1. Three-Basket Screen
   ├─ Can I understand this business deeply?
   │  ├─ NO → Reject immediately (pharmaceuticals, complex tech)
   │  ├─ TOO COMPLEX → Reject immediately 
   │  └─ YES → Continue to step 2
   │
2. Competitive Moat Assessment
   ├─ Does it have durable competitive advantages?
   │  ├─ Brand strength → Assess psychological lock-in
   │  ├─ Scale economies → Calculate cost advantage
   │  ├─ Network effects → Evaluate switching costs
   │  ├─ Regulatory protection → Check durability
   │  └─ NO MOAT → Reject (commodity business)
   │
3. Business Quality Check
   ├─ Will productivity improvements stay with owners or flow to customers?
   │  ├─ FLOW TO CUSTOMERS → Reject (textile trap)
   │  └─ STAY WITH OWNERS → Continue
   │
4. Intrinsic Value vs. Market Price
   ├─ Calculate free cash flow (not reported earnings)
   ├─ Assess whole business value
   ├─ Does intrinsic value significantly exceed price?
   │  ├─ NO → Wait (no margin of safety)
   │  └─ YES → Continue to step 5
   │
5. Psychological Checklist
   ├─ Am I being influenced by incentive-caused bias?
   ├─ Is social proof driving my judgment?
   ├─ Am I victim of consistency principle (defending past decision)?
   ├─ Could lollapalooza effect (multiple forces) be creating misjudgment?
   │  └─ ANY YES → Re-evaluate objectively
   │
6. Opportunity Cost Comparison
   ├─ Is this the best use of capital vs. alternatives?
   │  ├─ NO → Wait for better opportunity
   │  └─ YES → Continue to step 7
   │
7. Action Decision
   └─ Do ALL factors align perfectly?
      ├─ NO → Do nothing (sit on ass)
      └─ YES → Commit large percentage of capital, hold with zero turnover

1. Identify Big Ideas from Major Disciplines
   ├─ Psychology: cognitive biases, operant conditioning, social proof
   ├─ Economics: competitive advantage, incentives, supply/demand
   ├─ Mathematics: probability, compound interest, permutations
   ├─ Physics: critical mass, equilibrium, relativity
   ├─ Biology: evolution, ecosystem niches, complex systems
   └─ Master 80-90 core models (carry 90% of freight)
   
2. For Each Problem, Apply Multiple Models
   ├─ What does psychology say?
   ├─ What does economics say?
   ├─ What does mathematics say?
   ├─ What does physics say?
   └─ Where do models reinforce? (lollapalooza check)
   
3. Inversion Check
   ├─ Think forward: What creates success?
   ├─ Think backward: What guarantees failure?
   └─ Synthesize insights from both directions
   
4. Disconfirming Evidence Search
   ├─ What would prove this wrong?
   ├─ Am I protecting cherished beliefs?
   └─ Darwin method: spend time trying to disprove own theory

Before any major decision:
☐ Have I applied models from multiple disciplines?
☐ Have I thought this through backward (inversion)?
☐ Am I within my circle of competence?
☐ Have I checked for incentive-caused bias?
☐ Have I sought disconfirming evidence?
☐ Could psychological forces be creating lollapalooza effect?
☐ What's the opportunity cost?
☐ Have I identified what could go wrong?
☐ Is this a one-foot fence with big reward, not seven-foot fence?
☐ Can I wait for better circumstances if anything is uncertain?