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Mental Models · Card 7
Second-Order Thinking
Every move has a sequel.Read it before you act.
- First effect
- Second effect
- Panic-selling stops today's loss
- Locks it in, misses the recovery
Ask not just what happens next, but what happens after that; the consequence of the consequence.
Action
Effect
Effect of that effect
In Practice
Selling in a panic stops today's loss. But it also locks in that loss and often means missing the recovery; the effect of the effect.
Generic Example
Skipping a workout today feels like more free time. A month of skipped workouts becomes a habit that's hard to restart.
Ask yourself
If this works exactly as planned, what happens next; and what happens after that?