Charlie Munger Quotes
372 Charlie Munger Quotes
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[In 2005] I’ll be amazed if we don’t have some kind of significant [derivatives related] blowup in the next five to ten years.
Charlie Munger
I am one of the few people in America who constantly prays that Bill Gates achieves more success. I figure we former nerds have to stick together.
Charlie Munger
You must know the big ideas in the big disciplines and use them routinely – all of them, not just a few. Most people are trained in one model – economics, for example – and try to solve all problems in one way. You know the saying: ‘To the man with a hammer, the world looks like a nail.’ This is a dumb way of handling problems.
Charlie Munger
Organised common (or uncommon) sense – very basic knowledge is an enormously powerful tool. There are huge dangers with computers. People calculate too much and think too little. Part of [having uncommon sense] is being able to tune out folly, as opposed to recognising wisdom. If you bat away many things, you don’t clutter yourself.
Charlie Munger
We read a lot. I don’t know anyone who’s wise who doesn’t read a lot. But that’s not enough: You have a to have a temperament to grab ideas and do sensible things. Most people don’t grab the right ideas or don’t know what to do with them.
Charlie Munger
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. A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage etc. Just avoid things like AIDS situations, racing trains to the crossing, and doing cocaine. Develop good mental habits. Avoid evil, particularly if they’re attractive members of the opposite sex.
Charlie Munger
Be satisfied with what you have. [IE – Someone will always be getting richer faster than you.]
Charlie Munger
The idea of caring is that someone is making money faster [than you are] is one of the deadly sins. 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?
Charlie Munger
[A young shareholder asked Charlie how to follow in his footsteps, and Charlie brought down the house by saying.] We get these questions a lot from the enterprising young. It’s a very intelligent question: You look at some old guy who’s rich and you ask, ‘How can I become like you, except faster?’ Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts… slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.
Charlie Munger
The best way to get a good spouse is to deserve a good spouse.
Charlie Munger
I have always imagined that Paradise will be a kind of library.
Charlie Munger
I always like it when someone attractive to me agrees with me, so I have fond memories of Phil Fisher.
Charlie Munger
I think the people who are attracted to be prison guards are not natures noble men to begin with.
Charlie Munger
Einstein said his successful theories came from curiosity, concentration, perseverance, and self-criticism.
Charlie Munger
If you don’t get elementary probability into your repertoire you go through a long life life a one-legged man in an ass-kicking contest.
Charlie Munger
His [Carl Braun at C. F. Braun Company] rule for all the Braun Company’s communication was called the Five W’s, you had to tell who was going to do what, where, when and why. And if you wrote a letter or directive in the Braun Company telling somebody to do something, and you didn’t tell him why, you could get fired. In fact, you would get fired if you did it twice. You might ask why is that so important? Well, again that’s a rule of psychology. Just as you think better if you array knowledge on a bunch of models that are basically answers to the question why, why, why, if you always tell people why, they’ll understand it better., they’ll consider it more important, and they’ll be more likely to comply. Even it they don’t understand your reason, they’ll be more likely to comply.
Charlie Munger
For example, for a big company, General Electric has fought bureaucracy with amazing skill. But that’s because they have a combination of a genius and a fanatic running it. And they put him in young enough so he gets a long run. Of course, that’s Jack Welch.
Charlie Munger
The net amount of money that’s been made by the shareholders of airlines since Kitty Hawk is now a negative figure.
Charlie Munger
You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence.
Charlie Munger
You have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose.
Charlie Munger
It’s not given to human beings to have such talent that they can just know everything about everything. But it is given to human beings who work hard at it – who look and sift the world for a mispriced bet – that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t. It’s just that simple. That is a very simple concept. And to me it’s obviously right based on experience not only from the pari-mutual system, but everywhere else. And yet in investment management, practically nobody operates that way. We operate that way – I’m talking about Buffett and Munger. And we’re not alone in the world. But a huge majority of people have some other crazy construct in their heads. And instead of waiting for a near cinch and loading up, they apparently ascribe to the theory that if they work a little harder or hire more business school students, they’ll come to know everything about everything all of the time. To me, that’s totally insane. How many insights do you need? Well, I’d argue that you don’t need many in a lifetime. If you look at Berkshire Hathaway and all of it’s accumulated billions, the top ten insights account for most of it. And that’s with a very brilliant man – Warren’s a lot more able than I am and very disciplined – devoting his lifetime to it. I don’t mean to say that he’s only had ten insights. I’m just saying that most of the money came from ten insights.
