Munger Charlie Quotes

In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time -- none, zero. You'd be amazed at how much Warren reads--and at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out.

Spend each day trying to be a little wiser than you were when you woke up. Day by day, and at the end of the day-if you live long enough-like most people, you will get out of life what you deserve.

How to find a good spouse? -the best single way is to deserve a good spouse.

We both (Charlie Munger and Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.

There is no better teacher than history in determining the future... There are answers worth billions of dollars in 30$ history book.

Acquire worldly wisdom and adjust your behavior accordingly. If your new behavior gives you a little temporary unpopularity with your peer group…then to hell with them.

It takes character to sit with all that cash and to do nothing. I didn't get top where I am by going after mediocre opportunities.

Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.

What are the secret of success? -one word answer :"rational

I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.

Remember that reputation and integrity are your most valuable assets—and can be lost in a heartbeat.

Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain and no fun. Why would you want to get on that trolley?

Go to bed smarter than when you woke up.

I never allow myself to hold an opinion on anything that I don't know the other side's argument better than they do

The iron rule of nature is: you get what you reward for. If you want ants to come, you put sugar on the floor.

The best armour of old age is a well spent life perfecting it.

If something is too hard, we move on to something else. What could be simpler than that?

Mimicking the herd invites regression to the mean (merely average performance).

I think that, every time you see the word EBITDA, you should substitute the words "bullshit earnings.

The best armour of old age is a well spent life preceding it.

It's the work on your desk. Do well with what you already have and more will come in.

Buffett found it 'extraordinary' that academics studied such things. They studied what was measurable, rather than what was meaningful. 'As a friend [Charlie Munger] said, to a man with a hammer, everything looks like a nail.

In my whole life, I have known no wise people (over a board subject matter area) who didn't read all the time - none, zero. You'd be amazed how much Warren reads - and at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out.

Warren Buffett is one of the best learning machines on this earth. The turtles which outrun the hares are learning machines. If you stop learning in this world, the world rushes right by you.

Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world

As long as I have a book in my hand, I don’t feel like I’m wasting time.” —Charlie Munger

Learning from the success and failure of others is the fastest way to get smarter and wiser without a lot of pain.

We both insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. So Warren and I do more reading and thinking and less doing than most people in business.

On the Ideal Business - Buffett: “Something that costs a penny, sells for a dollar and is habit forming.

Warren talks about these discounted cash flows. I’ve never seen him do one.

Buffett and his partner, Charlie Munger, realized that as customers form routines around a product, they come to depend upon it and become less sensitive to price.

Man’s imperfect, limited-capacity brain easily drifts into working with what’s easily available to it. And the brain can’t use what it can’t remember or when it’s blocked from recognizing because it’s heavily influenced by one or more psychological tendencies bearing strongly on it … the deep structure of the human mind requires that the way to full scope competency of virtually any kind is to learn it all to fluency—like it or not.

The reason we avoid the word "synergy" is because people generally claim more synergistic benefits than will come. Yes, it exists, but there are so many false promises. Berkshire is full of synergies - we don't avoid synergies, just claims of synergies.

In Buffett’s view, if you cannot write it down, you have not thought it through.

the acquisition of wisdom is a moral duty.

It is remarkable how much long-term advantage we have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.

If investors only had to study the past, the richest people would be librarians.

Buffett has said that if you cannot explain why you failed after you have made a mistake, the business was too complex for you.

Stay within a well-defined circle of competence.

Show me the incentive and I'll show you the outcome.

Good ideas are rare—when the odds are greatly in your favor, bet (allocate) heavily.

After you have enough for daily life, all that matters is your health and those you love.

Above all, never fool yourself, and remember that you are the easiest person to fool.

Resist the craving for false precision, false certainties, etc.

Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake.

It's not the bad ideas that do you in, it’s the good ideas. And you may say, 'That can't be so. That's paradoxical. What he [Graham] meant was that if a thing is a bad idea, it’s hard to overdo. But where there is a good idea with a core of essential and important truth, you can’t ignore it. And then it's so easy to overdo it. So the good ideas are a wonderful way to suffer terribly if you overdo them

People are trying to be smart—all I am trying to do is not to be idiotic, but it’s harder than most people think.

