Charlie Munger Quotes

Charlie Munger will probably go down in history as one of the finest investors and “everyday” philosophers.

Who is Charlie Munger?

In case you don’t know, Charlie Munger is vice chairman of Berkshire Hathaway and has been regarded as Warren Buffet’s partner over many decades. Munger is also on the board of Costco (we made a Costco analysis not so long ago), a company we both own and admire.

We gathered some of his quotes. Read, learn, and think:

If you think something or somebody is ruining your life, it is you.

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If you haven’t overturned a long-held view in the past year you haven’t been thinking.

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The harder you work, the more confidence you get. But you may be working hard on something that is false.

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I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.

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BBC Interview, October 2009: “You can argue that if you’re not willing to react with equanimity to a market price decline of 50 percent two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result that you’re going to get.

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An example of a really responsible system is the system the Romans used when they built an arch. The guy who created the arch stood under it as the scaffolding was removed. It’s like packing your own parachute.

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You must force yourself to consider opposing arguments. Especially when they challenge your best loved ideas.

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There must be some wisdom in the folk saying, `It’s the strong swimmers who drown.

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Work hard. Spend less than you earn. Avoid leverage. Avoid Drugs. Don’t drink too much. It’s not rocket science.

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You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to know whether the gamble is mispriced. That’s value investing.

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It is easier to make a mistake with a good idea because a bad idea is quickly rejected.

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If something isn’t worth doing, it isn’t worth doing well.

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The whole secret of investment is to find places where it is safe and wise not to diversify.

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The way to minimize risk is to think.

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We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side.

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The ability to destroy your ideas rapidly instead of slowly when the occasion is right is one of the most valuable things. You have to work hard on it. Ask yourself what are the arguments on the other side. It’s bad to have an opinion you’re proud of if you can’t state the arguments for the other side better than your opponents. This is a great mental discipline.

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People calculate too much and think too little….we have a passion for keeping things simple. If something is too hard, we move on to something else. What could be more simple than that?

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

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It’s not supposed to be easy. Anyone who finds it easy is stupid.

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Knowing what you don’t know is more useful than being brilliant.

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Acknowledging what you don’t know is the dawning of wisdom.

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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.

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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.

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Sit on your ass. You’re paying less to brokers, you’re listening to less nonsense, and if it works, the tax system gives you an extra one, two, or three percentage points per annum.

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You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to know whether the gamble is mispriced. That’s value investing.

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If people weren’t wrong so often, we wouldn’t be so rich.

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There isn’t a single formula. You need to know a lot about business and human nature and the numbers…It is unreasonable to expect that there is a magic system that will do it for you.

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There’s no way that you can live an adequate life without many mistakes. In fact, one trick in life is to get so you can handle mistakes. Failure to handle psychological denial is a common way for people to go broke.

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It’s bad to have an opinion you’re proud of if you can’t state the arguments for the other side better than your opponents. This is a great mental discipline.

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Oh, it’s just so useful dealing with people you can trust and getting all the others the hell out of your life. It ought to be taught as a catechism. . . . But wise people want to avoid other people who are just total rat poison, and there are a lot of them.

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I don’t think I’m a good example to the young. I don’t want to encourage people to follow my particular path. I do not want a proctologist who knows Schopenhauer, or astrophysics. I want a man whose specialized. That’s the way the market is. And you should never forget that. On the other hand, I don’t think you’d have much of a life if all you did was proctology.

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Regarding buying USG: ‘t seemed like a good idea at the time.

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Elon says a conventional moat is quaint. And that is true of a puddle of water.

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

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Generally speaking, envy, resentment, revenge, and self-pity are disastrous modes of thought. Self-pity gets pretty close to paranoia…Every time you find your drifting into self-pity, I don’t care what the cause, your child could be dying from cancer, self-pity is not going to improve the situation. It’s a ridiculous way to behave.

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Life will have terrible blows, horrible blows, unfair blows, it doesn’t matter. Some people recover and others don’t. There I think the attitude of Epictetus is the best. He thought that every mischance in life was an opportunity to behave well. Every mischance in life was an opportunity to learn something and that your duty was not to be immersed in self-pity, but to utilize the terrible blow in a constructive fashion. That is a very good idea.

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The right culture, the highest and best culture, is a seamless web of deserved trust. Not much procedure, just totally reliable people correctly trusting one another.