Charlie Munger Quotes
372 Charlie Munger Quotes
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[In May 2013.] I avoid Twitter like the plague.
Charlie Munger
[In May 2013.] We have tried to stay sane when other people go crazy.
Charlie Munger
[In May 2013 on not spending time on macro forecasts when investing.] Why spend time talking about things you don't understand. It is not very productive. And, if we don't know, [tongue in cheek] nobody knows…
Charlie Munger
[In May 2013 on why he doesn’t practice short selling.] We don't like trading agony for money.
Charlie Munger
[In May 2013 on inheritances and leaving money to your kids.] Don't discuss the will with your kids if you are going to treat the kids unequally.
Charlie Munger
[In May 2014.] Removal of Ignorance is the critical success factor.
Charlie Munger
[In May 2014.] I took thermodynamics at CalTech by Professor Homer J. Stewart and I knew that no matter how hard I studied I will never be as good as Dr. Stewart in thermodynamics. I tried other fields with the same results. So, I kept going until I ended up here [investing].
Charlie Munger
[In May 2014.] I don't like this huge confidence of people creating a whole lot of money and spending it. I don't forget Weimar Germany and the US should not either. We shouldn't risk blowing up the whole thing because of some crazy politicians.
Charlie Munger
[In May 2014.] You get the partner you deserve. If you get a good partner, you deserved it. Just behave yourself correctly. It is amazing how well that works.
Charlie Munger
[In May 2014 on the importance of parents teaching their children about money.] You can't fix people with wrong parents.
Charlie Munger
[In September 2014 on deciding to change auditors after his previous auditor set a new record in being so late with a company audit.] They were like the doctor who wants to fix a nose bleed by feeling around in the groin, and charge for it by the hour.
Charlie Munger
[In September 2014.] Berkshire started with three failing companies: a textile business in New England that was totally doomed because textiles are congealed electricity and the power rates were way higher in New England than they were down in TVA country in Georgia. A totally doomed, certain-to-fail business. We had one of four department stores in Baltimore [Hochschild Kohn], absolutely certain to go broke, and of course it did in due course, and a trading stamp company [Blue Chip Stamps] absolutely certain to do nothing which it eventually did. Out of those three failing businesses came Berkshire Hathaway. That’s the most successful failing business transaction in the history of the world. We didn’t have one failing business – we had three. Out of that little nothing, the excess capital that we took out and put somewhere else did better than anybody’s ever done.
Charlie Munger
[In September 2014.] I don’t like the vast growth of legalized gambling, including the legalized gambling run by Wall Street in the form of derivatives trading… I think one legal drug is enough. I don’t think society is going to be better with two or three or four legal drugs.
Charlie Munger
[In September 2014.] On balance, I’m not as optimistic as Warren [Buffett]. I don’t see how anybody could be more optimistic that Warren. He has this real faith in the long term. I’m not quite so enthusiastic, but he’s right that there’s a lot good that’s happening.
Charlie Munger
[In September 2014.] We were the only undertaker in a town with the plague. Two plus two gave us this chunk of money.
Charlie Munger
[In September 2014.] Berkshire Hathaway, for all its glorious achievement, started one new business. [The reinsurance department.] Everything else we bought. On the other hand, you don’t need a whole lot of achievements; you just need a few.
Charlie Munger
[In September 2014.] There is more dementia about finance than there is about sex. It’s a hard subject to be rational about.
Charlie Munger
[In September 2014.] I do think it’s a mistake to let a lot of people get rich out of legalized gambling, although they call themselves money managers and derivatives traders...
Charlie Munger
[In September 2014.] If the rest of the world weren’t so stupid and bureaucratic, we wouldn’t be rich, and you [the people in the room] wouldn’t be rich either. This room is full of people whose comfort has come from the stupidity of other people.
Charlie Munger
[In September 2014 on some parts of mortgage lending lending up to the sub-prime crisis.] You take people that can’t handle credit and try to make very high returns by abusing and encouraging their stupidity – that’s not the way I want to make money in banking. You should try to make money by selling people things that are good for the customer. You’ll never see Berkshire buy a gambling casino. Even though it’s profitable and legal we’re just not going to go there.
Charlie Munger
[In September 2014.] Peter Kaufman says something very smart: ‘If all these crooks and promoters knew how much money there was in being honest, there’d be more people who did it.’
Charlie Munger
[In September 2014.] There have been eight large portfolio reinsurance transactions of over a billion dollars in the history of the world. We’ve done all eight of them. That’s because people trust us. They think we’ll do what we say thirty years ahead.
Charlie Munger
[In September 2014.] There’s money in being trusted. It’s such a simple idea, and yet everybody rushes into every scummy activity that seems to work.