The right manager can have an absolutely huge impact. Find people with brains, energy and integrity,

I observe what works and what doesn’t and why.

The safest way to get what you want is to deserve what you want.

Opportunity doesn’t come often, so seize it when it does. Opportunity meeting the prepared mind—that’s the game.

No man’s life should be accounted a happy one until it is over.

Well, luckily I had the idea at a very early age that the safest way to try to get what you want is to try to deserve what you want.

Remember that just because other people agree or disagree with you doesn’t make you right or wrong—the only thing that matters is the correctness of your analysis and judgment.

It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” – Charlie Munger

Yet the industry asks for more money from investors every year. The idea is to find investments that give you money, not take it.

One of Buffett’s annual themes is the value of learning. He noted that life properly lived is learning, learning, learning all the time. He observed that being wrong is when he learns the most.

In the 54 years (Charlie Munger and I) have worked together, we have never forgone an attractive purchase because of the macro or political environment, or the views of other people. In fact, these subjects never come up when we make decisions.

Buffett's methodology was straightforward, and in that sense 'simple.' It was not simple in the sense of being easy to execute. Valuing companies such as Coca-Cola took a wisdom forged by years of experience; even then, there was a highly subjective element. A Berkshire stockholder once complained that there were no more franchises like Coca-Cola left. Munger tartly rebuked him. 'Why should it be easy to do something that, if done well two or three times, will make your family rich for life?

If you want to get rich, you’ll need a few decent ideas where you really know what you’re doing. Then you’ve got to have the courage to stick with them and take the ups and downs. Not very complicated, and it’s very old-fashioned.

The danger of relying on historical statistics or formulas is that you end up betting on a 14-year-old horse with a great record but is now ready for the glue factory.

Value is what a business is worth. Price is what you have to pay to get it.

Take a simple idea and take it seriously.

You don't have to pee on an electric fence to learn not to do it

Munger likes to say that a year in which you do not change your mind on some big idea that is important to you is a wasted year.

All skills attenuate with disuse.

people who cannot be alone with their own thoughts are terrible candidates to become successful investors.

Munger claimed that it is because professors are so enamored by modern portfolio theory. For the man with a hammer, every problem looks like a nail.

The secret of happiness is to lower your expectations.

Ben Franklin’s advice: “Keep your eyes wide open before marriage and half shut thereafter.

You need to have a passionate interest in why things are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don't have the cast of mind, you're destined for failure even if you have a high I.Q.

I want to think about things where I have an advantage over others. I don't want to play a game where people have an advantage over me. I don't play in a game where other people are wise and I am stupid. I look for a game where I am wise, and they are stupid. And believe me, it works better. God bless our stupid competitors. They make us rich.

Buffett gave two criteria for evaluating the performance of management: 1) How well do they run the business? and 2) How well do they treat the owners?

Tom Murphy, CEO of Capital Cities/ABC and considered by Buffett to be the best business manager in the country, prays every day to be humble.

Buffett continued, saying that MPT has no utility. It is elaborate with lots of little Greek letters to make you feel you are in the big leagues. The

Buffett pointed out that when the investment tide goes out, you will see who has been swimming naked.

If all you succeed in doing in life is getting rich by buying little pieces of paper, it’s a failed life. Life is more than being shrewd in wealth accumulation. —Charlie Munger

Of taking your work very seriously, but never yourself.

not drifting into extreme ideology is very, very important in life. If you want to end up wise, heavy ideology is very likely to prevent that outcome.

Too much competency and no gumption is no good.

Three things ruin people: drugs, liquor, and leverage.

Munger noted that high profits on capital often rely on information inefficiencies.

I think track records are very important. If you start early trying to have a perfect one in some simple thing like honesty, you're well on your way to success in the world.

I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy that help, particularly when you have a long run ahead of you.

Whenever you think that some situation or some person is ruining your life, it’s actually you who are ruining your life. It’s such a simple idea. Feeling like a victim is a perfectly disastrous way to make go through life. If you just take the attitude that however bad it is in anyway, it’s always your fault and you just fix it as best you can – the so-called “iron prescription

All the equity investors, in total, will surely bear a performance disadvantage per annum equal to the total croupiers’ costs they have jointly elected to bear. This is an inescapable fact of life. And it is also inescapable that exactly half of the investors will get a result below the median result after the croupiers’ take, which median result may well be somewhere between unexciting and lousy.

