You know the story of the man who wanted to know where he was going to die, so he could make sure not to go there?
That’s a favorite story of Charlie Munger’s to explain the concept of inversion.
Munger credits mathematician Carl Jacobi (who famously said: “Invert, always invert”) who recommended working through math problems in reverse.
As A Margin of Safety wrote in Invert, Always Invert, an example of inversion (working through a problem backwards) came from University of Florida professor Jay Ritter who looked at the problem of whether to invest in Facebook around the time of its IPO. …