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The Latticework for 2026

As we step into 2026, the world feels faster than ever. AI agents are negotiating contracts, humanoid robots are entering domestic trials, and the financial markets are dancing to the tune of algorithms we barely understand. In times of such rapid acceleration, the best strategy is often to slow down and revisit the immutable laws of human nature.

There is no better guide for this than the late Charlie Munger.

While the technology changes, the “software” running in our brains—the psychology of human misjudgment—remains the same. I recently revisited two of his most iconic talks: The Psychology of Human Misjudgment and his USC Commencement Address. Here are the profound principles that are worth anchoring to this year.

USC Commencement Address now

The Psychology of Human Misjudgment

1. Invert, Always Invert

“Tell me where I’m going to die, so I’ll never go there.”

Munger’s favorite algebraic trick was inversion. Instead of trying to be brilliant, try to avoid being stupid. It is much easier to identify what causes failure than to identify what guarantees success.

By systematically eliminating the obvious paths to ruin, you automatically improve your odds of survival. And in compounding, survival is the only thing that matters.

2. The Iron Rule of Incentives

“I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it.”

If you want to understand why a CEO is pushing a specific narrative or why a politician is voting a certain way, look at the incentives. The “Reward and Punishment Superresponse Tendency” drives behavior more than logic or morality.

In the age of Agentic AI, this is critical. What is the incentive function of the model you are using? Is it optimized for accuracy, engagement, or ad revenue? Understanding the hidden incentives of our tools is the new literacy.

3. Reliability and the “Seamless Web” of Trust

In his USC address, Munger emphasized a simple virtue: Reliability.

“If you’re unreliable, it doesn’t matter what your virtues are. You’re going to crater immediately.”

He spoke of a “seamless web of deserved trust.” If you want to be trusted, you must be trustworthy. It sounds quaint, but in a digital economy flooded with deepfakes and automated spam, human reliability is becoming a scarce, premium asset. Being the person who actually does what they say they will do is a massive competitive advantage.

4. Avoiding “Intense Ideology”

Munger warned that intense ideology “cabbages up one’s mind.” When you adopt a rigid identity—political, religious, or economic—you stop thinking. You start filtering facts to fit your conclusion (Consistency and Commitment Tendency).

The Challenge: Can you argue the opposite side of your most cherished belief better than the other side can? If not, Munger would say you have no right to hold an opinion.

  • If you are a crypto-skeptic, can you articulate the bull case for decentralized finance?
  • If you are an AI-optimist, can you rigorously detail the deflationary collapse scenario?

5. The Antidote to Self-Pity

Life will have terrible blows. Unfair blows. Munger’s prescription was Stoic and brutal:

“Self-pity is a golden ticket to misery. It does no good.”

When you face a setback this year—a bad trade, a missed promotion, a health scare—remember that feeling sorry for yourself is a standard psychological response, but it is also a useless one. The only rational response is to accept the new reality and maximize the outcome from that point forward.

Final Thought

The most dangerous person in the room is not the one with the newest data, but the one with the oldest principles. Technology changes the “how,” but human nature dictates the “why.”

Make 2026 the year you build your latticework of mental models.

Cheers 🥂