There are essentially five things public corporations can do with a dollar earned: reinvest in the business, acquire other businesses or assets, pay down debt, pay dividends, and/or buy in shares. Deciding

And the models have to come from multiple disciplines—because all the wisdom of the world is not to be found in one little academic department. That’s why poetry professors, by and large, are so unwise in a worldly sense. They don’t have enough models in their heads. So you’ve got to have models across a fair array of disciplines.

The best antidote to folly from an excess of self-regard is to force yourself to be more objective when you are thinking about yourself, your family and friends, your property, and the value of your past and future activity.

Buffett also noted that book value is seldom meaningful in analyzing the value of a business. Book value simply records what was put into the business. The key to calculating value is determining what will come out of the business.

Charlie Munger gave me a great quotation on this subject, from Demosthenes: “Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.” The belief that some fundamental limiter is no longer valid—and thus historic notions of fair value no longer matter—is invariably at the core of every bubble and consequent crash. In fiction, willing suspension of disbelief adds to our enjoyment.

I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you

Successful investors … must possess an interest in the process. It’s no different from carpentry, gardening, or parenting. If money management is not enjoyable, then a lousy job inevitably results, and, unfortunately, most people enjoy finance about as much as they do root canal work.

Yeah, I’m passionate about wisdom. I’m passionate about accuracy and some kinds of curiosity. Perhaps I have some streak of generosity in my nature and a desire to serve values that transcend my brief life. But maybe I’m just here to show off. Who knows? I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.

to avoid what he calls physics envy, the common human craving to reduce enormously complex systems (such as those in economics) to one-size-fits-all Newtonian formulas. Instead, he faithfully honors Albert Einstein’s admonition: “A scientific theory should be as simple as possible, but no simpler.

The quotes, talks, and speeches presented here are rooted in the old-fashioned Midwestern values for which Charlie has become known: lifelong learning, intellectual curiosity, sobriety, avoidance of envy and resentment, reliability, learning from the mistakes of others, perseverance, objectivity, willingness to test one’s own beliefs, and many more. But his advice comes not in the form of stentorian admonishments; instead, Charlie uses humor, inversions (following the directive of the great algebraist [Carl] Jacobi to “invert, always invert”), and paradox to provide sage counsel about life’s toughest challenges.

occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. And the market aberrations produced by them will be equally unpredictable, both as to duration and degree. Therefore, we never try to anticipate the arrival or departure of either disease. Our goal is more modest: we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. As

A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.

18 NEVER PAY YOUR LAWYER BY THE HOUR Incentive Super-Response Tendency To control a rat infestation, French colonial rulers in Hanoi in the nineteenth century passed a law: for every dead rat handed in to the authorities, the catcher would receive a reward. Yes, many rats were destroyed, but many were also bred specially for this purpose. In 1947, when the Dead Sea scrolls were discovered, archaeologists set a finder’s fee for each new parchment. Instead of lots of extra scrolls being found, they were simply torn apart to increase the reward. Similarly, in China in the nineteenth century, an incentive was offered for finding dinosaur bones. Farmers located a few on their land, broke them into pieces and cashed in. Modern incentives are no better: company boards promise bonuses for achieved targets. And what happens? Managers invest more energy in trying to lower the targets than in growing the business. These are examples of the incentive super-response tendency. Credited to Charlie Munger, this titanic name describes a rather trivial observation: people respond to incentives by doing what is in their best interests. What is noteworthy is, first, how quickly and radically people’s behaviour changes when incentives come into play or are altered and, second, the fact that people respond to the incentives themselves and not the grander intentions behind them.

Everyone makes mistakes, but Munger has repeatedly said that staying away from the really big mistakes, like cocaine and heroin, is vital. As an analogy, Munger has pointed out that if you are floating down a river and there are really dangerous whirlpools that are killing many people on a daily basis, you do not go anywhere near that whirlpool. Munger also pointed to alcoholism as a major cause of failure in life. His point on substance abuse is simple: why play dice with something that can ruin your life forever? His timeless advice in every setting is to avoid situations with a massive downside and a small upside (negative optionality).