Charlie Munger
When Warren lectures at business schools, he says ‘I could improve your ultimate financial welfare by giving you a ticket with only twenty slots in it so that you had twenty punches – representing all the investments that you got to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all. ‘ He says ‘Under those rules, you’d really think carefully about what you did, and you’d be forced to load up what you’d really thought about. So you’d do so much better.’ Again, this is a concept that seems perfectly obvious to me. And to Warren it seems perfectly obvious. But this is one of the very few business classes in the United States where anybody will be saying so. It just isn’t the conventional wisdom. To me it’s obvious that the winner has to bet selectively. It’s been obvious to me since very early in life. I don’t know why it’s not obvious to very many other people.
Charlie Munger
So what makes sense for the investor is different from what makes sense for the [Fund] manager. And, as usual in human affairs, what determines the behaviour are incentives for the decision maker.
Charlie Munger
[In September 2014.] If you stay rational yourself, the stupidity of the world helps you.
Charlie Munger
[In September 2014.] The whole world is better when you don’t reduce engineering standards in finance.
Charlie Munger
[In October 2014.] You have to be very patient, you have to wait until something comes along, which, at the price you’re paying, is easy. That’s contrary to human nature, just to sit there all day long doing nothing, waiting. It’s easy for us, we have a lot of other things to do. But for an ordinary person, can you imagine just sitting for five years doing nothing? You don’t feel active, you don’t feel useful, so you do something stupid.
Charlie Munger
[In May 2015.] It’s harder to learn faster than when you get your nose whacked by a bad experience.
Charlie Munger
[In March 1998.] We’d rather deal with what we understand. Why should we want to play a competitive game in a field where we have no advantage – maybe a disadvantage – instead of playing in a field where we have a clear advantage?
Charlie Munger
[In May 2005.] A director who gets $150,000 per year from a company and needs the money is not independent.
Charlie Munger
[In May 2007 on the benefits of one not always learning things the hard way.] You should be able to learn not to pee on an electrified fence without actually trying it.
Charlie Munger
[In May 2007.] I don’t think you can become a great investor rapidly, no more than you can become a bone-tumor pathologist quickly.
Charlie Munger
[In May 2007.] If you want to be happy in marriage, try to improve yourself as a spouse, not change your spouse.
Charlie Munger
[In May 2008.] You’ll do better if you have passion for something in which you have aptitude. If Warren [Buffett] had gone into ballet, no one would have heard of him.
Charlie Munger
[In May 2008.] Students learn corporate finance at business schools. They are taught that the whole secret is diversification. But the exact rule is the opposite. The ‘know-nothing’ investor should practice diversification, but it is crazy if you are an expert. The goal of investment is to find situations where it is safe not to diversify. If you only put 20% into the opportunity of a lifetime, you are not being rational. Very seldom do we get to buy as much of any good idea as we would like to.
Charlie Munger
[In April 2015.] Concentrating hard on something that’s important, I can’t succeed at all without doing it. I did not succeed in life by intelligence. I succeeded because I have a long attention span.
Charlie Munger
[In April 2015.] I don’t have any wonderful insights that other people don’t have. I just avoided idiocy slightly more consistently than others.
Charlie Munger
[In April 2015.] Other people are trying to be smart, all I’m trying to be is non-idiotic. I’ve found that’s all you have to do to get ahead in life, be non-idiotic and live a long time. It’s harder to be non-idiotic than most people think.
Charlie Munger
[In March 1990.] There’s integrity, intelligence, experience and dedication.
Charlie Munger
[In May 1990 on calculating the exact value of a business.] We never sit down, run the numbers out and discount them back to net present value… The decision should be obvious.
Charlie Munger
[In 1995.] That’s the reason so many people are ruined by gambling – they get behind and then they feel like they have to get it back the way they lost it. It’s a deep part of human nature. It’s very smart just to lick it – by will…
Charlie Munger
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