Munger states this as close to a guaranteed prediction as exists: “If you play games where other people have the aptitudes and you don’t, you’re going to lose.” Every person has a circle of competence — partly innate, partly built through work — and “it’s going to be very hard to enlarge that circle.” Even Munger and Buffett acknowledge their limits: “Warren and I don’t feel like we have any great advantage in the high-tech sector. In fact, we feel like we’re at a big disadvantage in trying to understand the nature of technical developments in software, computer chips, or what have you. So we tend to avoid that stuff, based on our personal inadequacies.”
The practical implication is not pessimistic but focusing: “If you want to become the best plumbing contractor in Bemidji, that is probably doable by two-thirds of you. It takes a will. It takes the intelligence. But after a while, you’d gradually know all about the plumbing business in Bemidji and master the art.” The game of life for most people is developing a circle of competence through disciplined work, not trying to win the world’s chess tournaments. This connects to Excessive self-regard makes fixable failures persist — people excuse poor performance instead of correcting it — one of the main reasons people play outside their circle is Excessive Self-Regard Tendency, which makes them overestimate their abilities in unfamiliar domains. It also connects to A latticework of mental models beats isolated facts for real understanding — the latticework helps you recognize the boundaries of your competence by showing where your models run thin.