Charlie Munger Collection
*Disclaimer*
*Contact Us*
*Investment Wit & Wisdom*
1924 - 2023
He didn't merely teach us how to invest, he showed us how to think
Charlie Munger - Farnam Street Blog
50 Quotes Honoring Charlie Munger
The Best of Charlie Munger 1994 - 2011 (PDF)
The Art of Stockpicking (PDF)
The Psychlogy of Human Misjudgement (PDF)
98 Lessons from the Maestro himself - Charlie Munger
“ ”
Take a simple idea; and take it seriously.Charlie Munger
"Forget what you know about buying fair businesses at wonderful prices;
instead, buy wonderful businesses at fair prices."
Charlie Munger
Two of Munger's favorite words were assiduity and equanimity.
He liked the first, he said in a speech in 2007, because "it means sit down on your ass until you do it." He often said that the key to investing success was doing nothing for years, even decades, waiting to buy with "aggression" when bargains finally materialized.
He liked the second because it reflected his philosophy of investing and of life. Every investor, Munger said frequently, should be able to react with equanimity to a 50% loss in the stock market every few decades.
Around 2016, an acquaintance asked which person, in a long life, he felt most grateful to."My second wife’s first husband," Munger said instantly. "I had the ungrudging love of this magnificent woman for 60 years simply by being a somewhat less awful husband than he was."
• I think you would understand any presentation using the word EBITDA if every time you saw that word, you just substituted the phrase with 'bullshit earnings.'
• I'm optimistic about life. If I can be optimistic when I'm nearly dead, surely the rest of you can handle a little inflation.
• The best way to get what you want in life is to deserve what you want. How could it be otherwise? The world is not crazy enough to look for a lot of undeserving people to reward.
• I've listened to many nonsensical cost-of-capital discussions, but never heard an intelligent one.
• That's how I got married. My wife lowered her expectations.
• Some people are confused. I play golf with a man. He says, 'What good is health? You can't buy money with it!
• It's perfectly obvious, at least to me, that to say that derivative accounting in America is a sewer is an insult to sewage.
• Warren reminds me that once I asked a man who had just left a large investment bank, "How does your firm make its money?" He said, "Off the top, off the bottom, off both sides, and in the middle."
Charlie Munger
In his recent Berkshire Hathaway 2022 Annual Letter, Warren Buffett provided a list of some of the best thoughts from his partner Charlie Munger. Here’s an excerpt from the letter:
Charlie and I think pretty much alike. But what it takes me a page to explain, he sums up in a sentence. His version, moreover, is always more clearly reasoned and also more artfully – some might add bluntly – stated.
Here are a few of his thoughts, many lifted from a very recent podcast:
• The world is full of foolish gamblers, and they will not do as well as the patient investor.
• If you don’t see the world the way it is, it’s like judging something through a distorted lens.
• All I want to know is where I’m going to die, so I’ll never go there.
And a related thought: Early on, write your desired obituary – and then behave accordingly.
• If you don’t care whether you are rational or not, you won’t work on it. Then you will stay irrational and get lousy results.
• Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.
• You can learn a lot from dead people. Read of the deceased you admire and detest.
• Don’t bail away in a sinking boat if you can swim to one that is seaworthy.
• A great company keeps working after you are not; a mediocre company won’t do that.
• Warren and I don’t focus on the froth of the market. We seek out good long-term investments and stubbornly hold them for a long time.
• Ben Graham said, “Day to day, the stock market is a voting machine; in the long term it’s a weighing machine.” If you keep making something more valuable, then some wise person is going to notice it and start buying.
• There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero. Don’t count on getting rich twice.
• You don’t, however, need to own a lot of things in order to get rich.
• You have to keep learning if you want to become a great investor. When the world changes, you must change.
Warren and I hated railroad stocks for decades, but the world changed and finally the country had four huge railroads of vital importance to the American economy. We were slow to recognize the change, but better late than never.
Finally, I will add two short sentences by Charlie that have been his decision-clinchers for decades: “Warren, think more about it. You’re smart and I’m right.”
And so it goes. I never have a phone call with Charlie without learning something. And, while he makes me think, he also makes me laugh.
I will add to Charlie’s list a rule of my own: Find a very smart high-grade partner – preferably slightly older than you – and then listen very carefully to what he says.
“If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get.”
Charlie Munger, Interview with BBC
"The ideal would be to make money with your mind, not with your time."