Charlie Munger
[In September 2014.] This is a different crowd of people. That’s all right – I like you all because you remind me of myself. Who doesn’t like his own image starring back at him?
Charlie Munger
[In September 2014.] I lived in a world with low gambling for decades when I was younger and I liked it better. I think it was better for the country.
Charlie Munger
[In September 2014.] In Beijing, where the average longevity is foreshortened by ten years by air that’s so bad that children are gasping for breath, they have to stop burning gasoline.
Charlie Munger
[In September 2014 on monetary expansion.] When you’re as old as I am, you have seen a lot of inflation.
Charlie Munger
[In September 2014.] There is nothing wrong with keeping your head when all about you are losing theirs…
Charlie Munger
[In September 2014 on a scenario where Fannie Mae extended credit to everyone.] We want to shovel money at the people who were deprived. The trouble with that is the whole system blows up.
Charlie Munger
[In September 2014.] Elihu Root, probably the greatest cabinet officer we ever had, said one of my favorite comments: No man is fit to hold public office who isn’t perfectly willing to leave it at any time. Of course, he was the most famous lawyer in the world so he could immediately leave to success, whereas the other politicians, if they left, were nothing. The country would be better off if we had more people like Elihu Root making the decisions.
Charlie Munger
[In September 2014.] I think
Ben Graham wasn’t nearly as good an investor as Warren Buffett is or even as good as I am. Buying those cheap, cigar-butt stocks [companies with limited potential growth selling at a fraction of what they would be worth in a takeover or liquidation] was a snare and a delusion, and it would never work with the kinds of sums of money we have. You can’t do it with billions of dollars or even many millions of dollars. But he was a very good writer and a very good teacher and a brilliant man, one of the only intellectuals - probably the only intellectual - in the investing business at the time.
Charlie Munger
[In September 2014.] Confucius said that real knowledge is knowing the extent of one’s ignorance. Aristotle and Socrates said the same thing. Is it a skill that can be taught or learned? It probably can, if you have enough of a stake riding on the outcome. Some people are extraordinarily good at knowing the limits of their knowledge, because they have to be. Think of somebody who’s been a professional tightrope walker for 20 years – and has survived. He couldn’t survive as a tightrope walker for 20 years unless he knows exactly what he knows and what he doesn’t know. He’s worked so hard at it, because he knows if he gets it wrong he won’t survive. The survivors know. Knowing what you don’t know is more useful than being brilliant.
Charlie Munger
[In September 2014.] Warren and I aren’t prodigies. We can’t play chess blindfolded or be concert pianists. But the results are prodigious, because we have a temperamental advantage that more than compensates for a lack of IQ points.
Charlie Munger
[In September 2014 on buying bank stocks in March 2009.] We just put the money in. It didn’t take any novel thought. It was a once-in-40-year opportunity. You have to strike the right balance between competency or knowledge on the one hand and gumption on the other. Too much competency and no gumption is no good. And if you don’t know your circle of competence, then too much gumption will get you killed. But the more you know the limits to your knowledge, the more valuable gumption is. For most professional money managers, if you’ve got four children to put through college and you’re earning $400,000 or $1 million or whatever, the last thing in the world you would want to be worried about is having gumption. You care about survival, and the way you survive is just not doing anything that might make you stand out.
Charlie Munger
[In September 2014 on the money management industry.] Back in 2000, venture-capital funds raised $100 billion and put it into Internet startups - $100 billion! They would have been better off taking at least $50 billion of it, putting it into bushel baskets and lighting it on fire with an acetylene torch. That’s the kind of madness you get with fee-driven investment management.
Charlie Munger
[In September 2014 more on the money management industry.] Everyone wants to be an investment manager, raise the maximum amount of money, trade like mad with one another, and then just scrape the fees off the top. I know one guy, he’s extremely smart and a very capable investor. I asked him, ‘What returns do you tell your institutional clients you will earn for them?’ He said, ‘20%.’ I couldn’t believe it, because he knows that’s impossible. But he said, ‘Charlie, if I gave them a lower number, they wouldn’t give me any money to invest!’ The investment-management business is insane.
Charlie Munger
[In September 2014 on the rapid trading of derivatives and stocks.] It’s like the slaughter of the innocents. It makes the people who run Las Vegas seem like good people.
Charlie Munger
[In September 2014.] No occasion, no matter how terrible, is totally un-useful. It can always serve as a useful bad example. That’s the way I feel about this audit.
Charlie Munger
[In September 2014.] Turning the other cheek didn’t start with Jesus at all. The real guy who figured that out was Aristotle. He just thought it was crazy to spend your time trying to get even based on some injury.
Charlie Munger
[In October 2014.] It’s much more fun constantly exceeding your expectations instead of being disappointed. The secret of human felicity [intense happiness] is not vast ambition, it’s low expectations.
Charlie Munger
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