“All I want to know is where I’m going to die, so I’ll never go there.”
— CHARLIE MUNGER
The above quote from Charlie Munger demonstrates the power of inversion.
What’s one way to get more of the thing you want? Avoid the thing that will destroy the item you want. To get more life, avoid death. To get better, avoid the bad. This is inversion.
Inversion is a problem-solving technique where you think about things backward.
Instead of asking how to do something, you ask how not to do it.
Here are some examples:
·Business:How can we alienate our core customers?
·Career:What kind of work do I hate?
·Health:How can I sleep worse?
·Productivity:How can I procrastinate more?
·Relationships:How can I ruin my marriage?
Inversion won’t always solve your problems, but it will help you avoid costly mistakes.
And that will move you closer to the solution.
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So, whenever the best path forward isn’t clear, flip the problem on its head.
Instead of looking for the right path, could you know which ones to avoid?
Inversion comes originally from algebra, where an equation is often easier to solve if you invert it. But it also works for non-math problems.
If you have a long stock position, it would be wise to invert your argument and ask how this investment could fail. What are the scenarios that would cause the intrinsic value of the company to decline permanently?
For a business or creative project, it’s asking what would prevent people from buying your product, listening to your podcast, or subscribing to your newsletter.
The more you understand what will cause you to fail, the better armed you are to make decisions that avoid those mistakes.
Warren Buffett is famous for watching the downside of his investments. His two rules for investing read:
“Rule number one: don’t lose money. Rule number two: don’t forget rule number one.”
He’s inverting the problem. If he can avoid losing money, he’s bound to make some.
Inverting is not the same thing as “being negative.” Your emotions should not play a role when you are inverting your best ideas. You are using logic and facts to conclude what decisions should be made. That’s all. There is nothing emotional about it.
If you have inverted the idea and have a probabilistic point of view of the outcomes, you can make the call to either take up or abandon your idea.
If you pursue, that is a victory.
If you abandon it, that is also a victory.