Charlie Munger
"To get what you want, you have to deserve what you want."
Charlie Munger
"In my whole life, I’ve never succeeded much in what I wasn’t interested in. So I don’t think you're going to succeed if what you’re doing all day doesn’t interest you."
Charlie Munger
There's a model that I call 'surfing' -- when a surfer gets up and catches the wave and just stays there, he can go a long, long time. But if he gets off the wave, he becomes mired in shallows...But people get long runs when they're right on the edge of the wave -- whether it's Microsoft or Intel or all kinds of people, including National Cash Register in the early days.
Charlie Munger
Once you let wrongdoers get rich, they get enormous political power to prevent change in the laws that are enriching them. It means that we should all be more vigilant about stepping on these wrongs when they’re small. Once they get large, they’re very hard to stop.
Charlie Munger
“You don’t want to be like the motion picture executive in California.They said the funeral was so large because everybody wanted to make sure he was dead.”
Charlie Munger
Remember that the person most likely to defraud you will be saying your magic words, whatever they are. It can be difficult to imagine that some people believe in nothing. That those words, to which you attribute great meaning, can mean nothing to them. But a big part of investing is to study people and to see them clearly. Even if it’s unpleasant or contrarian. Especially when it’s unpleasant or contrarian.
Charlie Munger
“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.”
Charlie Munger
There is no better teacher than history in determining the future. There are answers worth billions of dollars in $30 history books.
Charlie Munger
What is the secret of success? - One word answer: rational.
Charlie Munger
It takes character to sit with all that cash and to do nothing. I didn’t get to where I am by going after mediocre opportunities.
Charlie Munger
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
Charlie Munger
A 14-year-old came to Mozart and said, “I want to learn to be a great composer.”
And Mozart said, “You’re too young.”
The young man replied, “But I’m 14 years old and you were only eight or nine when you started composing.”
To which Mozart replied, “Yes, but I wasn’t running around asking other people how to do it.”
Charlie Munger
Charlie and I never have an opinion on the market because it wouldn't be any good and it might interfere with the opinions we have that are good.
Warren Buffett
"I have what I call an 'iron prescription' that helps me keep sane when I drift toward preferring one intense ideology over another.
I feel that I'm not entitled to have an opinion unless I can state the arguments against my position better than the people who are in opposition. I think that I'm qualified to speak only when I've reached that state…
"That is probably too tough for most people, although I hope it won't ever become too tough for me…
This business of 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.”
Charlie Munger
One has to be selective because people who do unwise things in one setting usually proceed to do unwise things in other setting as well.
In Munger’s words, “…it’s just so useful dealing with people you can trust and getting all the others the hell out of your life.
Charlie Munger
It’s obvious that if a company generates high returns on capital and reinvests at high returns, it will do well. But this wouldn’t sell books, so there’s a lot of twaddle and fuzzy concepts that have been introduced that don’t add much.
Charlie Munger
"Its insane to risk what you have for something you don't really need. My partner Charlie says, "there's only three ways that a smart person can go broke -- 'liquor, ladies and leverage."
Warren Buffett
“ ”
In fact the whole trick in life is to become such that your own brains don't mislead you.Charlie Munger
Charlie Munger
Charlie Munger
Charlie Munger
It’s amazing how if you just get up every morning and keep plugging and have some discipline and keep learning. It’s amazing how it works out okay.
Charlie Munger
"They created something that's unwise. You can't form a business partnership with your frivolous, drunken brother-in-law."
Charlie Munger on the Eurozone.
"If Berkshire has made a modest progress, a good deal of it is because Warren and I are very good at destroying our own best-loved ideas. Any year that you don't destroy one of your best-loved ideas is probably a wasted year."
Charlie Munger
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.
Charlie Munger
"I think that one should recognize reality even when one doesn't like it -- indeed, especially when one doesn't like it."
Charlie Munger
There are nine sheep in pen, and one jumps out, how many are left?
Everyone got it right, and said eight are left.
The boy said none are left.
The teacher said you don’t understand arithmetic, and he said ‘no you don’t understand sheep’.
Charlie Munger
"Wall Street is always going to go where the money is and not worry about the consequences. First they invent things they shouldn't sell to anybody, then they end up selling them to their grandmothers."
Charlie Munger
If you jump out of a window on the 42nd floor, just because you’re still doing fine at the 20th floor doesn’t mean you don’t have a serious problem.
Charlie Munger
Contact Us
Investment Wit & Wisdom