Multiple Disciplines

In futhering my mental models in the spirit of Charlie Munger I've been reading pretty much non-stop on economics over the past month or two.

Last night I started a new book, Discover Your Inner Economistby blogger Tyler Cowen.

In the first chapter of the book Cowen talks about how to distinguish good economics from bad:

1. The Postcard Test: In this test he recommends never buying a theory where it cannot be explained on the back of a postcard. Theories which are too complex and need to be explained on a 46-page paper then it probably has too many uncertain steps
2. The Grandma Test: Before teling anyone your economic theory make sure it is intelligible enough to explain to your grandmother
3. The Aha Test: If the theory is explained well it should make sense and the listener should experience an 'aha' moment of comprehension.

One could do well translating these rules to investing. They do not sound very far off from superinvestors such as Peter Lynch and Mohnish Pabrai who have rules of a two-minute drill which means one must be able to explain the thesis in two minutes and a rule of being able to explain the business in a paragraph respectively.