The theory of breaking point is the ninth mode of thinking in our study.
The breaking point theory is about the interaction between cities and regions. It was developed by P.D. converse from W.J. Reilly's Law of Retail Gravity in 1949. According to this theory, the attraction of a city to its surrounding areas is directly proportional to its size and inversely proportional to the square of its distance. Therefore, the formula of the dividing point (i.e. the breaking point) of the affected areas of the two cities is as follows. Where dA is the distance from the fault point to a city; DAB is the distance between a and b cities.
Breaking point theory is based on urban and regional theory. According to the mathematical formula of this theory, we can easily make decisions on related regional research, urban layout and urban construction. So what is the guiding significance for our personal daily life and work?
When Charles Munger mentioned the breaking point theory, my understanding should be more in the investment field, especially in the stock market. The breaking point theory can be regarded as the influence of price on demand. The price fluctuation of products or stocks will affect the purchase demand. When the price changes to the breaking point, the buyers will greatly increase or decrease. For example, when the price of a stock falls from 20 yuan to 15 yuan, the price change does not cause much fluctuation to the demand, but when the price falls below 10 yuan, it will cause a lot of buying. In product trading, we can use the price breaking point curve to calculate the optimal pricing, so as to obtain the maximum profit.
There are "retail gravity law", "price breaking point theory" and "critical point theory" related to the breaking point theory, all of which are extreme problems of qualitative change caused by quantitative change, and the results before and after the extreme value are completely different. Analogy house price is the price pole of bubble bursting; Simulated retail is the extreme value of product pricing and sales forecast; The analogy of life is to do one thing. From the process point of view, if the accumulation does not reach the breaking point, there will be no obvious change from the result.
The breaking point mentioned in the breaking point theory can be calculated by the mathematical formula proposed by Convis in the interaction between cities and regions. As for stock investment, there is a similar breaking point, but it is difficult to calculate by mathematical formula, or it is difficult to calculate the learning and growth process of individuals from quantitative change to qualitative change through continuous accumulation. Li Xiaolai emphasized in Taking Time as a Friend that growth is actually a process of continuous accumulation. His new book "Freshness-Seven Years is a Life" clearly states that growth can be quantified, and the process of growth can be quantified by constantly polishing concepts. However, different people have different understandings and understandings of growth. The same study and hard work can't produce exactly the same result in different people, which is why we can't calculate it by mathematical formula. However, we believe that there must be a "breaking point" in the continuous accumulation of growth, and this breaking point of growth cannot be accurately calculated by mathematical formula.
I remember an old saying, try as many possibilities as possible before the age of 30, don't care too much about salary, and find what you are most interested in and good at. After the age of 30, you may earn back the salary of the previous ten years in one year. If this state can be achieved, this 30-year-old is a breakthrough point in personal growth. Of course, there will be many breakpoints in later life.
I personally understand that the function of breaking point theory is to leap or cliff after a certain accumulation, and where there is the same analogy as discontinuity, our ordinary people's thinking is continuous. How to realize jumping and discontinuous thinking is a key factor that can be highlighted.
In the process of polishing the thinking model, we must first understand the original origin, significance and use of the thinking model, and then enlarge and apply it to our work and life according to this thinking mode. How does it help us to think more comprehensively? So is the theory of breaking point. We should understand that the change of things is not linear, but will become discontinuous and broken after reaching a certain link. Thinking and judging through these related models can make us more rational and comprehensive.
I found two practical research documents based on the breaking point theory on the Internet, mainly based on the application and research of cities and geography, which is helpful to understand this theory.
Research on Logistics Radiation Range of cross-border electronic commerce Import Pilot City Based on Breaking Point Theory
/zhongguoshichang/20 1722/29739392 . html
Research on Support Scope of Rear Oil Depot Based on Breakpoint Theory
/wlkj/20 1 10 1/ 13455824 . html
Note: Some texts in this article are taken from Baidu Encyclopedia and Zhihu.