I first learned about the concept of a memory palace (aka the Method of loci) in depth from the bookMoonwalking with Einstein: The Art and Science of Remembering Everything by Joshua Foer. As described on Wikipedia:
The Method of loci (plural of Latin locus for place or location), also called the memory palace, is a mnemonic device introduced in ancient Roman and Greek rhetorical treatises (in the anonymous Rhetorica ad Herennium, Cicero's De Oratore, and Quintilian's Institutio Oratoria). In basic terms, it is a method of memory enhancement which uses visualization to organize and recall information. Many memory contest champions claim to use this technique to recall faces, digits, and lists of words. These champions’ successes have little to do with brain structure or intelligence, but more to do with their technique of using regions of their brain that have to do with spatial learning.
The basic idea is that the human brain is better at remembering images and spatial information than it is words or numbers. If you want to remember someone’s name, for example, it is easier to remember it if you associate it with an image, and the more vivid the image, the easy it will be to remember. The memory palace is a familiar place to you (such as: a house you know well) that you can walk through in your mind, and place vivid images (such as: moonwalking with Albert Einstein) at certain points in that place (such as: at the top of the stairs) to help you remember things. As Joshua Foer described the “art” of memory:
The "art of memory" refers to a set of techniques that were invented in ancient Greece. These are the same techniques that Cicero used to memorize his speeches, and that medieval scholars used to memorize entire books. The "art" is in creating imagery in your mind that is so unusual, so colorful, so unlike anything you've ever seen before that it's unlikely to be forgotten. That's why mnemonists like to say that their skills are as much about creativity as memory.
As I was going through Foer’s book, I started to think of ways I could use the concept of a memory palace in a practical way in life and how I could incorporate it into my investing process. I was then inspired by a few quotes from Warren Buffett (Trades, Portfolio): 1) "We don't have to be smarter than the rest. We have to be more disciplined than the rest."; 2) "Charlie and I have a number of filters that things have to get through before we'll think about them."; and 3) "Yeah, we don't consider many stupid things. I mean, we get rid of 'em fast...Just getting rid of the nonsense -- just figuring out that if people call you and say, 'I've got this great, wonderful idea', you don't spend 10 minutes once you know in the first sentence that it isn't a great, wonderful idea...Don't be polite and go through the whole process."
What I thought I could do was create a process using a memory palace to make it both easy for me to filter things, and easy for me to always keep the most fundamental ideas at the top of my mind, both as it relates to an investing philosophy and a philosophy of life in general. I had experimented with meditation a bit, but sitting for 15-20 minutes just focusing on my breath didn't seem like something I really wanted to do every day, though I think it is useful and I may get there one day. But when the memory palace idea came along, I realized I could take the most important things I wanted to remember, create a memory palace, and use that to replace daily meditation or incorporate in addition to a daily meditation.
So that's what I did. I created a memory palace for the main investing filters I wanted to remember, such as filters for management, circle of competence, balance sheets, the intersection of business quality and price, etc. I also incorporated a number of mistakes and examples into it to help me see a real world application or lesson from those things. I then created reminders for life lessons as well, just to make sure I always had the most important things on my mind, and so that I would routinely reflect on them.
Initially, I would go through the whole memory palace just about every day, but as it got longer and as I was able to practice and improve the vividness of the images, I’ve found I only need to go through the whole thing in one sitting every week or two. And I can then just memortate on an abridged version on a daily basis of the things that I think are most important.
Recently, I’ve also begun to create a memory palace for all of Charlie Munger (Trades, Portfolio)’s misjudgments in his speech “The Psychology of Human Misjudgment” from Poor Charlie’s Almanack. Given the importance of psychology to investing and to life, and given the effort Munger took to rewrite that speech for the book from when he initially gave it to make it really showcase how he views the important models from psychology, it seemed to be a useful undertaking, and one I’m enjoying as I’m going through it.
I’m still early in the process of all of this and I as I get further and further along, I hope to share more thoughts along the way. But as I think some of the above might be useful to others, I felt it was a good idea to share some initial experiences now.