again, this free inversion guide and resource page is at cpcshow.com. Thanks for listening, and see you in the next episode.