Charlie Munger, the vice-chairman of the controversial Berkshire Hathaway and shrewd investor, popularized the mental model of “Circle of Competence” when he said that an investor who steps outside this circle can quickly end up in big trouble. On the other hand, operating within this circle, where the investor has knowledge, expertise and experience, gives them a competitive advantage over others. Simple yet Difficult The mental model of Circle of Competence is so plain and simple that it can be described in just one line: when you don’t know what you’re doing, you are at higher risk than when you know what you’re doing. Interestingly, the human mind